sign uplog in
Want to go ad-free? Find out how, here.

A review of things you need to know before you go home on Thursday; plenty of mortgage rate changes, retail spending strong, fewer dairy farms for sale, carbon price rises, swaps soft, NZD holds, & more

A review of things you need to know before you go home on Thursday; plenty of mortgage rate changes, retail spending strong, fewer dairy farms for sale, carbon price rises, swaps soft, NZD holds, & more

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

MORTGAGE RATE CHANGES
ANZ has cut some short term fixed rates, raised some long term ones. The Co-operative Bank made a similar move. More here. And then BNZ followed as well. More here. And TSB has matched these moves too.

TERM DEPOSIT RATE CHANGES
The Co-operative Bank raised some TD rates. See the new rates here.

ITS A PLASTIC WORLD NOW
By any measure, retail spending as recorded by our electronic card use was very strong in May. The growth from April was up +2.3%. Obviously the year-on-year rise was spectacular (but that doesn't really tell us anything). But the May 2021 retail spending is +11.1% higher than April 2019 at a time when prices rose just +4.1% over those two years. And actually the real retail spending is better than that when you realise that spending on fuel over the same period fell -9.4%. There is still plenty of 'revenge' or make-up spending going on locally, a long time after the pandemic lock downs have passed. Also, since the first lockdown, we have spent more per transaction on these cards, now about $60 per transaction. Before March 2020 the average was about $50/trn.

MORE WORK VISAS
The Government has extended work visas for 10,000 people already in the New Zealand and will allow 200 more dairy workers and 50 vets into the country.

ANZ CFO STEPS INTO FUNDS MANAGEMENT ROLE
ANZ NZ says its chief financial officer, Stewart Taylor, will fill the newly established role of Managing Director of Funds Management from the end of June in an acting capacity until a permanent appointment is made. The role was created following the recent departure of Craig Mulholland, ANZ's Managing Director of Wealth and Private Bank. Amanda Owen, ANZ’s Head of Finance, will be acting CFO while Taylor takes on the funds management role. ANZ also says Keren Roberts, as General Manager of Strategic Execution, will begin reporting directly to CEO Antonia Watson, subject to non-objection from the Reserve Bank.

NEW STOCK EXCHANGE FOR SMES
Catalist, a new stock exchange for small and medium-sized businesses (SMEs), will launch on June 21. It's targeting SME listings with an initial value of between $6 million and $60 million. Catalist uses regular auctions, rather than continuous trading, which it says allows for fairer pricing and increased liquidity for financial products that don’t trade very often. There will be "alternative disclosure provisions" where businesses only disclose information for each auction, rather than continuously. Catalist has received a licence from the Government and been welcomed by Commerce and Consumer Affairs Minister David Clark, and Small Business Minister Stuart Nash.

MORE, OLDER, MORE DEPENDENT
New Zealand's labour force is projected to increase, albeit more slowly now, driven by a growing population and small increases of participation rates of women at most ages and men at older ages. But slower population growth and our ageing population will slow labour force growth in the long term. In the March 2021 quarter, 2.9 million people were in the labour force. New projections indicate a total labour force of around 3.2 million in the early 2030s and 3.7 million in 50 years under Stats NZ's median projections. By 2073 these same projections don't see females making significant increases in labour force participation, so the dependency ratio will grow to 84% from the present 75%. (The dependency ratio is a measure of the number of dependents aged zero to 14 and over the age of 65, compared with the total population aged 15 to 64.) The male participation rate is to become 68% while the female participation rates will only get to the unequal 58% - about as unequal as it is today. Men's work will be the main source on which welfare redistribution will need to be based over the next 50 years.

DAIRY FARMS FOR SALE HARDER TO FIND
The number of dairy farms listed on the local real estate listing portals is low at present, and down a third compared to this time a year ago. Compared to this time in 2019 they are down almost by half. It is dairy farms in Northland, Waikato and in Southland where the listings are especially low in 2021.

HIGHER MILK PRICE
Update
: Rabobank has raised its 2021/2022 farm gate payout forecast to $8.00/kgMS, nasically bringing itself into line with the other bank analysts. You can compare all forecasts for the current and next season here.

CARBON PRICE RISING
The carbon price (per NZU) has pushed on up quickly in the past few days and is now above $40/unit for the first time.

ONE WEAK LEG
Last week the retirement home sector made a small +0.5% gain in capitalisaion in the NZX50 and it now consolidates up to $10.1 bln among four listed entities. But it is a sector now underperforming the market even though over the eight months from September 2020 it is up +6.6%. Last week two of them had gains of over +4%, being Summerset (SUM #13) and Oceania (OCA #32). It was the others who are underperforming in investors' eyes, especially Ryman (RYM #9).

EYES ON US CPI
All eyes are now on tomorrow morning's US CPI rate which is now expected to come in at a hot 4.7%. In April it was 4.2%. Any material variation from that expectation will probably have market-moving consequences.

GOLD SLIPS
Compared to this time yesterday, the gold price is down -US$6 and now at US$1886/oz in early Asian trading. It closed in New York at this same US$1888/oz and in London at US$1895/oz.

EQUITY MARKETS TURN POSITIVE
Wall Street ended its session virtually unchanged from the prior day, up less than +0.1%. The Tokyo market has started out up +0.4%, and Hong Kong has opened up +0.3% so far. Shanghai is up +0.2% in early trade. The ASX200 is up +0.5% in early afternoon trade, but the NZX50 Capital Index is heading for a flat result late in its session.

SWAP & BONDS YIELDS SOFT AGAIN
We don't have today's closing swap rates yet. If there are significant changes again today, we will update this item. They probably fell. The 90 day bank bill rate is unchanged at 0.32%. The Australian Govt ten year benchmark rate is down another sharp -8 bps at 1.45%. The China Govt ten year bond is little-changed at 3.13%. The New Zealand Govt ten year is down -5 bps at 1.73% and above the earlier RBNZ fix of 1.71% (-6 bps). And the US Govt ten year has fallen back -4 bps to 1.49%.

NZ DOLLAR HOLDS
The Kiwi dollar is holding at 71.8 USc and where it was this morning. Against the Aussie we are little-changed at 92.8 AUc. Against the euro we are soft at 59 euro cents. That means the TWI-5 is now at 73.4 and very little-changed from where we opened this morning.

BITCOIN BOUNCES BUT VOLATILE
The bitcoin price is now at US$36,831 and up +13% from this time yesterday, most of which happened last night. Volatility in the past 24 hours has been extreme at +/- 8.0%.

This soil moisture chart is animated here.

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

Daily exchange rates

Select chart tabs »

The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
End of day UTC
Source: CoinDesk

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

44 Comments

https://thespinoff.co.nz/politics/10-06-2021/mike-joy-why-i-was-disappoi...

Best stab so far.

But the B-deck casino is open for business. Signed: White Star Line

He draws attention to the critical factors....sadly we appear determined to "win slowly"

Good article - the NZ plan is truly pathetic.

An alternative view, https://www.kiwiblog.co.nz/

I'd forgotten there are still remnant dinosaurs.

Looks like the Dinosaurs are the only thing providing the country with an income and associated niceties at the moment, maybe a more middle road is were you are at.
https://www.interest.co.nz/rural-news/110788/guy-trafford-reviews-what-c...

No, it's not an 'income'.

It's a 'right to access a once-off draw-down'.

Food-production without degradation/draw-down is where I am at - but that is hell-and-gone from BigAg as practiced.

The right to access, is being limited through regional councils now, what have we got that can seriously replace, “Big Ag”, food, income, because it is actual money.
Big Ag will retreat to traditional areas, and so will our standard of living.

Have a wee think on this: BigAg, in purely energy terms, is the art of turning lots of fossilised sunlight into lots less food. The lazy accounting says 10 calories of fossil energy to one of delivered food; if you count everything in (the energy required to extract, process, manufacture and deliver your tractor's oil filter, for example) I can argue 70 calories of FF to one of food. We're eating our way through a finite resource.

Money, on the other hand, is a debt-issued token.

Some say NZ Ag is the most efficient in the world.
Can you recommend a better way to produce more with less?

NV - good question. (Profile, take your spin an go somewhere with it)

It is NZ Big Ag who say that. It's only true (like so many things) if you avoid what is inconvenient (as Profile just did, avoiding the finite nature of FF). NZ Big Ag can be traced not only to fossil fuels (draw-down of a finite resource) but to rainforest depletion (pke) and phosphate drawdown (and likely, theft). It can also be sheeted home to topsoil loss, aquifer depletion, erosion, loss of flood-capacitance (biodiversity used to slow rain run-off) and the biodiversity displacement that is manifest in monoculture-to-the-horizon. Luckily we don't have the evaporation-rates here (though they may be coming) which turned the Sumerian's Big Ag into the saline wasteland which is Southern Iraq.

Nutrient re-circulation is one key element ( see: https://www.bookdepository.com/Creating-Sustainable-Cities-Herbert-Girar... ), the other is EROEI; energy in vs energy out. Listen to Mike Joy ( https://www.rnz.co.nz/national/programmes/afternoons/audio/2018799160/di... ) talking about that; it's the equation of all equations. What we have been doing is linear; extract, consume, discard. We did that with our food systems too, at least, to the system they depend on. Have you ever contemplated the need to recycle phosphate? https://feeco.com/opportunities-in-recycling-phosphorus/ Have they ever contemplated the energy required to do so? Probably not; that's a different (academic) silo.......

Dr Joy also mentioned more people on the land; more people per food-producing acre, beyond FF. I've long suggested this would be the case; long suggested there will be a reversal of the ff-energised rural-to-city tide, a renewal of villages/towns at nodes (river confluences etc). Has to be. Most city 'work' isn't really work (in the physics sense) and most is discretionary. Food isn't. Biodiversity, rotation, permaculture, bee-corridors (and more), water retention (swales, riparian, tussocks etc), use of shade and windbreaks, use of glass to extend shoulder seasons (I do this to the max, insulating the soil as well), nutrient replenishment.......

There is a lot more tucker out there than 20 years ago and its not due to BigAg (TM), or the latest doomster Rome Club cop out - debt.
"We show a persistent and widespread increase of growing season integrated LAI (greening) over 25% to 50% of the global vegetated area, whereas less than 4% of the globe shows decreasing LAI (browning)."

Greening of the Earth and its drivers
https://www.nature.com/articles/nclimate3004

I miss AndrewJ - he would have a lot of informed things to say about this

Tongan MP Lord Fusitu'a reportedly in talks with Jack Maller (lightning network guy who helped El Salvador with their approach to BTC) about buying BTC to use as a reserve asset for Tonga. If remittances make up 37% of their GDP, then this is huge because expat Tongans in NZ can send BTC home for comparative peanuts and swap it out to fiat using the Tongan CB. Can anyone who knows about Tonga and their parliamentary system comment on this development? Alternately he resides in Auckland, so maybe someone knows him. https://twitter.com/DocumentingBTC/status/1402655617462980613

The benefits to 3rd world countries is massive. El Salvador has just opened the flood gates.

while Salvadorans will be free to use any compatible wallet to interact with the new bitcoin-based monetary system, they will have the option of using an official, government-sanctioned smartphone wallet engineered by Jack Mallers’ Strike.

Strike helped pioneer the use of bitcoin in El Salvador; its Lightning Network-based backend enables fast transactions with minimal fees: essential features for everyday payments in a low-income country. (In the U.S., professional football player Russell Okung used Strike to convert his paychecks from the Carolina Panthers into bitcoin.)
https://www.forbes.com/sites/theapothecary/2021/06/09/el-salvador-enacts...

Bit of an eye-opener

Population of Tonga 2019 = 110,100
NZ Tongan Population 2018 = 82,300

And we are payng for their pfizer vaccines

Your point is?

Using Strike and Lightning could save up to 50mil in remittance fees per year, injected directly into the Tongan economy. About $500 per person/per year.

Strike is mind blowing. People need to understand that the services offered by traditional banks are in the stone age. I try to steer clear of the conspiracy theories but the coordinated attack on Bitcoin in particular seems almost orchestrated. We're looking at technologies that are devastating for banks.

Don't confuse fintech with crypto.

Don't confuse fintech with crypto.

??? Strike is one of the most revolutionary fintech developments out there and is built on the Lightning network. I'm not confused in the slightest. Your comment doesn't make any sense.

“All eyes are now on tomorrow morning's US CPI rate”

Unfortunately it's hard to get too excited about the release – if it’s a blowout number on the upside expect to see the word “transient” endlessly thrown out by the Fed.

At best there might be an unconvincing suggestion of tapering being pulled forward on their agenda.

The punch bowl stays firmly on the table and remains full to the rim – the party, while clearly long in the tooth, rages on.

Fun fact. Re Its Plastic.

Behavioral economists claim folk feel its 15% cheaper when paying with pay wave compared to cash.

As a Behavioural Economist that is news to me

Thinking aloud, you almost had me.

Can someone please explain

1. What happened to the MereMere power station
2. Why are we importing coal when there is coal at Rotowaro and Glen Afton and Pukemiro
3. 15 Kms from Huntly
4. How long have we been importing Coal
5 how much has that cost us
Surely the cost of importing coal into NZ would have justified the cost of upgrading Mercer-MereMere

a high exchange rate creates all sorts of distortions...

same reason we import our skirting boards from chile

I think the answer about coal is that the nearby coal is the wrong type. Or rather, it's much better quality than is needed for Huntly. That's not to say that I like the situation, I think it stinks.

Meremere was a very old coal fired station which was at the end of its life. It would have needed to be totally replaced if it had been kept running. There were plans to construct a new big station across the river from there where the big power lines were but that came to nothing. The proposal to turn Meremere into a waste burner likewise. probably because it couldn't be just converted. It would have been needed to be replaced. Anyway the transmission lines passing by don't go in to that substation any more.
The overhead coal buckets were removed. Its all start from scratch there now. Any consents foregone long ago.
As far as NZ coal goes, I am not sure. Probably just economics and govt reluctance.

ps. Anyone else get the feeling that the govt are gearing up to green light onslow?

Those who profess to be environmentalists, but who also want to live first-world-consumption lifestyles, p--- me off.

We COULD do without Onslow, but we'd be struggling even more than we will be, ex FF. Most folk have no idea - at all - about energy. May well be our downfall.

This is also why Bitcoin is so important and won't be replaced anytime soon by PoS. An energy pegged store of value makes the conversation top dead center.

wake up! cryptos have no long term future

This reminds me of "Assad must go"

WAKE UP SHEEPLE!!!

:D

Recently had a conversation re this with a mate who has a trucking contract to get Indonesian coal from Auckland port to Huntly. Simple answer is Indo Coal is 1/3 of the cost of NZ coal (including shipping costs). Not sure why that is but wonder if it’s to do with high labour & compliance costs in NZ.

No. It's to do with low labour costs in Indonesia, coupled with no environmental regulation, no safety legislation and a touch of corruption.

Never ceases to amaze me how much assumption is embedded........

You certain about that? Abusing workers and the environment? We would only import ethical coal to help power our big screen TVs and keep all our spa pools hot.

But the May 2021 retail spending is +11.1% higher than April 2019 at a time when prices rose just +4.1% over those two years.
Is the retail spending number increase annually compound percentage adjusted like the RBNZ inflation calculation?

And in other news, covid has taken off again in China, proving that authoritarian governments do not have miracle powers....

might pay to see how long it takes them to get it under control before writing them off.

hardly "taking off" with 20 cases a day

To be fair they have administered a lot of vaccines and managed to keep a pretty clean slate over this last year.

In all you would have to say they have done a better job that 90% of the western world.

Of course they are still responsible for unleashing this "China flu" on the world, intentionally or not

I wouldn't believe anything coming out of the state controlled media of that authoritarian, anti-fascist state.