What happened Thursday

A review of things you need to know before you go home on Thursday; CoreLogic's HPI jumps again, consumer attitudes shift, Crown Accounts improve, bond tender yields rise, swaps stable, NZD soft, & more

1st Apr 21, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
Minnow Heretaunga Building Society raised one fixed rate and reduced another.

TERM DEPOSIT RATE CHANGES
Heretaunga Building Society also raised some TD rates.

FAST RISES SLOW SLIGHTLY
CoreLogic's House Price Index shows housing values are continuing to rise but the rate of increase has slowed. It was up +16.1% in March from a year ago, but the three month increase dropped from +7.6% in February to +7.2% in March.

'LITTLE DIPPER'
The ANZ-Roy Morgan consumer confidence index is little-changed in March, mirroring the Westpac-McDermott Millar version. But the proportion of people who believe it is a good time to buy a major household item, a key retail indicator, fell 6 points. Inflation expectations eased slightly, as did house price inflation expectations.

AN IMPROVER
The Crown accounts showed the OBEGAL (operating balance before gains and losses) at about break-even in February (-$60 mln), a result similar to what was recorded in February 2020, pre-pandemic. The eight month result however is a deficit of -$4.5 bln. But there have been some major recoveries in the valuation of assets. Both NZSF and ACC have reported significant positive variances in relation to forecast, totalling $5.3 bln. This variance has been driven by gains on derivatives and financial assets for both entities with an offset on foreign exchange exposures. So the Operating Balance was a surplus of +$6.6 bln in February, raising the eight month operating surplus to +$9.8 bln.

DEAL FINALISED
Fonterra has completed its sale of its China Farms, a deal they have previously announced in 2020. The buyers are Inner Mongolia Youran Dairy Co (Youran). The transaction proceeds comprise the original sale price of $513 mln plus $39 mln in settlement adjustments, giving cash proceeds of $552 mln.

GST TAX COLLECTIONS STUTTER
February GST receipts were -8.8% lower than the same month a year ago, and this is the largest fall (apart from the pandemic disruptions) since June 2019. On the other hand, income tax receipts are running ahead of the same period a year ago.

YIELDS RISING
The stripped-down Treasury bond auction offered an unusually low $350 mln today, and almost $1 bln was bid. The April 2025 was the most popular and the six winning bidders got an average of a 0.70% yield, which was down from 0.79% two weeks ago when this bond was last tendered. The May 2031 however went for a 1.82% yield, up from 0.94% three-plus months ago at the prior tender for this maturity. The April 2033 portion went for 2.05% yield, up from 1.95% two weeks ago. The inflation-linker went for 1.01% plus CPI, up from 0.87% plus CPI two weeks ago.

BROADER BASE
SMEs accessing credit for cashflow and capital assets have more options. Treasury has accepted non-bank lenders into the Business Finance Guarantee Scheme. Up until now, the scheme has only been available to the banks, despite some non-bank lenders actually specialising in small business lending.

EXTENDED BORDER FLEXIBILITY
Immigration Minister Kris Faafoi says, “Over the past year, we have had to make rapid decisions to vary visa conditions, extend expiry dates, and waive some application requirements across entire visa categories. These decisions have provided more flexibility and certainty to visa holders and employers in New Zealand, and made more migrants available for industries facing labour shortages in a time when New Zealand’s COVID-19 health response needed our borders to be closed. We have been able to make these necessary changes under the Immigration (COVID-19 Response) Amendment Bill, which expires in May 2021. Today, I have introduced a Bill to maintain those powers until 2023."

MIQ LOOSENING
The range of circumstances for those who need to apply for an emergency allocation of space in managed isolation to travel home to New Zealand urgently has been widened today.

DAYLIGHT SAVING TIME ENDS
Remember to "fall back". Daylight saving time ends at 2am Sunday morning (NZT). You will get an extra hour on this change. Also note that Australia is making its change at the same time, so the 2 hour difference will remain unaffected.

GOLD RECOVERS
Gold is trading in Australia, and soon in Asian markets. After a heavy fall yesterday in New York and London it has recovered almost all of that and is now at US$1710/oz.

EQUITIES MIXED
The NZX50 Capital Index is down -0.9% in late trade today. The ASX200 is up +0.3% in early afternoon trade. At their session opening, Tokyo is up +1.2%. Hong Kong is up +0.8% and Shanghai has opened up +0.2%. The S&P500 ended on Wall Street up +0.4% earlier today.

SWAPS & BONDS FIRMER
We don't have today's closing swap rates yet. If there are significant movements today, we will note them here later when we get the data. They are probably unchanged. The 90 day bank bill rate is down -1 bp at 0.34%. The Australian Govt ten year benchmark rate is down -2 bps from this time yesterday at 1.80%. The China Govt ten year bond is up +1 bp at 3.23%. And the New Zealand Govt ten year is up +2 bps at 1.84% and just above the level of the earlier RBNZ fixing at 1.81% (+3 bps). The US Govt ten year is currently at 1.74%, unchanged from this time yesterday.

NZD A LITTLE SOFTER
The Kiwi dollar is marginally softer from this time yesterday at 69.7 USc. On the cross rates we are a little firmer at 92 AUc. Against the euro we down at 59.4 euro cents. That all means our TWI-5 is down marginally to 72.5.

BITCOIN STABLE
Bitcoin is virtually unchanged from this time yesterday at US$59,104. Volatility over the past 24 hours has been moderate at +/- 2.5%.

EASTER HOLIDAY SCHEDULE
New Zealand is now on a long weekend holiday for Easter, and we will be too. We are not posting any content on Friday, but will be back with 'normal' weekend service on Saturday, Sunday and Monday. This 4pm review will next appear on Tuesday, April 6, 2021.

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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42 Comments

by realterms | 1st Apr 21, 4:09pm 1617246554

https://www.stuff.co.nz/business/124720986/real-estate-agent-found-guil…

Seems like pretty typical RE behaviour to me. Interesting that even their own tribunal agrees, if anyone can actually prove what's going on.

by Officebound | 1st Apr 21, 7:04pm 1617257070

I've always felt the 'price brackets' they choose on Trademe which are clearly inaccurate are pretty blatantly false advertising.

by Cowpat | 1st Apr 21, 4:26pm 1617247591

Coming across the newswires that New Zealand will announce early next week tiered DTI ratios for new housing loans similar to those currently in place in Ireland.

by realterms | 1st Apr 21, 4:37pm 1617248255

I hope you're right, but given that Irish house prices are also soaring with low stock levels (sound familiar?) I wouldn't expect a panacea.

by karl seastrand | 1st Apr 21, 5:40pm 1617252037

Cowpat..hope so but it should exclude OO FHBs. it is probably palatable for most that the system is exposed to a little more risk in an effort to help these people into their own homes. But DTIs for investors is another great way to even up the playing field a little more.

by Cowpat | 1st Apr 21, 6:19pm 1617254362

My humble apologies. I should not post misinformation on this day. Having said that , personally I could not see DTI's being put in place by the RBNZ without a collapse in prices first.

by karl seastrand | 1st Apr 21, 7:00pm 1617256821

Cowpat... is that a "requested apology and retraction"?

by fortunr | 1st Apr 21, 4:37pm 1617248242

"The May 2031 however went for a 1.82% yield, up from 0.94% three-plus months ago at the prior tender for this maturity".

Higher interest rates are coming, and the message from bond traders looks quite unequivocally strong

by realterms | 1st Apr 21, 4:39pm 1617248367

Strong, or less weak? Zoom back out to yields over the last few years and the current levels don't look alarming.

by lets_pump_this | 1st Apr 21, 4:37pm 1617248258

Median house price in NZ has now fallen to 9.19 BTC.
Property is going to increasingly be an easy and populist target for the government to get more tax revenue and beat up in general. Not just in NZ but worldwide.

by J.C. | 1st Apr 21, 4:47pm 1617248824

Median house price in NZ has now fallen to 9.19 BTC.

Less than 2.5% of BTC owners would have 9.19 BTC. 96% of BTC owners have less than 1 BTC, according to Glassnode.

BTW, a single BTC is now NZD84K. Doesn't seem like it will be long before we hit NZD100K.

by Foxglove. | 1st Apr 21, 5:07pm 1617250024

Aye lpt, and curled up in that undoubtedly, local government already plotting how they can justify & adjust the rates “formulae” in order to extract that extra “wealth” their ratepayers now possess

by J.C. | 1st Apr 21, 5:14pm 1617250442

But supposedly they are 'cash poor' and cannot pay more rates. The bubble is stuck in its own maze.

by Foxglove. | 1st Apr 21, 5:17pm 1617250639

You sum me up. In both sentences.

by karl seastrand | 1st Apr 21, 6:03pm 1617253433

JC...can't pay the rates? Then take out a reverse mortgage in order to do so. If we could find a way to force numerous people to take out reverse mortgages in their old age it would prevent us from perpetuating the racist class structure where children of property owners become the new slave masters and the people born to non property owners are destined to remain slaves of the (rigged) system.
As I have said before , this is the racial inequality that matters and needs to be addressed instead of focussing on window dressing served up by the likes of Stuff and John Campbell. I can't even watch the Breakfast Show any more as John Campbell is fast descending into the white version of Don Lemon. Recently he has taken to extended discussion on the women's cricket even though he is well aware that barring friends and family there are maybe about 30 people in the whole country interested in it.

by EdwardD | 1st Apr 21, 6:24pm 1617254656

I totally agree Karl. JC and Stuff are too woke and I gave up on them some time ago.

by EdwardD | 1st Apr 21, 6:27pm 1617254872

Forgot to say you are also right on women's cricket, but MM us attempting to ram it down our throats.

by karl seastrand | 1st Apr 21, 7:14pm 1617257649

ED...it is in no way sexist either. Female models receive far more air time, exposure and infinitely more money than their male counterparts for doing identical jobs. They are naturally paid far more due to commercial reality and fair enough. And with sport it is the same principle but it just works in the opposite direction.
John Campbell used French cut when talking about the cricket the other morning. I would have thought he would be woke enough to understand that to refer to an uncontrolled, weird looking cricket shot as a French cut is completely unacceptable and racist. I should complain to the Broadcasting Standards people and request that he apologize for his racist slur. He has already been warned about commenting on Matties tight trousers.. LOL.

by Foxglove. | 1st Apr 21, 8:15pm 1617261319

Oh and whilst on that crusade, since an event in the West Indies in the 1930s, a ball bowled by a left arm bowler that is an off break is called a chinaman. There is much deep seated racism embedded in our history. For a start, in that case, all of Somerset Maugham’s novels, novelettes and short stories should be taken off the shelves and burned. Oh but then again, May 1933 the Nazis thought that one up first didn’t they. Alternatively, perhaps without authoritarian intervention and conditioning, those with maturity and intelligence can just work out for themselves what is right and wrong.

by karl seastrand | 1st Apr 21, 9:14pm 1617264897

Focglove...agree and the World Snooker Championships are coming up but the commentators will be so scared of being cancelled that I doubt they will use the phrase Chinese snooker which used to be an accepted and common non racist phrase. Hampered just doesn't sound right to me.

by Foxglove. | 1st Apr 21, 8:24pm 1617261885

“If we could find a way to force people to........ “ That is alien and repugnant. You are in the wrong country comrade. Take your hammer and sickle and bash and thrash around somewhere else. This nation, for better or for worse, still has freedom.

by the Joneses | 2nd Apr 21, 8:10am 1617304244

Over reaction a bit. At the moment the oldies are 'forcing' me to pay their superannuation. Where is the freedom in that?

by the Joneses | 2nd Apr 21, 8:11am 1617304268

Duplicate..

by mfd | 2nd Apr 21, 6:48am 1617299309

Perhaps what you're grasping for is 'inheritance tax'. I've heard very few good arguments against introducing an inheritance tax of at least the same kind of level as income tax, and if would certainly act to increase social mobility. I guess social mobility is something people only want to work in one direction, which makes no sense.

by Foxglove. | 2nd Apr 21, 7:28am 1617301722

call it by its real name then. ie, death duty.

by linklater01 | 2nd Apr 21, 11:27am 1617316037

mfd,

I advised people in the UK on Inheritance tax/death duty issues. It was an accepted part of the tax system and has been in place for many years.

I would certainly support its introduction here, though I recognise that while providing governments with an additional income stream, it would also provide opportunities for tax advisers. I believe it would be fairer than the wealth tax proposed by the Greens.

by karl seastrand | 2nd Apr 21, 7:11pm 1617343893

mfd...a person who has parents who own their home and have a rental or two has about a 30 metre head start in a 100 metre race against somebody born into a family of renters. That does not sit well with me and perpetuates our racial inequality probably more than anything else. I am grasping for a fairer system where success is largely predicated on what family you are born into. In the current climate, especially in relation to property, social mobility is a pipe dream for all but a few. It is not right. But then I guess keeping (unfair) advantage for your kids is more important to you than fairness.

by RickStrauss | 1st Apr 21, 5:27pm 1617251254

The city giveth, and the city taketh away.

Council might be able to capture some of that betterment simply by raising the land value component of rates, currently at the lowest it can be. This would also encourage intensification.

Of course, might depend how many in council positions own large pieces of land in valuable suburbs.

by karl seastrand | 1st Apr 21, 5:46pm 1617252379

letspumpthis...meth dealers are also a popular target. Not sure what you are saying here. When you target people that damage society and cause misery to others it will always be popular. And so it should be.

by J.C. | 1st Apr 21, 4:41pm 1617248489

More anecdotal evidence of how dire NZ h'holds savings are and the extent to which people are living paycheck to paycheck. On average, h'holds are only saving $400 p.a. and that possibly includes Kiwisaver. This is stark considering that the ASB suggests that 83% of h'holds have $10,000 in cash savings.

https://www.newstalkzb.co.nz/on-air/simon-barnett-and-phil-gifford-afte…

by realterms | 1st Apr 21, 5:34pm 1617251694

I wonder how offset mortgages are counted in this, and what fraction of households have them. I would guess more than 17%, in which case they must not be counted as cash savings...

by Foxglove. | 1st Apr 21, 5:53pm 1617252800

That confirms just about all previous governments bemoaning the poor savings abilities by NZrs by international standards. And yet for the last few years we have had extremely low interest rates, now even lower for CV19 reasons, and a government signalling that it wants its people to borrow to spend to spur the economy. It’s absolutely nuts, beyond the face of reason.

by Rosenstein | 1st Apr 21, 7:07pm 1617257221

That's why their productivity commission is also bemoaning the lack thereof but in the way an alcoholic bemoans a hangover

by Foxglove. | 1st Apr 21, 8:28pm 1617262085

Apparently, true blue embedded alcoholics don’t actually get hangovers. That just goes to underscore your metaphor.

by Noncents | 1st Apr 21, 7:30pm 1617258611

From my Payroll days 70-80% of people would be struggling (i.e. payday loans) if they missed a pay period, with around a quarter struggling if their pay were even a day late.

Lots of KS holidays, or not joining - simply because they cannot spare the 3%.

by taimaiakka0 | 1st Apr 21, 4:59pm 1617249551

'CoreLogic's HPI jumps again'

FHB s@$& again

by karl seastrand | 1st Apr 21, 5:36pm 1617251777

So Faafoi just ensured that almost none of the 300 000+ temporary visa holders are going anywhere till at least 2023. Somebody deliver that man a free bottle of liquor and a pizza please.

by custard | 1st Apr 21, 9:35pm 1617266142

Good news – our newly imported workforce are more than ready and willing to deliver - in fact they'll do it for nothing - providing the "price" is right.

Our lunatic immigration and population policy just keeps on giving – even with borders "closed" - just another Ardern failure in the making.

I guess the lesson is that a low level communication degree might get you elected – but in terms of producing meaningful action or policy – it sadly delivers nothing.

by linklater01 | 2nd Apr 21, 11:29am 1617316196

custard,

What a very short-or selective-memory- you have. You might want to look at the immigration figure during the Key years.

by custard | 2nd Apr 21, 1:15pm 1617322554

Although they ended up as bad as each other – what I consider poorly constructed mass immigration policy was actually National policy at the time – and regrettably they achieved what they set out to.

Labour’s 2017 policy in a general sense was to reduce immigration numbers by around 20 to 30,000 if I recall – and this they failed at spectacularly – the last 12 months, especially the last 3 or so before Covid, saw the numbers simply soar out of control.

Ultimately a bat succeeded where Ardern couldn’t.

by Foxglove. | 2nd Apr 21, 1:30pm 1617323435

Fair enough. As well it is rather counterproductive when stalwarts can only offers s an excuse, that their chosen party, on performance or otherwise, is not as bad as another. Like you I have little confidence or respect for either.

by alittle | 1st Apr 21, 8:41pm 1617262863

https://www.theguardian.com/world/2021/mar/31/new-zealand-readers-say-h…

True. If serious would have stopped interest only loan by now .....no need to express as is known to all specially Mr Orr and Mr Robertson and may be that is one reason that are getting cold feet as have no real intent. Both are BS.