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A review of things you need to know before you go home on Monday; more mortgage rate changes, a home loan borrowing bender, new car sales still hot, swaps stable, NZD stable, & more

A review of things you need to know before you go home on Monday; more mortgage rate changes, a home loan borrowing bender, new car sales still hot, swaps stable, NZD stable, & more

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

MORTGAGE RATE CHANGES
Kiwibank has trimmed its two year fixed rate to 2.55%, but raised its three and five year fixed rates. TSB has matched the ANZ 2.45% 18 month fixed rate.

TERM DEPOSIT RATE CHANGES
No changes to report today.

IT'S ALL ON THE HOUSE, AGAIN
David Hargreaves looks at the all-night mortgage borrowing bender Kiwis are going on while lending to 'productive' parts of the economy withers.

BIG BANK CHANGE
Westpac NZ CEO David McLean is retiring in June with bank executive and ex-politician Simon Power to serve as acting CEO as a search for a permanent successor takes place.

ONLINE EFTPOS NOW AVAILABLE
Paymark (now owned by Worldline/Ingenico, a Paris based MNC) has signed up BNZ as its first big bank to offer on-line EFTPOS to its customers. EFTPOS avoids Visa or Mastercard and their fees, so can be delivered cheaper.

WHAT ABOUT IMMIGRATION?
The Government has asked the Productivity Commission to undertake a wide-ranging review of current immigration settings.

BARBARIANS AT THE PETFOOD GATE
Christchurch-based Natural Pet Food Group (NPFG) has been bought by private equity funds, KKR. NPFG is a marketing distributor rather than a manufacturer, and KKR want it to build out its product range in international markets.

SCARCER I
Asking prices on Realestate.co.nz's portal declined by $18,340 (2.1%) in April suggesting a cooling housing market nationwide with new listings similar to 2019. The weeks of available inventory of houses for sale has declined to just 8 weeks now, down from 10 weeks at the end of March.

SCARCER II
Treasury has announced a May Government bond tender set to raise $1.3 bln in four events. That compares with the April tender program that raised $1.65 bln in five events. The better-than-expected Crown accounts mean less new funding is now needed. And recall, back in December 2020 they were raising $1.9 bln per month. The new lower overall supply is likely to keep bidding strong and therefore keep yields depressed.

THE POOR PAY (SLIGHTLY) MORE
Statistics NZ released is Q1 inflation data by household groups to see how each is being impacted by price rises. Overall, CPI rose +0.7% in the year to March. But for beneficiaries it was up +1.7%, for Māori it rose +1.1%, for retired people by +1.2%. Those spending the most in their household got only a +0.4% rise while the lowest-expenditure household group saw prices rise +1.2% in the year.

BINGEING ON NEW CARS AGAIN
Year on year changes to new car sales mean nothing this month given that April 2020 was a full lockdown month. But sales in April were good for an April month, being +30.2% higher than the comparative month in 2019. Sales of new commercial vehicles (dominated by tradie utes) was up +26% on that same two-year-ago basis.

GOLD FIRMS
The gold price is rising today. It is now at US$1773/oz and up +US$5 from this time Friday as trading opens in Australia and Asia.

EQUITIES MIXED
Hong Kong and Shanghai markets are closed todat for their Labour Day holidays. Tokyo has opened however as is down a rather sharp -1.5% in late morning trade. The ASX200 is flat in early afternoon trade, and the NZX50 Capital Index is also flat near the end of today's trading. The S&P500 futures is recording a small +0.3% rise.

SWAPS & BONDS MIXED
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 unchanged at 0.36%. The Australian Govt ten year benchmark rate is unchanged at 1.70%. The China Govt ten year bond is down -2 bps at 3.19%. And the New Zealand Govt ten year is up +3 bps at 1.69% and well above the level of the earlier RBNZ fixing at 1.65% (+3 bps). The US Govt ten year is down -2 bps at 1.63%.

NZ DOLLAR STABLE
The Kiwi dollar is now at 71.7 USc and little-changed from this morning. Against the Aussie we are also little-changed at 92.9 AUc. Against the euro we are stable at 59.7 euro cents. That means the TWI-5 is now at 73.7.

BITCOIN FIRMS
The bitcoin price is now at US$58,069 and that is up +2.1% from where we opened this morning. Most of the rise today has happened since lunchtime. In the past 24 hours, volatility has been moderate +/- 1.9%.

This soil moisture chart is animated here.

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Daily exchange rates

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End of day UTC
Source: CoinDesk

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24 Comments

The Government and its separatist aspirations have a little explaining to do. Especially Article One ToW. There is no veto.

Kawanatanga – Article 1 provides for the Government to govern, though not in isolation from other provisions of the Treaty of Waitangi. The right to govern is qualified by an obligation to protect Māori interests. This aspect of the agreement is further established within the other articles of the Treaty.

https://www.otago.ac.nz/maori/otago667416.pdf&ved=2ahUKEwiKvpi60KzwAhUs4...

When in power do as the Romans did. Somehow the NZ electorate defeated the spirit of MMP and installed a standalone government. Having said that, a Labour/Greens coalition might have been even deeper and further along in these directions. Scary though to think, going by the present status report, that looks a likely result in 2023.

Ethereum breaks $3000, making its creator a crypto billionaire. Hard to think that a year ago it was around $190

Finally a comment related to financial daily news news, giving BTC a hurry up as well (
!

Interestingly, Japan's largest independent exchange Bitbank added ETH / JPY just after March 2020. I've been DCA'ing ETH like a zealot since 2019. Would be happy to see it a prolonged period of sideways action. It's devaluing my fiat.

BTC all the way.. I don't have a strong enough conviction to hold or even buy Ethereum as a store-of-value, unlike BTC, Ethereum lacks a credible built-in monetary policy. Ethereum is more a momentum trade and I'm not momentum trading, I'll leave that to Wall Street Bets and Dogecoiners.

I'd advise Ethereum holders to take some profit and put it into BTC, indeed this is what WILL happen. Have Fun :)

3k is nothing to get out of bed for. Time is on our side. Put that Forbes interview on hold. See you at 5k.

I don't have a strong enough conviction to hold or even buy Ethereum as a store-of-value.......

Seems like you're a fair way behind the 8 ball. ETH was not designed to be a 'store of value'. Regardless, by sheer interest in its application and the development involved in the platform (where many of the smartest people in tech development are heading), attitudes and perceptions are changing to the extent that many of the more informed experts would not be surprised to have an even greater market cap than BTC. Furthermore, the price action and adoption of ETH is following an uncannily similar pattern to BTC prior to 2017.

I've followed ETH since its fork [from ETH Classic]. I understand its roll in the ecosystem and that ETH developers don't claim it to be a store of value. My concern is that people are buying it, believing it's a Bitcoin competitor.

Saying it's following a similar pattern to Bitcoin may be true as the network effect is undeniable, yet feeds into false perceptions of ETH. ETH is probably a good buy, I'm simply not interested in purchasing it myself. Rather I'll keep allocating fresh capital into Bitcoin.

I'm with you Zack, BTC is where 90% of my investment is going. ETH has so many challengers (and challenges to solve) over the medium term its hard to imagine that its market cap won't be diluted. A lot of it's price movement seems to be on the back of Polygon too, which is good for ETH now but raises questions about ETH2. Good to see the ETH2 testnet launch successfully, but full integration is still a long way away, not to mention things like miner pushback switching to PoS. In the meantime Solana is looking stronger, and pancake just did more daily transactions than the entire ETH network. Very early days of course so people will always do well long term in both, but BTC is still the ultimate and most importantly increasingly scarce layer 1 store of value. Everything else will be judged by utility.

What a load of bollocks. As soon as central banks release their own crypto your playtime crypto’s will be history. The naivety of the btc and co mob is mind boggling.

And Westpac's shares surge on very healthy numbers , with the "mortgage lender "making new year highs . What was Covid again.

The magic money fountain continues to deliver. Back slaps all around.

ETHEREUM FIRMS
The ethereum price is now at US$XXXX and that is +/-% from where we opened this morning. Most of the rise today has happened since sometime. In the past 24 hours, volatility has been +/- %.

This section will inevitably appear in the breakfast briefing/daily summary.

So Auckland looks fairly green in that soil moisture chart. But we still have water restrictions.

Sure. Soil moisture isn't what comes out of your tap.

https://aucklandwatersupply.co.nz/

Is asset price inflation without consumer price inflation sustainable forever? If not are we expecting consumer hyper inflation or asset deflation? Does the RBNZ have a position either way, or do they think asset prices can go up forever while the local dairy owner still charges $2 for a pie.

12
up

Asset price inflation is apparently ‘good’ because they are assets, but how good is it paying off a $1 Million mortgage on a moderate income? Once this mad buying binge eventually wanes, the hangover will be epic.

Asset price inflation is apparently ‘good’ because they are assets, but how good is it paying off a $1 Million mortgage on a moderate income? Once this mad buying binge eventually wanes, the hangover will be epic.

Depends, people could have less spending capacity due to servicing higher mortgages and rents. Asset holders might have more protentional purchasing power due to receiving rents and having low mortgage obligations.

Depends if people are reinvesting, saving or spending such capital on consumer goods.. and whether such spending takes place in NZ's domestic economy.

Higher interest rates and commodity prices would increase inflation.. inflation which is arguably already here.

At some point it just isn’t worth working though. What is the point of selling a $2 pie if the profit only buys 1/1000000 of a do up in Otara? And if asset prices are inflating so much that after a year of working hard you are further away from buying one. Sooner or later something has to give doesn’t it?

You nailed it

You're more talking about the breaking of the social contract and loss of confidence in the NZD. Buying Bitcoin could be an option for you if you're worried about inflation and sh*t hitting the fan.

Also economies of scale; if a merchant is making $1 profit off each $2 pie, over a week it adds up - especially if sold alongside other products {corner dairy styles]. If nothing else a $2 pie makes for a great loss leader.

If you're feeling a little frustrated listen to the audio book The Richest Man in Babylon:
https://www.youtube.com/watch?v=wglndSWrvsM

"Understanding What is Happening in America" talk by Larry Taunton is illuminating:
https://www.youtube.com/watch?v=mmL3CalZ2-4

so you think people work and earn an income just to buy assets ? ( and not pies say ..)