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A review of things you need to know before you go home on Friday; mortgage rate changes, higher credit card use, lower balances, credit conditions easier, swaps stable, NZD soft, bitcoin slumps, & more

A review of things you need to know before you go home on Friday; mortgage rate changes, higher credit card use, lower balances, credit conditions easier, swaps stable, NZD soft, bitcoin slumps, & more

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

ASB raised its 3, 4 and 5-year fixed rates, and cut is 1-year and 6-month fixed rates today. Update: Westpac has followed. More here.

None here today either.

Credit card balances (C12) continue to atrophy, down -10.1% in March from a year ago. The Buy-Now-Pay-Later impact continues to eat away at how much cardholders have in these balances. Apart from the pandemic dip, these balances are now back at 2014 levels at under $6.2 bln.

Transactions using credit cards however (C13) rose in March from a year ago, up +10.3%. Users are avoiding the high cost of debt on these cards, but not their use. That is a win for the tax-dodging Visa and MasterCard interchange networks, but a loss for the tax-paying banks.

We missed advising that our Key Bank Metrics Tool was updated last week with the December 2020 RBNZ Dashboard data. It is data that shows a 'strong' banking sector with margins, profitability, and financial strength unaffected by the pandemic. The March 2021 data will be available on May 31, 2021. This tool allows you to inspect the bank financial statements individually, and to compare them. If makes available comparisons over 117 different metrics.

There were 451 lifestyle block sales nationally in March, a big drop-off from February, and from March 2020. But REINZ have changed the way they report this data, so some of that reduction may end up by being attributed to that change.

There were 134 farm sales in March, a rise from the 105 in March 2020. It was an especially strong month for the sales of dairy farms with 32 changing hands in the month, up from just 10 in March 2020 and 13 in March 2019. The average dairy farm sales transaction for a March in the past five years was 23. The price/ha for dairy farm sales is stable at $32,644 and little-changed from a year ago. ($33,538/ha in February 2021.)

The RBNZ Credit Conditions report (C60) for Q2-2021 shows loan demand for residential properties is surging. But bankers don't expect that to continue, expecting it to be flat over the next six months. Where they see rising demand in the next six months is from both commercial property borrowers and rural borrowers. The availability of funding for this demand is no issue, according to these survey responses. Interestingly, there has been a sharp easing in "Your bank's perception of risk", as well as "Your bank's risk tolerance". Bankers think money is easy to lend for qualified borrowers.

In Japan, there has been a surprise improvement in the April factory PMIs, but their services sector is still contracting.

The gold price is now trading in Australia, soon in Asia. It is up +US$5 at US$1,789/oz from where it closed in New York earlier today, but down -US$7 from this time yesterday.

The S&P500 ended today's session -0.9% lower and giving up all of yesterday's gain. Today it sank as the Biden Administration weighed raising taxes on the wealthy, and hiking the US capital gains tax. So far this week, the S&P500 has booked a net loss of -1.2% off its record highs. Shanghai, it has opened +0.4% higher and Hong Kong is +0.8% higher at their open. The very large Tokyo market has opened down -0.7% in early trade and heading for a -2.4% weekly retreat. The ASX200 is flat in early afternoon trade (-0.1%), and the NZX50 Capital Index is flat in late trade. The ASX200 is heading for a flat weekly result, while the NZX50 Capital Index is heading for a minor -0.7% loss.

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 little-changed. The 90 day bank bill rate is up +1 bp at 0.35%. The Australian Govt ten year benchmark rate is up +2 bps from this time yesterday at 1.67%. The China Govt ten year bond is unchanged at 3.18%. And the New Zealand Govt ten year is up +2 bps at 1.59% and slightly below level of the earlier RBNZ fixing at 1.58% (-3 bps). The US Govt ten year is holding at 1.55%, similar to yesterday's level.

The Kiwi dollar has slipped to 71.7 USc on a rising US dollar. Against the Aussie we have held at 92.9 AUc. Against the euro we are soft at 59.6 euro cents. That means the TWI-5 is down slightly to 73.6.

The bitcoin price is now at US$49,473 and another -9.1% lower than where it was this time yesterday (US$54,441). It briefly dipped below US$49,000 this afternoon. At 4pm on Friday, April 16, this price was at US$63,058, so it is down a full -21.5% and that's a raging bear market. Volatility in the past 24 hours has been extreme at +/- 7.0%.

With ANZAC Day falling on Sunday, the "day off" holiday has been Mondayised in New Zealand. So the return of this briefing will be on Tuesday, April 27, 2021.

This soil moisture chart is animated here.

Keep ahead of upcoming events by following our Economic Calendar here ».

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End of day UTC
Source: CoinDesk

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How are the common taters feeling about the last week in bitcoin? What a wild ride for the approximate value of that particular brand of that particular style of electricity usage.

Nothing goes up in a straight line. Not gold not bitcoin.

The only question is how many of you can hold through when gold is stuck at USD1000 and BTC at 40K for 10 months.

The answer to that question defines the probability of a rebound.

And don't overestimate each other's holding pow(d)er.

Around 30% falls followed by 100% gains are now common place in a BTC bullrun. Bitcoin is performing like clockwork as per usual.

In fact, the real concern is if a 2-4 week pump continues without the 30% retrace which is necessary to consolidate holdings amongst folks who understand the space. It shakes out the idiots who play options and moves tokens to the long term hodlers. At this rate expect 100k per coin by the end of May.

For those who forgot about the last four months a brief list of BTC retraces in 2021:

-31% in January which lasted 19 days

-26% in February which lasted 7 days

-18% in March which lasted 12 days

-27% in April which is currently in its 9th day

Nothing out of the ordinary at this time

My ETH profits have dropped from 4000% to 3600%.


We needed ETH in 2018 now all that stuff can be done on BTC.

My BTC profits are sadly only 1500%.


Because the market has not priced this in yet.

Yes but on how much Bitcoin ? profits are irrelevant if you only have a hundred bucks in it. Houses made over $30K in a month because your now forced to have so much invested. I'm picking not to many people have a million invested in Bitcoin.

The prevalence of one dimensional thinking in this country does get tedious fast.

Sometimes I feel like I’m talking some alien language when I mention anything that isn’t in line with the nz herald/stuff narrative. Inflation? What the hell is that?

Yes but how much money is owed to the bank on that house?

This is a placeholder to comment in another week from now.

Just wish that deposit rates will start improving. The boomers are waiting eagerly...

DXY will hit 100 by the end of next year. So yeah deposit rates will go up but not before the NZD becomes what it is.

BTC approaching 40K a bit faster than i thought this morning.


The BIG news is that ASB has raised its interest rates for 3, 4 & 5 year terms (the cut of 0.04% for the 1 year is a token gesture). No doubt this increase is going to be followed by other banks very soon. It's very important because IT'S A CLEAR SIGNAL THAT INTEREST RATES HAVE BOTTOMED OUT AND ARE STARTING TO RISE. The rise is not that big, it's the message that interest rates are rising and the uncertainty of how much more they will rise by, which will scare people and put the brakes on borrowing more.


First time i agree with you Yvil.

Excellent news.

Looks like this government is beginning to step to the plate on the housing lending ponzi too. Exciting times ahead!

"Excellent news"
It's good news to some and bad news to others, it depends where people are at with their mortgages and what they want for their future. We all have different circumstances, what's important is to recognise this change so we can all make the best decisions for ourselves.

Cueing TTP with his 'soft landing'.

Here's hoping Yvil!

interesting side comment about how those who pay their credit cards off on time are impacting negatively on parent banks. wonder if that window for customers is going to be squeezed shut. already annoying enough to find at retail, hotels,motels are worst, a 3% or so surcharge when you use a credit card, used to be in the beginning, that the retailer was being advantaged by the guaranteed payment as opposed to a dud cheque. guess now that cheques are long gone, the playing field might be in line for another tilt.

True and cash (paper) payments are on the rise in many countries. Merchants can no longer afford these fees.

Also look at your local dairy they don't accept credit just debit, this will increase.

Try Germany.
Don’t dine out expecting to put it on the card.

We got done over in Germany with the AirNZ so called smart currency card. First hotel took a surety againstit but didn’t clear that off when we checked out and paid our account in full. Arrive at next hotel, not enough balance in Euros available. Had to use usual credit card, That first surcharge took 28 Days to clear, we were home by then and then ended up with Euros on the card which no damn use anymore. AirNZ make no warning about this at all when they are selling the product. They now say just put up your credit card as surety when you check in and pay with the currency card when you check out. Blimey have they seen the queues at check out time in EU hotels, frankly on this basis the cards are no use except for small scale retail, hospitality etc. What it is starkly, they take your money and then deny you access to it. Folks don’t go with it. It sucks!

Bullish for cryptocurrency. Instant settlement and liquidity across every currency and asset you can think of. Every single person already has a POS terminal in their pocket.

I hate surcharges. Maybe pay in 10c pieces so the merchant has cash handling fees.

Would you rather everything just cost 1% more, and hid the surcharge from you?

You should really get a discount for EFTPOS. Credit card is probably about the same cost as cash (having to maintain change etc).
I don’t mind the surcharge except at bars: they are already taking about 400% on my beer, you think they could shout the transaction fee!

So you'd be happy with a 1% discount for eftpos, as opposed to a 1% surcharge for credit cards?

Jeez, no wonder briscoes are so successful...

What else happened?

We realised that you can’t trust some RE agents. I knew some were bad but I didn’t realise to what extent and the lack of moral compass that embodies some.

For those who offered advice/interest, we didn’t get the property. It’s now up on trademe as priced by negotiation.

We were fools that fell for the agents dribble on what the vendor would accept. What peeves me off is the agent was comfortable with us forking out money on reports and valuations when our figure wasn’t ever going to cut it. We have 2 kids, that 1.5k could’ve been much better utilised.

Not all is lost though we now have a clearer direction in both what we want and how to do it moving forward.

Anyway, we were more relived than upset yesterday. It seems we were getting lost in FOMO. We’ve been pre approved/re approved for 7+ months now and keep missing out on higher bidders but this time... we were the only bidders yet still lost, the joys!.

I wish that didn't sound so familiar. Sorry.

It should be made law for vendors to list their asking price.

Never trust a real estate agent, bank manager, car salesman etc. There interest is in making money only.

Sorry to hear that Sarah. The agent doesn't know where the vendor and buyer stand price wise because often vendors/buyers don't state the full price they are willing to accept/pay, his/her job is to bring together two sets of people with opposing wishes (most/ least $ possible).
There is good news for you though, you were the only interested party... Pause for a second and think how the vendor feels... Don't contact the agent and give him the cold shoulder for a week, then if you're still interested in the house make a conditional offer (even if you have the finance!) at the price you wanted to pay! Even if it's $100'000s lower than what the vendor wants. The agent may say "I can't present that offer" but he is legally obliged to present your offer, and see what he comes back with. Good luck

Sad news for you and your family and Sarah. That's a lot of money to spend with no outcome yet. I would front foot this and contact the Agent on Tuesday. State your situation, i.e. that you are still interested and would like to negotiate with the vendor. Remember the Agent wants a sale. He/she doesn't actually care what the house sells for. They just want a signed contract, along with the commission that follows. Maybe move your offer upwards if you can to show some willingness/goodwill. Make it your last, full, final offer. You have to mean it and the Agent has to believe you. This is the hard part. Be strong, be tough. You're in the box seat right now. Right now the vendor only needs one buyer. The Agent will know you are his/her best bet. Good luck.