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A review of things you need to know before you go home on Wednesday; Auckland house sales strong, another good dairy auction, labour force growth stunted, swaps stable, NZD soft, & more

A review of things you need to know before you go home on Wednesday; Auckland house sales strong, another good dairy auction, labour force growth stunted, swaps stable, NZD soft, & 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.

BEST MONTH EVER - I
Auckland realtor Barfoot & Thompson's sales volumes and selling prices both set all time records in March. Sales volumes were +68% higher than in March 2020 which was just before the pandemic affected results. Median prices rose +13% versus a year ago, of which +3.8% was since February 2021.

ANOTHER GOOD AUCTION
Even though overall prices changed little, they remained high at the latest dairy auction, bolstered by strong buying appetites by Chinese and other Asian demand and much stronger than in previous auctions for this time of the year. Prices are up by more than +11% over the past three auctions. Today brought further rises for butter and cheese. No-one has changed their farmgate payout prices, but there seems widespread acceptance that "the risks are to the upside" now. It is a good time to be a dairy farmer.

BEST MONTH EVER - II
It is not only dairy prices that are rising. Prices for other commodities are up as well, including for meat and logs. These three powered the ANZ NZD commodity index to a new record high, aided by the recent currency depreciation. In world price terms, prices are high, just not at record levels.

URGENT - USE PROPER PASSWORD PROTECTION
A simple change to password behaviour could save New Zealanders millions of dollars says CERT NZ, the government agency which deals with cyber security incidents. In 2020, Kiwis lost almost $17 mln through cyber attacks. In some cases this financial loss was due to poor password practice, like weak passwords or reusing passwords across multiple accounts. Use a password manager.

LABOUR FORCE GROWTH SLOWS SHARPLY
On May 5, we will get the March update of the state of our labour market. Today we got the update on the growth of our labour force working age population. It was up +1.2% from a year ago, and that is a slowing expansion as the borders have shut off most migration. In March 2020 the working age population grew +2.5%. One consequence will be that the median population age will start to rise fast and we will soon be at a situation where more people retire (and need their benefits funded) that enter the workforce. The latest data shows that less than 1000 people per quarter enter the workforce at age 20, while almost 10,000 potentially leave it at age 65. The reality is than many over 65s continue to work (me included), but the difference is will get increasingly larger if immigration remain blocked. Boomers probably won't care, but millennials will when they figure it out that their taxes will need to rise sharply. (Then boomers will care, if voters choose to limit benefits rather than raise taxes.)

CARS POPULAR AGAIN
March was a strong month for both new and used import car registrations. Easing supply issues helped. Comparisons with year-ago levels are fraught, but they were up +20% above March 2019 levels for new cars, and used imports level-pegged on the same two-year comparison. For the first time in a long time, new registrations for rental cars jumped (to almost 500). Sales of NEVs were up strongly, boosting the sales of small cars. Still, SUVs still take 76% of all new car sales, and while the largest single group, small SUVs are still only winning a bit over 40% market share.

THEY ARE KEEN, US NOT SO
The setting of the trans-Tasman travel bubble has released a surge in airline bookings on the first day - but much more from Australia to NZ than the other way around.

GOLD SOFT
Gold is trading in Australia, and soon in Asian markets. After moving around quite a bit, it is currently slipping to US$1737 and marginally below where it was this time yesterday.

EQUITIES MIXED
The S&P500 ended the Wall Street session earlier today down a minor -0.1%. In Tokyo, they have opened today flat while Hong Kong is down -0.9% in early trade. Shanghai is down -0.8% in their early trade. Meanwhile the ASX200 is up +0.2% in early afternoon trade, and the NZX50 Capital Index is up +0.5% in late trade and making back most of yesterday's retreat.

SWAPS & BONDS YIELDS SLIP
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 -3 bps from this time yesterday at 1.71%. The China Govt ten year bond is holding at 3.23%. And the New Zealand Govt ten year is down -4 bps at 1.77% and just above at the level of the earlier RBNZ fixing at 1.76% (-5 bps). The US Govt ten year has fallen to 1.66%, and -2 bps from this time yesterday.

NZD A LITTLE SOFTER
The Kiwi dollar is holding at a higher level than where we opened at today, now at 70.6 USc but that is a small day-on-day retreat. On the cross rates we are little-changed at 92.2 AUc. Against the euro we soft at 59.5 euro cents. That all means our TWI-5 has dipped to 72.9.

BITCOIN RETREATS
Bitcoin is lower again today from where we were this time yesterday, now at US$57,755 and a fall of -2.0%. Volatility over the past 24 hours has been modest at +/- 1.5%.

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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End of day UTC
Source: CoinDesk

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41 Comments

"Boomers probably won't care, but millennials will when they figure it out that their taxes will need to rise sharply."
The rationale behind reintroducing Death, Inheritance and Gift Tax.

?

12
up

Nice try Printer..Dementia kicked in already?

Very sad to see a nasty post get the most upvotes, says a lot about the commenters...

You don't get it do you. The anger that is building from the disgusting inequality that has been building in this country over the last 20 years.
Did you ever stop to think that this time might come? Obviously not.

"building in this country over the last 20 years" is a myth , pure and simple .. NZ Gini coefficient barely budged during that time.
" The anger that is building .." is mostly confined to a few sore losers like yourself.

Try directed that to those young Healthcare professionals, which still stuck to pay students debt, have to stay in city (for their professional skills) and facing higher rent, with most of the OZ banks laughing when they try to get a loan to purchase house.. as a single person. And really do it while you're waiting for your potential terminal ill screening process.

The alternative to taxing the younger generation is to tax the older one - it's even less painful after they have gone.
Someone kicks the bucket with 70 properties in their portfolio? They get taxed at distribution or resolution and the proceeds go towards Government revenue.
The sad thing is, though, that 90% of people who read that suggestion will immediately think "Not a worry. I can get around that!" rather than seeing it as 'giving back'
What are a lot of the super rich doing as we speak? Committing to distribution of their wealth to the community before they go. That's a pre-emptive Death Tax.

David's at risk of starting intergenerational warfare 2.0 today (after this mornings online battle). I didn't realise boomers could type so fast (jokes!)

"The rationale behind reintroducing Death, Inheritance and Gift Tax."

The rationale behind flinging the immigration doors wide open, more like.

Don't provide for old peopled incomes via tax.
Compulsory Universal Kiwisaver would mean National Super could phase out over after 30 year.

Only if you can't access it to buy a over priced house.

CARS POPULAR AGAIN

Correlations between house prices and car sales are always interesting. This is from 2018 but it shows the relationship across the ditch.

https://www.businessinsider.com.au/australia-house-prices-luxury-car-sal...

Plenty of wise money going into collectibles to hedge against currency debasement. Just look at the price of old Commodores and Falcons

And plenty of dumb money going into other premium vehicles which won't hold their value at all.

Plus, after you get either, you need a new house with a bigger garage.

HQ holdens are a good example. When I was a high school student 13 years ago, I decided against buying a mint, rust free HQ wagon for 3500$ running a 186. Probably my biggest regret from childhood. Would fetch 30k to the right person today.

Was it the brown paintwork that put you off?

My Dad sold Holdens for decades - most memorable demonstrator he brought home was a 1970s Monaro - even went fast when it was standing still.

No it was the 3.5k. At the time, that was literally every dollar I had, never mind repairs and gas

The latest Irish property report for the first quarter 2021
https://ww1.daft.ie/report/2021-Q1-houseprice-daftreport.pdf?d_rd=1.
Remarkable the low number of listings nationwide and for Dublin and the ongoing problems their housing market now encounters with DTIs in place.

Then boomers will care, if voters choose to limit benefits rather than raise taxes.)

in which alternative reality will this happen -- the right will never vote to cut super -- which is the only benefit the boomers will be getting nor will it raise death and inheritance taxes and the left will never limit benefits in fact thats a growing gravy train -- and even proposing an inheritance tax would be certain death at the polls -- hell a CGT killed them twice - and thats a whole lot better than taxing the money granny saved all her life for the moko's

No Party can abolish super or even mention it - again a total wipeout at the polls -

Very soon we'll get to a point where there are three options: 1. cut super, 2. raise taxes or 3. borrow. The left aren't going to have too many headaches over 2 and 3, but for the right, none of these are a palatable option. It could be argued that Bill English's attempt to move the age of eligibility of super from 65 to 67 is what cost National a close election in 2017.

Yes the numbers coming in 10 years time for super and hospitals are scary. The bean counters know it is coming. Government revenue will have to rise. Chances of tax cuts in 10 years are zero.

You are probably right. Automation of work 'might' save us, if we can continue to scrape resources for a while out of a withering planet.

I'm a boomer and I believe that Super. should be means tested and moved to 68.

WHY

... move it to 75 . . and stop flooding the country with immigrants , until we've built 100 000 homes , and planted the 1 billion trees ...

A shrinking labour force could be a good thing if we increase productivity.

Good luck with that one:

“NZIER concluded that New Zealand's low productivity is because we don't use as much capital as many other countries. That could be because the cost of capital in NZ is high relative to labour, causing us to use more labour than capital for each unit of output.”

Low cost labour - where on earth would that come from.

https://nzier.org.nz/about/economics-explained/productivity/

Machines and AI are supposed to shrink the workforce anyhow. They don't take annual leave, sick days, or even sleep, for that matter.

That's the way I think it will go eventually. Employers will just think fudge a robot is easier to deal with and change to a automated enviroment. The result will be more unemployment, bigger society problems. I don't believe more jobs overall will be created from this shift. Amazon looks like to be heading this way too. Robots will handle all the packing and once automated logistics from warehouse to a customer door is ironed out, there goes human interaction apart from the maintenance techo . At least no one will have the problem of pissing in bottles anymore...

That ANZ NZD commodity index is probably a better indication of inflation than the CPI

No probably about it. The commodity index indicates that the prices for necessities is rising fast - inflation here we come

"1000 people per quarter enter the workforce at age 20, while almost 10,000 potentially leave it at age 65"

I suppose it could be suggested that as time goes on a reasonable number of that 10,000 were immigrants themselves.

So do we now need more immigrants coming in to look after a growing number of retiring immigrants?

Probably good time to sell your dairy farm as the parasites are coming in thick and fast

Regarding a password generator - I use Password Tech

https://sourceforge.net/projects/pwgen-win/

For a password manager I use a notebook (yes I know).

KeePass works well too - lightweight and open source. It has a password generator built in too.
https://keepass.info/index.html

Wonder how many of those BTC mogul using it.. hmm

I like the notebook idea even though, as you suggest, if it is found obviously trouble. But I can never remember new ones. How can anyone trust a internet link to provide them?

"Hollywood director James Cameron's enviro-farm turns to dairy cow grazing"
Not a Headline I expected to see, especially not so soon. RNZ

What a phoney hypocrite.