Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
No changes to report today.
TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here either.
A SHARP TURN LOWER
The steady improvement in consumer confidence over recent months took a blow this month. The ANZ-Roy Morgan consumer confidence survey fell 9 points in March to 86.4, with a fall across most questions, likely affected by recession headlines. Late-month responses were markedly weaker than those that preceded the GDP data. Inflation expectations were unchanged at 4.5%, while expected house price inflation fell from 4.1% to 3.4%.
AND THE EVIDENCE IS BROADENING
And that turn lower has been confirmed by a Westpac retail pulse report. They say spending growth has slowed to below the rate of inflation, despite rapid increases in the population. Households have become increasingly cautious about their spending plans in the face of high interest rates and ongoing cost of living pressures. Those factors have been a particular drag on spending on discretionary items like furnishings and dining out.
BUSINESS CONFIDENCE SLUMPS
Meanwhile business confidence is easing as well, according to the ANZ Business Outlook Survey. The ANZ economists say the recent published drop in GDP data 'seems to have given things a decent shunt south' in respect to business confidence.
CHANGE ON THE MPC
Following two retirements (of Peter Harris and Caroline Saunders), the Government has appointed economists Carl Hansen and Professor Prasanna Gai to the Reserve Bank Monetary Policy Committee. Carl Hansen, the executive director of Capital Strategic Advisors, will not undertake any work for financial sector clients while he is a member of the MPC. As Carl Hansen is also an advisor to Meridian Energy, he will not participate in any discussion relating to Meridian Energy’s fixed-interest funding arrangements. Professor Gai, the Professor of Macroeconomics at the University of Auckland and Head of the Departments of Economics, Accounting & Finance.
ANOTHER INQUIRY INTO BANKING?
The Parliamentary Primary Production Committee has initiated a briefing to investigate practices in rural bank lending. The committee is headed by ACT list MP Mark Cameron. He is hoping to shift this briefing forward to a full terms of reference for a full parliamentary enquiry.
BENEFITS TO INCREASE FOR ABOUT 1.4 MLN
From April 1, 2024 a wide range of public assistance benefits will rise. They include Jobseeker Support where a couple with children will get an extra +$56.48 a fortnight (and taking the per hour rate to $18.10 equiv for one person), while single parents will see their Sole Parent benefits increase by +$44.02 per fortnight. NZ Super and the Veteran's Pension will increase by +$71.08 per fortnight and the rate for a single superannuitant living alone increasing by +$46.20 per fortnight. Student allowances rise, with under-24s who are living away from home will get an extra +$27.94 a fortnight. And the payment rates for childcare assistance weekly maximum will rise +$14. There are a mix of rises, some the CPI (4.66%) and the Net Average Wage (5.28%).
MINIMUM WAGE RISING
The details of this increase are: Adult minimum wage will go up from $22.70 to $23.15 per hour (+2.0%). Starting-out and training minimum wage will go up from $18.16 to $18.52 per hour (also +2.0%), all from April 1, 2024.
ANOTHER VERY SUCCESSFUL BOND TENDER
Today's NZGB auction was well supported from 66 bids worth $1.275 bln chasing the $500 mln available. The April 2029 $275 mln tranche went to 13 successful bidders at 4.36% pa yield, which was lower than the 4.81% at the prior equivalent tender 17 weeks ago. The May 2034 $225 mln went to 8 successful bidders at a 4.57% pa yield, down from 4.76% eight weeks ago. $775 mln bid was unsuccessful and is still out there looking for a home.
TIMID LENDING/BORROWING APPETITES
Borrowing from banks and other non-bank institutions is rising at only modest levels still. Housing loan balances are only +3.0% higher than a year ago, personal loan balances are up only +3.7% (and the least in 12 months), business borrowing is anaemic, rising only +1.7% (see separate note on overdue balances, so banks won't be keen for more of that). And rural lending is up only +1.0% in February from a year ago. But "at least it didn't fall" some may say.
MAKING MONEY WORK HARDER
For the first time in three years we have has a second consecutive dip in household bank deposits. The retreats are not large, and they are for the seasonal January and February period. So it may not be a signal that household bank deposits are topping out - or it may be. It is certainly a possibility, and one consistent with the overall rise in cost-of-living stress. Meanwhile those same households are making their funds work harder, adding almost +$1 bln to their term deposit balances. The money is principally coming out of savings accounts, and to a lesser extend current accounts. A record $129 bln is now invested in TDs. More than 53% of household bank balances are in TDs, finally back to the level just at the start of the pandemic. A return on your money now takes priority over a return of your money.
DROUGHT EXTENDING
More funds ($80,000) are being offered to rural support trusts for advice on how farmers can handle drought conditions. A medium-scale adverse event classification already in place for parts of the South Island has now been extended to cover the Northland, Taranaki, Horizons and Greater Wellington regions including the Wairarapa.
O'OH
An NZX announcement from Synlait (SML) revealed it requested a trading halt today. "As previously announced by SML, SML (i) is required under its syndicated banking facilities to make a prepayment of at least $130 million on Thursday, 28 March 2024; (ii) is running a sale process in respect of Dairyworks; (iii) has announced that it will provide an update to the market on Tuesday, 2 April 2024 regarding its plans to deleverage its balance sheet; and (iv) is due to announce its half-year results for the six months ended 31 January 2024 on Tuesday, 2 April 2024." And " ... to provide it with additional time to finalise separate discussions with its banking syndicate regarding an extension to the $130 million prepayment obligation due on Thursday, 28 March 2024, and with its major shareholder, Bright Dairy, regarding the provision of financial support ..."
EYES ON THE YEN
The Japanese yen's brief slide on Tuesday to a new 34-year low near 152 per dollar (and reprising its November 2023 levels) triggered an emergency meeting of Japan's three main monetary authorities yesterday, suggesting direct intervention in the market to stop what they consider disorderly and speculative moves is imminent. If they have already moved in the background, it isn't obvious yet.
STUCK OVER 4%
Aussie inflation expectations, which had been suck at 4.5% since December, actually slipped in March to 4.3%. While this may be its lowest since October 2021, it does emphasise just how sticky Aussie CPI inflation has become.
SWAP RATES HOLD
Wholesale swap rates are likely to be little-changed again today. Our chart below records the final positions. The 90 day bank bill rate is unchanged at 5.64%. The Australian 10 year bond yield is down -2 bps at 4.00%. The China 10 year bond rate is unchanged at 2.31%. The NZ Government 10 year bond rate is down -5 bps from this time yesterday at 4.63% and the earlier RBNZ fix was at 4.59% and down -4 bps. The UST 10yr yield is down -1 bp at 4.22%. Their 2yr is now at 4.61%, so the curve is now inverted more, now by -39 bps.
EQUITIES UP LOCALLY
Wall Street ended its Wednesday session up +0.8% with a late jump earlier today. Sentiment seeing earlier Fed rate cuts drove the rally. Tokyo has opened down -1.1% today. Hong Kong is up +0.2% at its open and Shanghai has opened little-changed today. Singapore has also opened little-changed. Meanwhile, the ASX200 is up +0.8% in early Thursday afternoon trading and heading for a weekly +1.5% rise. The NZX50 is up +0.7% in late trade heading for a +1.0% weekly gain.
OIL PRICES FIRMISH
Oil prices have eased up +50 USc today to US$81.50/bbl while the international Brent price is now at US$85.50/bbl. Both have been in this narrow range for days now.
GOLD FIRMER AGAIN
In early Asian trade, gold is up +US$10 from this time yesterday, now at US$2188/oz.
NZD HOLDS SOFT
The Kiwi dollar is back has slipped marginally from this time yesterday at 59.9 USc. Against the Aussie we have stayed down at 91.8 AUc. Against the euro we are unchanged at 55.4 euro cents. This all means the TWI-5 has remained at just under 69.2.
BITCOIN SLIPS BACK
The bitcoin price has softened since this time yesterday, now at US$69,516 and down -1.6%. Volatility of the past 24 hours has been moderate at +/- 2.4%.
EASTER HOLIDAY SCHEDULE
Over the Easter holiday break, we will have normal weekend service, and will return with these daily briefings on Tuesday, April 2, 2024.
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99 Comments
Market capitalization isn’t “wealth.” It’s the latest price, times shares outstanding. Blotches of ink on paper. Flashing pixels on a screen. If a dentist in Poughkeepsie buys a single share of Apple at a price that’s 10 cents higher than the previous trade, $1.6 billion in market capitalization emerges from thin air. If a single share trades 10 cents lower, $1.6 billion evaporates just as quickly. Whatever happens, every security in existence has to be held by someone until it is retired. Ultimately, the wealth inherent in a security is the future stream of cash flows it will deliver to its holder(s) over time. Price fluctuations don’t change those underlying cash flows. They just provide opportunities for the transfer of savings between investors. High valuations favor the sellers. Low valuations favor the buyers. Investors have never paid higher prices for those future cash flows, or accepted prospective returns so low.
Put simply, the bubble hasn’t changed the wealth, and a collapse won’t change the wealth. What will change is the market cap. I suspect that the erasure of market cap in the coming years, and possibly the coming quarters, may be brutal. Still, no forecasts are required, and our own attention will remain on observable valuations, market internals, and other factors. Meanwhile, even if an investor sells at these extremes, the only thing that will change is who holds the bag. Link
For me, it’s got a little bit worse but that’s mainly because of a medical issue in my family. But it’s definitely going to get tighter for me when I refix my mortgage in June, outgoings will increase by nearly $150 pw. I have already tightened my spending quite a bit in advance of that
HM, sorry to hear about your medical issue. The question is quite clear though, "Did your finances get worse, or not, so far this year", so since 1st Jan to today. I didn't want guesstimates about the future, which may or may not happen. BTW you do not have to respond to this question, I just wrote this to help you thumb up the appropriate post.
But you can't necessarily divorce financial and medical issues. If you are working and you can't work due to a medical issue for a time that impacts your finances. Examples include cancer, autoimmune diseases, mental illness .... if you work for a living then staying well enough to work is an important part of having finances. Edit to say also, if your significant other or kid is sick that also impacts your finances. A child with cancer is devastating for families financially a lot of the time, because families have to get their child to Starship from wherever they live.
HouseMouse, that’s the fault of your over-inflated ego.
Back in 2021/2 ANZ were calling OCR to rise and with it mortgage rates; you called them “fools” and claimed that mortgage rates would be back to under 3% by 2023. You could have had that five year rate at 2.99%, wouldn’t have been hit when refining last year and angain this year and still having another eighteen months or so to run at 2.99%.
You certainly don’t have credibility, I’m happy to back this up. . :)
He’s full of class that one
and a liar
and it’s the final straw for me, and I mean it this time. This website needs to seriously look at itself, how it treats its customers (people who pay, or in my case, paid contributions), how it talks about those customers, how it moderates (or doesn’t)
I will watch from the sidelines, as I will still like to hear from the people who add the real value to this website - JFoe, IT guy, JC and a couple of others
Then we may as well move to $tuffed...oh, wait, they already banned me after 20 years for something I said that didn't agree with their editorial policies.
Seriously, I know that people have different perspectives and some have predetermined & repetitive agendas. This isn't the issue because they are easily seen through. Personal opinions are not personal abuses & such unacceptable attacks are generally called out quickly by several commentators which tends to group moderation. The real danger with commentators calling for mum is that groupthink bias is embedded.
You can mute/block people here if you want:
https://chromewebstore.google.com/detail/interestconz-commenter-bl/kbfa…
HouseMouse
Despite their experience, qualifications and considerable access to data, you outright ridicule every team of bank economists, economists, the RBNZ MPC and media commentators.
Economic forecasting is not an exact science relying on a number of assumptions and rapidly changes in the environment and data. There will be differing opinions amongst those you blanket ridicule, and it is their opinions which should be debated with consideration, not outright dismissed. Unfortunately, that has become the norm on this site and you are the cheerleader.
You hold yourself up as the superior oracle making your predictions with the expectation that those won’t be challenged and that you won’t be held to account. Your inflated ego is very apparent.
You really need to wear your big boy pants, as you are too easily triggered when you are challenged. This is not Putin Russia, so no, those with dissenting comments are not going to be banished to the outer Gulags and you can expect me to continue to challenge you.
As for you not longer commenting, well we have heard that at least three times before.
Happy Easter.
Yvil. You and I seldom agree, and I don't put my head above the parapet much these days... but the tone of this site is being dominated by some very bitter people. Lets remind them that our New Zealand (the ones my parent's helped nurture) isn't their New Zealand.
What an absolute piece of sht
What an absolutely rude person you are. Also a big prima-donner, as yvil did acknowledge the medical side. HM should not be on here if not well, and finally he is often extremely rude to a lot of people
Are you uptight about the gigantic capital losses.
Sht happens
But you abuse me Albert.
by Albert2020 | 28th Mar 24, 5:49pm
The guy tells you that he's got a medical issue in his family that is negatively affecting his finances (read it again Yvil) and this is how you respond? What an absolute piece of shit...
Why do you call me "an absolute piece of sh!t" ?
So we now have 49 thumbs up, thanks folks. 18 being financially affected being 37%, and 31 not being financially affected being 63%. What do we think about this ratio ? I personally think over a third being financially down, is quite a high percentage. What do you guys think ? ?
I changed a lot of my commercial setup in 2020. Preparing for the worst, but it's ended up yielding the best trading environment I've had in over a decade.
The war chest I've worked on to weather a storm is tempting me to blow it sitting on a beach if everything turns to shit for 2-3 years in the economy.
That said the drought created a lower yield. But the abundance of sunlight has meant incredible quality.
"..Generations to come of New Zealanders will not have this crucial way of having their stories told. Of holding power to account, of uplifting the voices of vulnerable people..."
LOL
Ah this is brilliant karma
Are there not sprinklers handy to turn on this river of filth?
https://www.nzherald.co.nz/business/tvnz-cuts-staff-rally-outside-broad…
signed
(silenced) wellington protestor
I think that's a bit harsh - many of those are just people who presumably show up to work trying to do a decent job for an honest day's work. It's just unfortunate that the commercial reality of their business model has changed, and perhaps some in the media are getting their comeuppance.
However, I will admit that the quote you embedded about 'generations to come' seems to encapsulate the over-inflated view of self-worth and value that many journalists and media types have of themselves.
It's just unfortunate that the commercial reality of their business model has changed, and perhaps some in the media are getting their comeuppance.
What I don't understand is why they didn't see it coming. As suppliers to the media industry, Nielsen and Kantar have been laying people off for 5 years. Nielsen is not even a public listed company anymore. Both are owned by private equity.
Probably some combination of
- Ego - "it won't happen to us as journalists are so important". Even now Stuff is still w*nking on about holding the powerful to account, and having courageous conversations and all that crap while the digital hand is outstretched begging for donations. Sniffing your own farts is not good for clarity of thought.
- Refusal to accept the inevitable, or perhaps naivety - "a turnaround is just around the corner", or "the government will bail us out" (well the last government sort of did, didn't they?)
- The inherent difficulty of predicting the future.
- Larger organisations are usually pretty slow moving, so hard to pivot to what is working
New Zealand's new pastime: Shitting on people in particular careers, goes alongside shitting on people with a different political compass.
One classic is the old "10 road workers standing around leaning on a shovel" chest nut. Like Fulton Hogan (a private company) who are paid either lump sum or measure/value contracts would hire 3 x as many people as they need to do a job.
Suspect it's an extension to our mental health crisis, people compensating for their huge insecurities by projecting their negativity and hatred of oneself onto others.
The MSM have history themselves
https://breakingviewsnz.blogspot.com/2024/03/david-farrar-all-job-losse…
‘Likely affected by recession headlines’
That’s a big reckon. Maybe partly true. But maybe we really are getting deeper into recession, and, you know, people are genuinely a bit worried. Restructures and redundancies are starting to get very common. That’s a reality, not a headline.
Really good article on why Estonia's education system is one of the best in the world. Here are some snippets but I urge you to read the article and then consider what our current Govt is suggesting.
Kallas thinks the strength in Estonia’s education system is because “it’s built from the bottom-up, not run by [central government], and it never was. The education system is older than the state.” Are there politicians who would like to have more control over it? “Surprisingly not,” says Kallas. “Everybody leaves [education] to the experts. Teachers and universities debate it, sometimes publicly and there are arguments about whether it should be done this way or the other way, but it’s not the politicians.”
Creative subjects are just as valued, Tire explains: “They all have to take arts and music, and [what we call] ‘technology’ – in other words, they learn how to cook, knit, things like that. If we allow kids that, their wellbeing and sense of accomplishment increases. We don’t think that that’s irrelevant. Some countries say: ‘We took out the music lesson to teach more maths.’ But look at a sheet of music and you will not think it is less complicated.”
I wait at the front gate for the headteacher and watch young children walking off home by themselves, or with friends. “They tend to be very independent,” says Henrik Salum, the (young, jeans-wearing) head.
One of the abiding principles, she says, is equality – universal free school lunches are as much ideological as they are practical. And almost all children attend kindergarten, which is heavily subsidised, so that by the time they start school at the comparatively late age of seven, disadvantages are not as entrenched. Autonomy is also fundamental. “We have given schools the ability to decide for themselves.”
In conclusion as woke as you can possibly be. But I guess Estonia worked out that woke appears to work. Cue the barrage of know it all old white dudes chiming in that the Guardian is all propaganda....
https://amp.theguardian.com/lifeandstyle/2024/mar/27/free-lunches-brain…
Estonia a small nation located precariously. Badly damaged in the aftermath of WW1 and ended up at war with Bolshevik Russia.To no avail. Over run by Nazi Germany and trampled by Russia on the way back and ends up behind the iron curtain. No wonder such history generates careful planning and an embedded sense towards national security and there is no more place more important to start on that, than getting the education of the people right and proper.
From the next PM of Canada
You didn't ask for a definition, you asked "...explain what woke means. "
Edit: Pollivere spells it out
"Woke has one purpose and only one purpose. It has plenty of pretexts but only one purpose: control. It is designed to divide people by race, gender, ethnicity, religion, vaccine status and any other way one can divide people into groups. Why? It is because then one can justify having a government to control all those groups."
TA rips into RBNZ & Labour
TA even reported this "Investors have decreasing interest in either purchasing a new dwelling or building one in their own development"
What's noteworthy here is that this feedback comes post the Governments proposed Landlord friendly policy changes too! Speaks volumes about the long term prospects of house price appreciation from the culprits investment perspective. The Flippers of yesteryear (now bag holders) have once again cast their votes and it would appear those who once echoed the words "rental income is a key driver of capital appreciation over time" are now predictably losing the faith!
Houses should be for living in and not speculating on anyway....
Does not a KC get more per day in NZ? its hardly outrageous to want the best in charge of a possible $200bil pipeline of work.... we tried clowns like Tryford as a minister to get stuff done........ so many clowns have wasted so much.
The people have spoken and the red clowns are out, long live the blue clowns!
McCully? Blimey that’s one from the back corridors I would suggest. Apart from being Minister of Sports & FA’s which involved requisite international travel, attendance at high level events and occasions, with due entertainment and trappings, all I can otherwise recall is the major stuff up on the wharves with vehicles more log jammed than logs, when he was Minister of Customs.
Remember that Saudi sheep deal
https://www.nzherald.co.nz/nz/saudi-sheep-scandal-putting-murray-mccull…
Mate there are thousands who have been advised they have 4 weeks notice.... its EVERYWHERE this week, many are so scared by the confidentiallty clauses nothing is being said, contractors are not even shown on the new org chart as where not on the old one..... ITS BRUTAL
Its worse then the GFC more like 1987-9
Yep this is the end result of all the clowns that voted two terms Labour, unless you honestly think its all gone to shit under national in only a few months, which is probably what die hard Labour voters are thinking. Labour got us here, plain and simple, its going to take years to unwind the mess.
Recovering from COVID (yes remember that) we were in pretty good shape compared to other countries....but after reversing nearly everything labour did you are under the batty illusion this mob have any idea what they are doing. Batten down the hatches ...for 3 years ..watch them tear up the nation..first guess mining off Taranaki basin will be approved
I think Companies went through 23 not replacing but not realy firing, now they are in the NACT playboot and the 5-10% plus contractors is standard. NACT are going to have to provide stilulus at some point to flip this, and $20 a week tax cut not going to cut it. If a global recession sweeps in its going to possibly be the worst since the great depression for NZ.
I see Bankman-Fried only got 25 years....
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