What happened Tuesday

A review of things you need to know before you go home on Tuesday: more rate changes, consumer confidence weakens, eyes on dairy, comment update, swaps and NZD stable, & more

19th Mar 19, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
ASB has launched a 3.99% rate fixed for two years. TSB is matching that with their price-match offer. And so is Sovereign.

TERM DEPOSIT RATE CHANGES
Co-op Bank has reduced their bonus saver by -5 bps. Christian Savings also cut rates.

LOSING ALTITUDE
The Westpac MM version of New Zealand consumer confidence has retraced in March from its December rise and down near its lowest levels since 2012. But this level isn't showing up yet in the ANZ Roy Morgan survey which won't be updated until the end of the month. Confidence was down across all income brackets, age groups and regions. Households have highlighted increased concern about their personal financial situation. They are also concerned about the trajectory of the economy over the next few years. Despite the increased concern about the economic outlook however, spending appetites only
softened a little.

WESTPAC GROUP WEALTH SHAKE-UP
The Westpac Group has unveiled a wealth and insurance shake-up, plus some senior executive changes. Among other things Westpac says it's "exiting" the provision of personal financial advice by Westpac salaried financial advisers and authorised representatives. It's wealth and insurance businesses will be moved into expanded business and consumer divisions. George Frazis, ex-CEO of Westpac NZ, is leaving the group to "pursue other leadership opportunities."

ALL EYES ON DAIRY
Tomorrow, it will be all about dairy. First, we have another auction. The indications from the futures market is that prices for WMP may be up more than +3%, for SMP probably unchanged. This will be followed by Fonterra announcing its half year result. Given the recent downgrade of dividend expectations, it is unlikely to be a very positive result. And that will be followed by New Zealand's Q4-2018 Current Account report. Markets are expecting a -NZ$3.6 bln deficit, far lower than the Q3-2018 -NZ$6.1 bln deficit. But the annual current account deficit is expected to rise to -3.9% of GDP, up from -3.6% of GDP in the year to September 2018. Dairy exports will have a big influence here too.

AUSSIE HOUSING LOSSES
Residential property prices fell -2.4% in the December quarter of 2018 taking the full 2018 change to -5.1% on average. But the falls are sharper in the big eastern cities. They fell in Sydney by -7.8, Melbourne by -6.4%, Perth by -2.5% and Brisbane by just -0.3%. These falls are actually faster than in the GFC. It is a correction they had to have, and may just be a normal market reset. The total value of Australia's 10.3 million residential dwellings fell by -AU$133 bln to AU$6.7 tln (and that is worth -7% of 2018 GDP). The average (mean) price of dwellings in Australia is now NZ$675,000.

HAPPY TO SIT PAT
Today's release of the RBA minutes still show divergent conditions in Australia. The RBA sees housing markets under pressure, but they also see export markets performing very well, labour markets with upward pressures, and consumer sentiment and spending helping to drive their economic growth up. The Aussie story isn't all about housing, which is why the signals from the RBA confuse some. They don't seem ready to change any of their settings either way.

COMMENT UPDATE
Regular readers should know that our comment management is sadly picking up a handful of offensive posts. Some regular readers have been banned. After Friday, the line has moved. The level expected from readers for responsible commenting has been raised - although the deleted comments would all have been removed even if they had occurred before Friday. Respectful commenting is expected. That isn't saying criticism isn't allowed. If you read today's comments you will see plenty of criticism from all points of view. But just because we 'approve' a comment to appear on the site does not imply we agree with the sentiment. The current type of intensive reviewing is not sustainable, so at some point we will need to modify how comments work on interest.co.nz.

LOCAL SWAP RATES DIP
NZ swap rates for almost durations have dipped by -1 bp today, except for the one year rate which is up +1 bp. The UST 10yr rate is unchanged at 2.60% and holding. Their 2-10 curve is up at +17 bps while their 1-5 curve is still negative at -10 bps. The Aussie Govt 10yr is at 1.95% and that is down -3 bps, the China Govt 10yr is up +3 bps at 3.18%, while the New Zealand Govt 10yr is little-changed at 2.08%. The 90 day bank bill rates is unchanged at 1.88%.

NZ DOLLAR UNCHANGED
The NZ dollar is little changed since this morning at 68.5 USc. It is at 96.4 AUc and 60.4 euro cents. That leaves the TWI-5 at 73.

BITCOIN UP
Bitcoin is at US$3,977 and also little-changed since this time this morning.

This chart is animated here. For previous users, the animation process has been updated and works better now.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

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21 Comments

by Wrong John | 19th Mar 19, 4:37pm 1552966676

Websites are today's publishers (weblisher's) & responsible for all their content. One of the great things about the digital press is the ability to add your own views below of the story above. Of course it had to come to this. I'm just as bad as the nest person in that regard but keeping it clean must be a nightmare back at the office. You guys do a great job. Small, highly focused websites are the future. It won't get rid of the extreme stuff, they'll just migrate to another website & keep going, but you're drawing your line in the sand & fair enough.
I've known for a long time now that we're just as bad as the rest of the world so I wasn't surprised by Friday's events. As I've written before the N in NZ is for Naive as most Kiwis wouldn't have a clue about how tough & bad the real world is out there. It's no different here & last Friday proved it. I just hope that out of this shambles that we (that's ideally humanity in total) can create something good out of it - and I'm not just talking about regulating big tech here, I'm really hoping that something good happens in Christchurch for a start, & then I'm hoping for some wider reconciliation across all platforms & all countries. Trouble is when it gets this far it can be hard to stop.

by skudiv | 19th Mar 19, 4:54pm 1552967656

I will be sad to see the level expected for responsible commenting, raised. I have enjoyed the freedom given on this site. It is tragic, that one man has caused so much suffering.

by RickStrauss | 19th Mar 19, 5:13pm 1552968795

I personally think that (prior to this current lockdown which all would likely expect to be temporary) Interest.co.nz has done an excellent job of drawing the line. Further, the community has generally policed itself pretty well with standards of civility and politeness. Cut and thrust has been present and robust, but not usually offensive or targeted strongly at the person rather than the argument or behaviour. Mods have deleted or banned where things have crossed the line.

Hopefully, this overall level can be maintained. This site has never been a cesspool because commenters have generally kept their standards pretty high and unwarranted plays of the person not the ball have been called out by other commenters.

by Nzdan | 19th Mar 19, 5:51pm 1552971077

I agree, I enjoy coming on here to read the articles then join in on the comments section to see other people’s views, share my own and throw in a little friendly banter at a few people from time to time. It was a shame to see someone throw their toys out of the cot on Friday and start flaming profanities at another member.

by Grant A | 19th Mar 19, 10:54pm 1552989284

NZDan - that was that banter then blaming Christchurch for the tragedy because it has, or used to have, a few racist skinheads. Some won't forget those that provide misinformed inappropriate comment in such situations

by Nzdan | 20th Mar 19, 6:20am 1553016038

Fair call, my comments were highly inappropriate at the time and I did overstep the mark.

by Kate | 19th Mar 19, 5:52pm 1552971123

Yes, many, many thumbs up to interest.co.nz for this.

I fully understand the cost associated with the moderation function. In thinking about it, and in particular in relation to the need for NZ to have public platforms for respectful discussion on these difficult issues confronting us, we as a community who appreciate the skillful/considerate moderation of the site, do need to check into Press Patron with our support.

by Foxglove. | 19th Mar 19, 7:52pm 1552978356

Yes Rick and we have all shared in the main some pretty good and productive dialogue. And with in that, that good spirit is enjoyed by the majority of contributors. Besides “Ed” always is alert and has the censor pen poised, which have to admit have fallen foul of myself, but lesson learnt, not recently.

by JimboJones | 19th Mar 19, 8:34pm 1552980890

Agree that interest have done a good job, disagree that most commenters have. There are racist posts all the time - often pretending to be anti immigration but definitely targeted at certain races. Some of the comments after the attack were atrocious - but not at all surprising.

by leila | 19th Mar 19, 8:52pm 1552981958

Imho censorship may push the radicalism underground to further fester instead of exposing it to the light to be broken apart and hopefully reasoned with.

by Lapun | 19th Mar 19, 10:50pm 1552989040

I agree some posts seem racist and many probably are written with a racist tone. What is significant is intention - is it intended to hurt, is it likely to cause violence, was it just a mistake.
Taking a pot shot at the pale, stale, male is technically racist but given what some refer to as white privilege it is a shot that doesn't do much harm. Telling an ex-POM like myself to go back to where I came from is merely rude banter whereas saying the same to a Indian or Chinese family who have been here for maybe a 100 years is hurtful and inaccurate and very unpleasant. The best solution is not to arrest people for using the 'n****' word (it has been used against my son at least twice) but to make it public and see how normal Kiwis react (very positively in my son's case)..

I have often posted my opinion that NZ has an exceptionally high rate of immigration and it is probably too high. I just prefer a small population but that makes me anti-immigrant and since most immigrants are visible immigrants (as is most of my family) it may risk readers assuming I am against certain races. I can honestly say I am equally against excessive low wage immigration from all countries including my own but it is hard to convince everyone. That is where it is useful to have Interest.co.nz to filter out both the racist and the well intentioned but ambiguous comments.

by PocketAces | 20th Mar 19, 8:05am 1553022310

Be sure to differentiate between people and their state (especially China), race and religion (anyone). Religion divides us more than colour, which as an atheist I find more and more odd as I age, and are wary of, especially those that seek to subjugate women and in that I include far right, white supremacists who seek to do the same, get 'em breeding or we'll be overrun.
People are not generally anti immigration, it is using mass immigration to give the illusion of growth that is a real, real problem, one without an end. There are plenty of us in the world who know that eternal growth on a finite planet is not possible.

by Foxglove. | 20th Mar 19, 8:14am 1553022876

Good points. As an atheist, it is clear you have been able to go forward in life, successfully enough, without any invisible means of support.

by PocketAces | 20th Mar 19, 8:39am 1553024393

Not quite, I have family and friends

by Lapun | 19th Mar 19, 10:22pm 1552987378

Agreed Interest.co.nz have done a good job. But it is largely the quality of the comments - plenty of you are wrong headed and chose to disagree with me but at least the majority of comments are factually accurate and the deductions made logically. At least one alternate site has the odd thought provoking point hidden among a thicket of inaccurate facts and illogical arguments - a site I've abandoned. This site publishes comments that have often changed my mind and that is wonderful.

by JB | 19th Mar 19, 6:44pm 1552974270

So much for the Peak Oilers of yesteryear !

A staggering surge of oil and gas:

Last year, the U.S. oil industry delivered record-smashing oil production growth. Crude output expanded by 1.6 million barrels per day (BPD), the largest increase in the country's history, pushing oil volumes up to an average of 10.9 million BPD and obliterating the record of 9.6 million BPD set in 1970.

Production is on track to continue growing at a fast pace and is expected to an average of 12.3 million BPD this year before topping 13 million BPD by 2020, according to the latest forecast from the U.S. Energy Information Administration. Meanwhile, gas production is also on track to expand at an accelerated pace over the next few years.

The bulk of this output is all flowing toward the Gulf Coast, which is the country's refining and petrochemicals hub. However, the U.S. is currently producing more oil and gas than its existing downstream infrastructure can handle, which is driving a big uptick in exports. That's also becoming problematic because those terminals are quickly filling to the brim.

by powerdownkiwi | 19th Mar 19, 9:13pm 1552983208

You should have tried to understand the concept first. Firstly, it was always about conventional oil - light sweet crude to you. And that plateaued in 2005-6, as predicted.

What we have now is 'unconventional' oil, and that was always going to be down the EROEI track in the direction of not capable of supporting BAU.

Some of us (I was one) expected oil to get more 'expensive', back around 2008. But then I learned something about economics and debt. And noted that for every $ of GDP growth, there was more than a $ of debt - in cases like the USA, several $$$$$. And realised that society can't afford itself any longer.

Which is entirely proven by the fact that fracking has yet to pay. And we are now seeing desperate touting to try and keep the ship afloat via more 'investment'.

Irrespective of it now being a case of 'unconventional' and irrespective of price/debt, Peak can be 'forced upward of the Hubbert-type line, by taking some of the remainder from the right-hand-side of the graph. That is entirely do-able, there is, after all, 50% left at Peak. The problem with that is the Seneca cliff or Seneca event you are setting up - the drop-off from such a forcing gets ever-steeper.

As you can see, there are those who don't share your enthusiasm:
https://www.resilience.org/stories/2019-03-18/peak-oil-review-18-march-…

by Cowpat | 19th Mar 19, 7:44pm 1552977889

One for tomorrow
https://www.stats.govt.nz/information-releases/regional-gross-domestic-…

by Paradoxx | 19th Mar 19, 11:52pm 1552992727

I suspect over time we will find the internet had a role to play in the tragic Christchurch event. With access to the entire world and different ways to broaden ones opinions it is often the opposite that happens - These individuals use the web as an echo chamber to find other like minded individuals and become more radicalized. Devastating and shameful. Kudos to Interest for stepping up and policing itself.

by Keepcalm-bushwalk | 20th Mar 19, 7:32am 1553020344

I notice that you don't include the £ sterling in the exchange rates. Any particular reason? Thanks.

by David Chaston | 20th Mar 19, 7:59am 1553021996

It is a minor currency in our trade relationship, mainly just a cultural link. We do include it in our charts however. UKP movements have little impact on the NZD; UK economy movements have virtually no echos here. As we report on things that affect New Zealand, these British elements faded long ago.