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A review of things you need to know before you go home on Thursday; long TD rates rise, real estate markets cools, food prices stable, concrete poured rises, NZGB yeilds rise, swaps steepen, NZD falls, & more

A review of things you need to know before you go home on Thursday; long TD rates rise, real estate markets cools, food prices stable, concrete poured rises, NZGB yeilds rise, swaps steepen, NZD falls, & 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
Rabobank and NBS both raised term deposit rates, with both focusing on longer term rate offers.

A COOLER MARKET BUT COMPARISON BENCHMARKS DIFFICULT
The housing market probably cooled in April. The national median dwelling price declined by -1.8% in the month but price movements were mixed around the country. Volumes sold were down by -26% from March, and of course the comparison with April 2020 is pointless. Compared to April 2019, they were up +19%. But at 7218 sales recorded, they were a long way lower than the 8509 in April 2016. For Auckland, April sales volumes are -35% lower than in March but +50% higher than in April 2019.

FOOD PRICES STABLE
Stats NZ reported today that food prices rose just +0.7% in the year to April. There were higher prices for tomatoes and cucumbers, lower prices for coffee and potatoes. Prices for instant and ground coffee decreased -8.7% and potato prices decreased -9.2% over the year. Overall fruit and vegetable costs were up +6.0% while meat was down -2.2%, grocery food down -1.3%. Prepared meal prices (take-out, restaurant, etc.) were up +4.0%.

POURING MORE
Stats NZ also reported Q1-2021 ready-mix concrete production data today. It compares with a pre-COVID period and was up a strong +11.6% year-on-year as activity in the regions powered up. Auckland was up +9.2%, Welling up +2.6% and Christchurch up +10.5% all on the same basis. We can do with the additional infrastructure and housing, but concrete also means higher GHG emissions.

AUCKLAND AVOIDS BIG RENT RISE
Residential rents were relatively unchanged in April from March, but they are +3.2% higher than in April a year ago. But in Auckland they are up just +1.3%. For Wellington the rise is a chunky 7.5% pa, for Canterbury its +7.7%.

YIELDS RISE
Today's NZ Government Bond tender offered $350 mln in four tranches, and more than $1.3 bln was bid. The yield on the new May 2026 issue was 1.06% pa. The yield on the May 2031 issue was 1.87%, up from 1.61% at the prior event. The April 2033 issue yielded 2.11% and up from 1.85%. There small linker was well supported too.

MORE ELECTION DONATION CHARGES
The Serious Fraud Office has filed criminal charges against six people in relation to a political donation made to Labour. They said “The Labour Party has complied with the law." The SFO noted than no-one charged is either a current MP, or a current or former Party official. Previously NZ First, the National Party, Auckland Council, and Christchurch City Council have also been embroiled in political donation issues.

UNIMPRESSED
SAAS darling Xero announced record customer growth but it didn't impress shareholders who marked their share price down -8% today, (but it is against a risk-off backdrop to be fair).

IMPRESSED
In Australia, their huge GrainCorp enterprise has delivered a great result after growing conditions continued to be very favourable in the past year, and look to be again in the coming year. Australian agricultrure is going through an extended Goldilocks patch.

GOLD SOFTER
The gold price is down to US$1818 and another drop of -US$10 from this time yesterday. New York closed at US$1815; London closed at US$1831/oz

EQUITIES LOWER WORLDWIDE AGAIN
The S&P500 ended -2.1% lower on Wall Street earlier today as risk appetites vanished as the reflation trade resurfaced. Tokyo is extending its decline with another -1.8% drop in early trade. In Hong Kong and Shanghai, they have both opened -0.7% lower. Meanwhile in Australia, they have shed another -0.4% in their morning session. The NZX50 Capital Index is down -0.8% to extend the sell-off trend.

SWAPS & BONDS RISE AT LONG END
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 steeper. The 90 day bank bill rate is unchanged at 0.37% and that is now its highest in more than a year. The Australian Govt ten year benchmark rate is up +1 bp at 1.74%. The China Govt ten year bond is back up +2 bps at 3.16% after yesterday's rare dip. And the New Zealand Govt ten year is up +4 bps at 1.89% and just below the 1.90% in the earlier RBNZ fix (+9 bps). The US Govt ten year is up +5 bps at 1.68%.

NZ DOLLAR SOFTER
The Kiwi dollar has stayed down from its overnight risk-off drop and is now at 71.7 USc. Against the Aussie we are still at 92.8 AUc. Against the euro we are lower at 59.4 euro cents. That means the TWI-5 is now down at 73.5.

BITCOIN EXTREMELY VOLATILE
The bitcoin price is now at US$50,102 and down a painful -11.5% from this time yesterday. Volatility has been extreme at +/- 12.7% !!

This soil moisture chart is animated here.

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End of day UTC
Source: CoinDesk

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29 Comments

10
up

Tesla ditching bitcoin on environmental grounds

https://www.stuff.co.nz/business/money/125118026/bitcoin-price-falls-aft...

Curious to see what the bitcoin evangelists have to say about this. Usually, when the topic comes up, they tie themselves in knots with the most absurd logical contortions and obfuscations in order to attempt to deny the obvious. Now even Elon, patron saint of crypto, is acknowledging it. 

Elon has many faults, but it's absurd to suggest that he's either out of his depth in understanding the technology, or that he's succumbing to woke pressure -- in fact he's perhaps most famous for being the polar opposite on both fronts.

Maybe, just maybe, whisper it now: it's true.

Should he stand down from SpaceX also as the Falcon 9 uses USD $900,000 of fuel per mission to launch! Oh....2 days ago he was accepting Dogecoin as payment so go figure....the term influencer springs to mind!

The next generation of Space-X rockets will run on methane produced via renewable energy.

Wake me up if btc crashes more than 40%. Otherwise it's business as usual for a bull run. Elon is insignificant compared to bitcoin. It'll hit a new ATH within the next month. https://www.reddit.com/r/CryptoCurrency/comments/ltbna8/the_2017_bullrun...

I made my last btc purchase at USD 58k and have 0 regrets. This dip is going to shake out many of the stronger weak handed plebs. Wouldn't be surprised to see btc at 100k within the next month based on S2F.

Elon - Shady as
But Dave Portnoy, founder of Barstool Sports and on-again/off-again Bitcoin investor, suggested the environment was just an excuse. In Portnoy's estimation, the CEO is manipulating the market after Tesla sold off some of its BTC holdings last month.

Mainstream economist do the same thing when trying to deny how our monetary system operates. Simple logic is not their strong point either.

https://twitter.com/elonmusk/status/1392602041025843203?s=20
Do you really think he doesnt know how mining works? He has known all along, but do you think that he might have been tapped on the shoulder by someone (perhaps the people he gets carbon credit payments from?) and told to say that. He has copied and pasted an image rather than typing it out.

Anyhow, this myth has been debunked countless times and we knew it would be used at some point in this cycle to try and drop it. Bull market is far from over. Thank Elon for the opportunity to BTD.

https://twitter.com/100trillionUSD/status/1392612099692679175?s=20

https://twitter.com/michael_saylor/status/1392621211302105091?s=20 Also, not accepting it for transactions but still holding it is the stupidest thing I have heard...

I can imagine trying to tell this story to my grandchildren in 40 years time: "yes well we completely stuffed the planet trying to mine some meaningless artificial money, some of the money was started as a joke yet we still thought it would make us rich. sorry about that"

"yes well we completely stuffed the planet trying to mine some meaningless artificial money, some of the money was started as a joke yet we still thought it would make us rich. sorry about that"

........"we should have just stuck to the housing bubble like the govt, the central and retail bankers, & Granny Herald wanted us to do."

Read up on how btc miners are mitigating gas flaring to run mining rigs Jimbo. Probably more energy has been wasted on centralised servers hosting btc energy myth debunking articles, than the entire history of btc mining. Smart people do research and answer their own questions based on the balance of probabilities. Most kiwis only buy property.

Hahahaha, Greta's gonna kill Bitcoin.

Now Liam and Porcha (your grand kids), I know house prices are high but have you thought of moving out yet?

I was going to buy a house today grandad but doge just fell 45% overnight.

Realterms: "Tesla ditching bitcoin on environmental grounds"

Elon Musk: "Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy"

Ditching your comment on comprehension grounds.

And what the hell does he think recharges his bloody cars - PR stunt

NZ Gov bond yields up, housing market showing signs of cooling.

These are the cues for Orr to repeat his usual statement in public: if wholesale funding costs rise, the central bank will intervene (print more)!

There is certainly a few baby seals out there today. from iron ore to crypto. A2 now down 73 percent from its August highs.

They are pulling out their money to go all in on Dogecoin. People know a great investment when they see one. If Kiwi's know anything, it's how to profit from a commodity boom and rising inflation......Dogecoin and property.

clemente, you need to raise the level.

Millions of what??????????

There is certainly a few baby seals out there today. from iron ore....

You must be looking at a different iron ore than the one I can see.

1.2% or 1.3% p.a for a 3-year term deposit, when it is highly likely that interest rates are going to be significantly higher within the next 12 months ? No thanks. Nothing below 2.5% pa would make any financial sense on any term longer than 2 years.

Exactly. Dont forget a 2.5% term deposit is a losing investment after tax and inflation.

1.8% fall = 'market is cooling'.
lol at the way this is being reported. Next month if prices are up 1.72% maybe it will be reported as 'market is heating up'

In a wild “what on earth” moment earlier this afternoon I watched BTC go from around $47,000 to $45,000 in about 5 secs.

I guess there were some sloppy “sells” lying around just gobbled up in the tumult.

Make of it what you will.

RE NZ government bond Tender - There small linker was well supported too.
The weighted average accepted yield was 0.87% for this 20-09-40 maturity
The 20 year benchmark NZ government nominal bond settled at 2.759%
Hence the approximate 20 year breakeven inflation rate is ~1.889%

An email from RE Agent today, so challenging Labour government as they also know, come what may neither Labour nor RBNZ can now even think of stopping the ponzi on the contrary if it slows will have to go all out to support.

This confidence in RE industry is not without valid reason.

Hi,

Auckland's market continues to march on regardless of what Labour throws at it, hence why we say the market is the market!

Great articles below, on CVs we all have one and buyers just love to quote CV when out looking and also families vs developers... enjoy a quick read below. 

I have a number of buyers who have missed out recently that are wanting to be in the area, so if you have been thinking about selling, please contact me today or pop in to say hello at any of my open homes.
.

Kind Regards,

Listings are about a 1/3 down on TM from last year so some agents are desperate for listings. If prices hadn't gone up so much and people weren't holding onto their houses, agents would have more work and houses to sell