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A review of things you need to know before you go home on Thursday; ANZ warns on rising house price consequences, GDP growth goes into reverse, bond yields dip again, swaps and NZD firm, & more

A review of things you need to know before you go home on Thursday; ANZ warns on rising house price consequences, GDP growth goes into reverse, bond yields dip again, swaps and NZD firm, & more

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

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
None here today either.

WARNING
An ANZ report describes recent house price inflation as alarming, but warns that higher interest rates and tighter credit are on the way

INTO REVERSE AGAIN
Our economy went into reverse again in the last quarter of 2020 with a fall that was bigger than expected by the Reserve Bank and by bank economists. If it also happens in Q1-2021, a second recession looms.

STRONG BIDDING, LOWER YIELDS
There was another Treasury bond tender today and this one continued the recent trend of lower yields and bidders offered higher prices for these benchmark risk-free bonds. A slimmed down $450 mln was tendered in three maturities, and overall more than $1.3 bln was offered, leaving $865 mln unsatisfied. The April 2025 offer went with a yield of 0.79% pa and down from the 0.87% pa two weeks ago for this maturity. The April 2029 bond went for 1.50% pa and down from 1.58% two weeks ago. The April 2033 bond went for 1.95% and down from the prior 2.02% pa.

PROGRESS, BUT ONLY BACK TO LAST YEAR'S LEVEL
In Australia, they have announced their jobless rate has dipped from 6.4% in January to 5.8% in February, an improvement far greater than expected.  A year ago it was at 5.1%. Total employment rose to 13 mln, a gain of +88,700 but only back to where it was a year ago. Underemployment rose to 8.5% and their participation rate slipped slightly. (The New Zealand jobless rate was last reported for December at 4.9%.)

PROGRESS
The RBNZ has released Tower Insurance from half its minimum excess solvency margin from $50 mln to $25 mln. The reduction recognises Tower’s decreasing risk related to the Canterbury earthquakes. The balance of their excess solvency margin will remain for at least one more year.

GOLD RISES
Gold is trading in Australia, and soon in Asian markets. So far today it is at US$1751 and up +US$21 from where it closed yesterday. That is only marginally above where it closed in New York. But it is a +1.2% gain from the closing London fix.

EQUITIES MIXED
Wall Street liked the US Fed's policy non-moves and after the release it gained and the S&P500 ended up +0.3% after being down more than -0.6% earlier, so a +1% reaction. However the NZX50 Capital Index is down -0.4% in late trade and the ASX200 is down -0.3% in early afternoon trade. Tokyo has opened up a very strong +1.7%. But Hong Kong and Shanghai have opened timidly, essentially flat.

SWAP & BONDS RATES RISE
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. The 90 day bank bill rate is up +1 bp at 0.34%. But by that small rise, it is now at its highest since April 2020, eleven months ago. Benchmark rates are dead-in-the-water, waiting for a wind change from the US Fed which is forecast to come in tomorrow morning. The Australian Govt ten year benchmark rate is up +5 bps at 1.78%. The China Govt ten year bond is holding at 3.28%. The New Zealand Govt ten year is up +2 bps at 1.76% and now at the same level of the earlier RBNZ fixing at 1.79% (+6 bp). Although it got as high as 1.69% just before the US Fed announcement, the US Govt ten year is currently up +2 bps from this time yesterday at 1.64%.

NZD UP
The Kiwi dollar is now at 72.5 USc and a +½c gain following the US Fed announcement earlier today. On the cross rates we are down to 92.6 AUc. Against the euro we up marginally at 60.5 euro cents. That all means our TWI-5 is now up at 74.3.

BITCOIN BOUNCES HIGHER
Bitcoin has risen to US$59,061 which is a gain of +US$2,700 in one day, or +4.8%. Volatility over the past 24 hours has been a very high +/- 4.9%.

This soil moisture chart is animated here.

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

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39 Comments

'ANZ warns on rising house price consequences..'

Everyone knows except those who can control as is not rocket science and media highlighting everyday on hourly basis.

Think it is not Jacinda Arden to be blamed, as when it was happening under John Key (not at this level), he to too was ignoring and was in denial with lies and manipulation, the same thing that Jacinda Arden is doing today.

It has to do with POWE : Power tends to corrupts (what happened with John Key) ; Absolute power corrupts Absolutely ( Jacinda Arden and also her first taste of power at an early stage,so is blinded by I, Me, myself).

As power brings out your trueself ( mostly ugly side) ...political monopolization is bad as can compare with Jacinda's last term where she was dependent on other political parties (This political parties may be good or bad but were good for democracy to keep check).

Also not everyone is able to handle power at early stage in their life. Need strong intelligent leaders with forward thinking approach and good soul to avoid falling in power trap.

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Perception : Check with speculators, for them She is God's Gift to NZ.

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Jacinda Adern, overwhelmingly voted One Roof playmate of the century.

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In Australia, they have announced their jobless rate has dipped from 6.4% in January to 5.8% in February

A bit of backlash brewing over how ASX companies have exploited the fear of rampant unemployment to line the pockets of their shareholders:

New data reveals 66 of the ASX’s top 300 companies claimed a total of $1.38 billion in JobKeeper payments in the second half of 2020 — despite 58 of these growing their profits.
One-fifth of JobKeeper payments to major listed companies from June to December went to firms that actually grew their profits.

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Almost all the stimulus went to the already wealthy in both NZ and Aust.

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People who normally vote and matters.

Check with Jacinda

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As always there is liberal ability to spend other people’s money. That is near enough $1mill to engage aged rocker Rod to warble through one his standards. No problem with Rod himself, a legendary performer in my book, but in his faux admirals blouse, it looked almost as if Lord Nelson himself had been dug up. $1 millions worth? Hardly.

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Totally agree. He's still a great performer, but $1m?

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Probably the bigger issue with this stat is its low enough to drive kiwis over the ditch again.

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Tony is on fire again today in his One Roof column. His last sentence; "taking on high debt to purchase a house is becoming a social right (rite) of passage".

rite of passage- a significant change of status in society when an individual leaves one group to enter another.

And he seems to be trying to spin this socially divisive rite of passage as a positive thing. Has this man no shame? As I have said before NZ would be a better place if One Roof was (metaphorically speaking) burnt to the ground.

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Do not say anything to Tony's of NZ and upset Jacinda Arden and her team.

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The more debt you take on the more effluent you feel! - Kath Day-Knight

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This whole thing is taking on water. Hang on, that's not water.

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Yeah agree. Really, I should boycott the Herald, but I can't help myself and they still have a handful of worthwhile journos who are worth reading.

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Out in the bigger world.

Visa CEO Al Kelly anticipates that cryptocurrency could become “extremely mainstream” within five years. He is working to position Visa in the middle of it should cryptocurrency take off. He further confirmed that Visa is working to allow bitcoin purchases, in addition to enabling the cryptocurrency to be used at 70 million stores where Visa is accepted.

https://news.bitcoin.com/visa-cryptocurrency-extremely-mainstream-bitco…

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STRONG BIDDING, LOWER YIELDS
Missed the linker?

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Interestingly my wife got a notification on her UK mobile from the National Health Service (NHS) to say that she was eligible to book a Covid-19 vaccination. She was pretty keen to go back to the UK and do it, see relatives etc. until I pointed out that she'd have to wait several months to come back to New Zealand because the Managed Isolation system was booked out.

Might be worth thinking about for Kiwis over the winter though when the UK opens removes all restrictions on vaccinations. The UK government have already stated that they are more interested in vaccinating everybody than keeping score:
https://www.reuters.com/article/us-health-coronavirus-britain-immigrant…

I don't think that will be until July though.

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Interested that you see people who retain UK citizenship and take advantage of it when it suits them as 'kiwis'?

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I'm not a Kiwi and will never be. As an ausländer you may reside here, be made a citizen, embrace the the cultural norms, drive an old Toyota pickup etc. but you will always be an outsider. That's OK though, being an outsider actually has many advantages.

Also, to be fair, we are taxed in both jurisdictions so it's not like we're leeching off British taxpayers.

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Interested to see what will be announced next week regarding “housing crisis” – sadly however, I’m fully prepared to be rather underwhelmed.

Much noise and media buzz over the last few days regarding anticipated hoped for solutions.

Could be wrong but I haven’t sighted a single mention of a more intelligent immigration policy as part of the solution – why is this such a no-go area when it contributes so much to the problem – quite puzzling really.

We surely need a more intelligent immigration/population policy designed/implemented now as a matter of priority – while we can.

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What is going to be announced is many more taxpayer dollars going into supporting the Ponzi. More taxpayer dollars in FHB deposit grants, more taxpayer dollars to landlords via increases in accomodation supplements, and ultimately more taxpayer dollars into benefits to provide a fig leaf over rising inequality. The buck stops with the taxpayer to fund all the looting - this is a large-scale heist complete with a government guarantee from JA.

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And when a few politicians were door-stopped by TVNZ News this evening and asked:
"How many houses do you own?"
Not only did they all prevaricate, but Gerry Brownlee more so when he answered "Umm...3" to later issue a clarification of 6. So he appears to have bought another one in the last 6 months, judging by the following:

https://www.newshub.co.nz/home/politics/2020/08/the-number-of-propertie…

If that's the case, then given the inside knowledge that he obviously has - NOTHING is going to get done to sort this mess out.
"Even Adrian has 2!" Nationals' Housing spokesperson Nicola Willis responded indignantly.

karl seastrand | 18th Mar 21, 4:47pm ,above, might just be on to something!

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In some respects, just more fluff, junk TVNZ journalism but…

Yes, a degree of avoidance in those politicians answers – a good follow up question would have been “why the squirming”.

I would suggest this subsequent question couldn’t be accused of being somewhat loaded – after all, the politicians were the ones that seemed oddly troubled by the initial question in the first place.

It almost appeared that they felt a degree of guilt.

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Only six? The property pyramid represents the greatest transfer of wealth from the poor to the wealthy in the post-War era.

For years people have been saying that this "won't last forever" or similar. This will last as long as you cannot buy residential zoned land cheaply in New Zealand, the system is working exactly as intended. The RMA is working exactly as intended and it's replacement will work exactly as intended. This is a perfectly fair and balanced system in which houses are being valued at increasing multiples because there is no threat of residential zoning changes.

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Brownlee, what a liar, I mean how can you say '3' when you have 6...jesus, we are screwed

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Brownlee's used to taking up twice the space of everyone else and just thinks its normal. Takes him a while to recalibrate.

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I saw/heard this also. Therein lies the problem.

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From memory, Sherman asked two opposition MPs and one Cabinet Minister in her story.

Perhaps she needs reminding which party is in government and which ones are currently in charge. Or perhaps that's just not the done thing with the Ardern Labour Government.

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Inefficent and corrupt

https://www.newshub.co.nz/home/politics/2021/03/revealed-the-multimilli…

Government is distributing money with both hand and motel owners are charhing double and triple from government.... Really.... Govetnment should be negotiating as giving bulk business with payment guranteed

https://www.newshub.co.nz/home/politics/2021/03/revealed-the-multimilli…

F@$K this government either is stupid or glove in hand with motel owners and other accomodation provider.

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The motels should be grateful to have someone replacing the tourists. Heads have to roll. Minister Sepuloni appeared ignorant of the fact the taxpayer is being gouged. And send in the Commerce Commission to see if there has been price fixing among the motels.

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Why worry about getting ripped off why you can print infinite quantities of money? Welcome to the golden age of MMT!

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Sepuloni is another awful politician.

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They are eitber corroupt or stupid and in both scenario heads should roll

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Is there a publicly available list of the motels?

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I think I remember Yvil saying he was leaching off the government with his Timaru motel.

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Anchor motel or something like that.

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"'ANZ warns on rising house price consequences..'"

Wow really ? What a shocking revelation, I am sure that nobody was even dimly aware of the consequences of rising house prices.

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Anz warns on house price rises, hahahaha

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Extreme Bond moves tonight - currently US-10-YR 1.726%

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Central Banks and The Market facing off – “could” head to 2.50%.

“The global credit market in aggregate is about three times the size of the global equity market.”

Who knows Fritz - maybe ANZ see something coming - whatever it is - they're too small to do anything about it anyway.

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