What happened Monday

A review of things you need to know before you go home on Monday; QV warns of top, new HSBC local boss, new MCY green bond, oil price spikes, swaps hold, NZD little-changed, & more

8th Mar 21, 3:59pm by David Chaston

ID 22702269 © Daniaphoto | Dreamstime.com

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
Kāinga Ora/Housing NZ reduced some fixed rates.

TERM DEPOSIT RATE CHANGES
None here today so far.

HOUSE PRICE TURNING POINT?
QV says average housing values are up almost +7% over the last three months but warns of a gradual cooling as new LVR restrictions start to kick in. They say they may already be cooling in Tauranga.

NEW BANK CEO
Burcu Senel, who has worked for HSBC for 15 years, is named as the bank's new New Zealand CEO.

NEW GREEN BOND COMING
Mercury NZ Limited (MCY) is getting ready to offer up to $250 mln for a 5½ year unsecured, unsubordinated fixed rate green bond to institutional and New Zealand retail investors. These bonds are likely to be assigned a credit rating of BBB+.

THE OIL PRICE SPIKES AGAIN
Saudi Arabia said a key crude oil terminal was attacked by missiles and drones, and blamed Yemeni forces. That sent oil prices above US$70/bbl.

UBI BENEFITS
In 2019, the Californian city of Stockton started a UBI trial project for two years with an initial set of 125 randomly-chosen disadvantaged people who were given US$500 per month, on a no strings attached basis. The results of the first year are in and this cohort reported some significant improvements, including being much more likely to have found a job. The project was privately funded, and separately audited. No City funds were involved.

GOLD TURNS UP
Gold is trading in Australia, and soon in Asian markets. So far today it is at US$1708 and up +US$9 from where it on Saturday.

EQUITIES GENERALLY HIGHER
The NZX50 Capital Index is flat in late trade, having given up the +1.1% gain it started the day with. The ASX200 has held its early gains and is now up +1.4% in early afternoon trade. Tokyo has opened with +0.4% gain, Shanghai has opened with a +0.2% rise, while Hong Kong has opened with a -0.5% fall. The S&P500 futures trade suggests New York will open tomorrow with a +0.4% rise.

SWAP & BONDS RATES HOLD HIGH
We don't have today's closing swap rates yet. If there are movements today, we will note them here later when we get the data. But they likely little-changed. Today the 90 day bank bill rate is up +1 bp at 0.32%. The Australian Govt ten year benchmark rate is down -6 bps today at 1.79%. The China Govt ten year bond is stable at 3.28%. The New Zealand Govt ten year is staying higher at 1.90%. But that is now slightly lower than the earlier RBNZ fixing at 1.91% (+2 bps). The US Govt ten year has also risen and is up another +2 bps from this time Friday at 1.58%.

NZD A LITTLE FIRMER
The Kiwi dollar is now at 71.7 USc and up marginally from where it was earlier this morning. On the cross rates we are holding 93.2 AUc. Against the euro we are also holding at 60.2 euro cents. That all means our TWI-5 is slightly firmer at 73.8.

BITCOIN HOLDING HIGHER
The price of bitcoin is back rising today, now at US$51,524 and up marginally (+0.7%) from where it opened this morning. Volatility over the past 24 hours has been +/- 2.7%.

This soil moisture chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

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26 Comments

by Audaxes | 8th Mar 21, 4:09pm 1615172983

Brent oil futures with delivery in May 2021 soared by 2.64% to $71.2 a barrel on the London-based ICE on Monday.
Brace For Oil Surge: Saudi Oil Tank In Ras Tanura Port Hit In Houthi Drone Attack

An aerial video shows the destruction caused by the Russian missile strikes on the fuel market in Al-Hamran in the eastern countryside of Aleppo, which was considered the second largest market for looted oil from #Syria's oil fields occupied by the United States. Link

by Squishy | 8th Mar 21, 5:29pm 1615177790

Good, high prices will push governments to build the infrastructure required in preparation for the switch to renewable energy and EVs.

by Audaxes | 8th Mar 21, 4:26pm 1615173967

PIMCO Rings The Alarm Over China's Sliding Credit Impulse

Yeah, no kidding; off a low base to “over” 6%, a hedge on already uninspiring. In other words, the Chinese, yet again, are saying that there’s not much economic growth coming; in truth, far, far less than anyone seems prepared to accept. Think about 6% following a year when – at best, we know what China does for real GDP – the expansion (likely contraction) had dropped to just 2.3% officially. Link

by bw | 8th Mar 21, 5:05pm 1615176309

(DP)

by custard | 8th Mar 21, 5:11pm 1615176703

Somewhat unrelated but nevertheless - I wonder what happened to “Henry Thompson’s Letter from America”.

Letters were delivered for several months last year but then perhaps the quill dried up or no one cleared the mail box – whatever the reason, no more were to be seen.

Pity, I thought his observations were quite interesting.

by northman46 | 8th Mar 21, 5:16pm 1615176990

Yet another disappointing day for the NZX! Boo.

by Squishy | 8th Mar 21, 5:34pm 1615178075

Should have invested in property instead.

by custard | 8th Mar 21, 5:37pm 1615178279

The Bond Market has the potential to crush all before it – do keep an eye out.

"Investors haven’t fully grasped inflation is ‘dead ahead,’ economist Mark Zandi warns"

https://www.cnbc.com/2021/03/07/investors-havent-grasped-inflation-is-d…

by Theoracle | 8th Mar 21, 6:46pm 1615182399

I'm officially calling it... property market about to flatten and St J about to lose "the people". Give it 6 months to play out before the woke start waking up and turn on her. Let's see what magic she'll do then.

by J.C. | 8th Mar 21, 8:39pm 1615189142

I think you're possibly right on the fairy dust starting to wear off.

by mfd | 8th Mar 21, 5:48pm 1615178923

Green day for most of my stocks and many on my watchlist - looks like FPH, ATM and MEL dragging down the index.

by Squishy | 8th Mar 21, 6:10pm 1615180256

My Food Bag (MFB) soaring majestically again, like a bowling ball dropped off a building.

by Justa comment | 8th Mar 21, 8:14pm 1615187667

Morningstar has a sell on Meridian to $3.90 fair value, and a hold on Contact to $6.90 fair value. I agree with Morningstar, Meridian was way over priced. ETF re balancing selldowns to continue to March 28.

by karl seastrand | 8th Mar 21, 8:02pm 1615186976

cos of their market cap if FPH,ATM and MEL drop the whole NZX50 (will almost certainly) drop with them.

by J.C. | 8th Mar 21, 5:25pm 1615177555

Unicef Report Card gives New Zealand an F for failure when it comes to wellbeing outcomes for children.

Out of 41 EU and OECD countries, New Zealand ranks 35th in child wellbeing outcomes. New Zealand has the second highest obesity rate in the OECD. More than 1 in 3 children are obese or overweight. Meanwhile only 64.6% of 15 year olds in New Zealand have basic proficiency in reading and maths.

https://www.unicef.org.nz/stories/new-report-card-shows-that-new-zealan…

by Swap A Crate | 8th Mar 21, 5:50pm 1615179022

Had my kids intermediate interview this week. Have had many an interview where they tell you little Johnny's doing OK. This time I asked to be updated on his maths, crickets... nearly seven years of education and still no guideline or homework sheet. This silence sets our kids up for a massive reality check and seems to go on unchecked year after year.. the silence IMHO is directly proportionate to the cushy and ever expanding backsides of our educators!

by Theoracle | 8th Mar 21, 6:44pm 1615182282

Permission to set record straight.

The educators as you refer to them are but the meat in the sandwich of ludicrous education policy, ridiculously over complex curricula and officious, well... officials. All running for the hills in the name of liability. The educators are also now the next gen product of progressive left socialist no hopers. So there's really no hope for your kid now sorry buddy. The sooner you accept that the sooner you can move through the stages and take your own initiative.

Teaching for teachings sake went out the window donkeys ago mate. It's all about record keeping now, providing evidence of outcomes. Schools were set up to be socially reproductive, provide workers for the factories and fit around milking hours as somewhere to shove the little buggers so parents can go to work and Johnny can help with morning and arvo milking.

Last year NZs progressive education system since Tomorrow's School's in the 80s was found to have seriously disadvantaged learners, particularly boys.

Home schooling gets a better result if you're up for it.

For an utterly tongue in cheek take on the sorry plight of teachers and teaching stuck check out the series penned by Dave Armstrong and set in Wainui I think. Pretty sure it's called... The Educators.

by Swap A Crate | 8th Mar 21, 7:54pm 1615186467

Yep my boy gets his own curriculum at home..essential for any kid floating in our school system. He's doing well, thanks for the pep talk, 'buddy'.

by Theoracle | 8th Mar 21, 9:29pm 1615192192

Yep no worries bud. NZs long tail in education is a modern travesty. And I think it's called Mr Gormsby the Dave Armstrong TV series. Educators was another Kiwi series about the travails of teachers and schools.

by frazz | 8th Mar 21, 6:44pm 1615182257

crickets..? Was never taught that at school? Probably explains their silence?

by Rosenstein | 8th Mar 21, 7:41pm 1615185709

No, crickets, new school lunches, high protein.

by pacifica | 9th Mar 21, 12:51am 1615204287

Nutty in flavour, good for pasta/stirfry sauces, but you want to mix in some contrasting tones. If in powder form mix with a bit of liquid e.g. cream, tomatoes, oil etc, some herbs/spices and a tart flavour like lemon or lime juice. If in cricket form a nice sweet chilli sauce helps. Overall difference to health... well many of you will notice the iron deficiency and need to supplement like crazy for other important minerals, amino acids and vitamins but eating cricket is superior to veganism which often causes actual medical harm to a high percentage of people. Oh wait new lunchbox rules means bug form is out, it is not like shrimp and prawn.

by redcows1 | 8th Mar 21, 6:49pm 1615182597

Was talking about education over the weekend. The conclusion we ended at was for the last ten years or more teachers have become managers. Mangers of the children thru the curriculum, doesn't matter how the children are actually doing so long as the management outcomes are achieved. Pretty certain my grandkids will be fine, majority if their education is done at home, but the research isn't showing the same for their class mates and that affects us all.

by Theoracle | 8th Mar 21, 9:30pm 1615192254

You got it. Those educated at home should do fine, others it's hit and miss. Shouldn't be like that in 2021.

by Squishy | 8th Mar 21, 5:33pm 1615178010

HSBC New Zealand has a CEO? I was under the impression that it was just a very small operation HSBC had in New Zealand.

by Rosenstein | 8th Mar 21, 7:45pm 1615185908

Who is going to launder all that Afghan opiate coin into NZs property market?