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
None here today.
TERM DEPOSIT/SAVINGS RATE CHANGES
Heartland Bank have changed most of their TD rate offers. That takes their 6 month rate up +20 bps to 6.25% (now market-leading) and their one year rate down -10 bps to 6.20% (now lower than Rabobank).
MORE MIGRANTS BUT FEWER BUYING HOUSES
Migrants' share of housing market transactions declined for the second consecutive quarter in March. Buyers with residence visas accounted for 13.1% of dwelling purchases in the first quarter.
HIGH EARLY KIWISAVER WITHDRAWALS
KiwiSaver withdrawals reached an all-time monthly high of $173 mln in March. Financial hardship withdrawals hit an all-time high of $29.3 mln in the quarter, while first home withdrawals jumped to $143.7 mln.
STILL POSITIVE BUT MUCH LESS SO. INFLATION LINGERS
The ANZ business sentiment survey for April brought more evidence of a winter chill setting in. Business confidence fell 8 points but is still a net positive, as is expected own future activity although that also fell 9 points and quite sharply. The backward-looking own activity index dropped deeper into negative territory. This survey shows pricing intentions rising slightly from an already high level, while firms report cost and wage pressures remaining very high.
PROGRESS IN COMPLEX MORTGAGE FRAUD CASE
The SFO is making progress in a complex mortgage fraud case, obtaining a guilty plea from one of the defendants in a case the agency has brought. It follows a Police referral in October 2020. Through their guilty pleas, the defendant has admitted providing misleading information to their bank as part of a 2018 loan application, including the true purchase price of the property, payment of the deposit for the property made through a cash gift certificate; and failing to disclose an existing bank loan. The defendant was charged alongside Gerard Peters, Robert Peters, and three other people who cannot yet be named. A total of 41 charges have been filed including obtaining by deception, attempting to obtain by deception and forgery.
"SEEKING VALUE" = BUYING CHEAPER GOODS
According to a NZ Post Online Retail report update, we spent $1.4 bln online on physical goods in the first quarter of 2024. Despite the tough economic times, and a lower average spend per transaction, online spending value overall was up only +2% on on the same quarter in 2023, far less than inflation. Online’s continued growth this quarter was driven by +19% more online transactions than the same quarter in 2023.
HEARTLAND'S CHALLENGER DEAL GETS GREEN LIGHT
Heartland Group Holdings says it has now received the necessary regulatory approvals from the Australian Prudential Regulation Authority and the Reserve Bank of New Zealand for its subsidiary Heartland Bank’s acquisition of Australia's Challenger Bank. Heartland Bank thus expects to complete the acquisition today, April 30.
BANKS INCH CLOSER TO CONFIRMATION OF PAYEE SERVICE
Bank lobby group the New Zealand Banking Association (NZBA) says banks now have a preferred provider for a confirmation of payee service, which they plan to start rolling out by the end of the year. NZBA says they won't announce the provider's name until contractual arrangements are finalised. NZBA says confirmation of payee’ will help people making an online payment from one bank account to another to check whether they’re paying the right account and may help identify payments to scammers. It will also help people avoid making mistaken payments to the wrong account.
REAL BENEFITS - EXCEPT WHEN OFFERED BY SUPERMARKETS
The Commerce Commission review of petrol retailing has found "genuine benefits" for motorists who buy at unstaffed petrol stations. They say that in areas that include at least one unstaffed fuel station within a five-minute drive have prices that are on average six cents per liter lower than those areas without unstaffed stations – though unstaffed stations run by supermarkets don’t have the same effect on competition.
A $1 BLN ZERO-SUM GAME
New analysis from Infometrics for a client shows that returning the GST charged on local council rates back to councils would cost the Government $1.1 bln. This is part of a LGNZ campaign to broaden the revenue base of local councils.
HOUSING DEBT SHOWS OUR PRIORITIES, STILL
Debt growth was modest in March, across all sectors, but overall it was consistently 'positive'. From Marchy a year ago, housing debt is up +3.1% (and past dues remain very low). While year on year the expansion is tailing off, the February-to-March rise of +$1.2 bln was outsized from recent months and larger than the prior year's +$1.0 bln. Perhaps the most interesting note is in lending to business, now at $135 bln (a record high). Burt it is only 38% of lending to housing, which is a long way below the 68% share back in 1998 (and before banks convinced their regulators that housing risks were less and they should hold less capital to make housing loans).
HOUSEHOLS CASH BALANCES BUILD FASTER AGAIN
Household deposits grew +$2.2 bln in March from February, twice the expansion of March 2023, and the fastest since June 2022. But that masks a +$340 mln rise in household transaction account balances, a +$630 mln in savings account balances, and a very much larger +$1.2 bln term deposit balance rise in March from February, +$19.6 bln for the year. There has only been one other month in the past two years where household transaction balances have risen, and we haven't seen a rise in savings accounts this large in 27 months. Households seem to be building cash balances in all types.
PEAKING & NOW A LEGACY PAYMENTS SYSTEM
There are now $8.6 bln in banknotes in circulation, and while the rise is a modest +0.6% in value in 2023 from 2022, the rise in $50 notes was +2.9%. But there was a fall in $100 notes of -1.1% and $20 notes of -4.7%. So, guessing here, this suggests to me that the "cashies" economy is alive & well (based on the $50 note rise), but the $100 note dark (drug?) economy isn't actually booming. While cash isn't exactly dead, it does seem to have peaked. The last two years have delivered no growth, the first time ever we have had two consecutive years like that.
SWAP RATES STEADY
Wholesale swap rates are likely to be little-changed today from yesterday, again. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 5.63%, a level it has hovered around for more than 60 days. The Australian 10 year bond yield is down -7 bps from yesterday, now at 4.47%. The China 10 year bond rate has eased -4 bps to 2.34%. The NZ Government 10 year bond rate is down -7 bps to 4.97% and the earlier RBNZ fix was at 4.93% and down -4 bps from yesterday. (At the end of March it was at 4.59%.) The UST 10yr yield is down -2 bps from yesterday at 4.61%. Their 2yr is now at 4.97%, so the curve is now -36 bps and an inversion back at last week's levels.
EQUITIES END APRIL MIXED
In the final hours trading on the last day of the month, the NZX50 is little-changed, heading for a monthly fall of -1.4%. The ASX200 is up +0.2% in afternoon trade today but heading for a full -3.0% monthly fall. Tokyo has opened its Tuesday trade up a strong +1.7% after yesterday's holiday. But they too are looking at a -3.1% April retreat. Hong Kong has opened up +0.5% today, and looking at a monthly +5.4% rise if that holds. Shanghai has opened up a more modest +0.2%, and also heading for a more modest +1.4% monthly rise. Singapore is up +0.3% in its early trade, heading for a monthly +1.3% rise. Wall Street closed its Monday session with the S&P500 up +0.3%. And if this doesn't change tomorrow their April will come in with a -2.4% retreat.
OIL SOFT AGAIN
The oil price is soft today from this time yesterday, down -50 USc at just under US$82.50/bbl in the US, while also down -50 USc to just on US$87/bbl for the international Brent price.
GOLD FIRMS
In early Asian trade, gold is back up +US$5 from yesterday, now at US$2331/oz.
NZD BASICALLY HOLDING
The Kiwi dollar has changed little over the past 24 hours, still at 59.6 USc. Against the Aussie we are a bit firmer at 91.1 AUc. Against the euro we are unchanged at 55.7 euro cents. This all means the TWI-5 is still at 69.3, unchanged.
BITCOIN FIRMS
The bitcoin price has risen to US$63,498 and up +1.3% from this time yesterday. Volatility of the past 24 hours has been moderate at +/-2.3%.
This soil moisture chart is animated here.
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22 Comments
'In the final hours trading on the last day of the month, the NZX50 is little-changed, heading for a monthly fall of +1.4%.'
Shouldn't that be -1.4%?
yes
RYM a big drop on the close. Extreme volatility on this one, they really need to make an announcement re cash raising rumours.
Wow.. 6.25% for a 6 month term... hopefully other banks will follow
I suspect there were a lot of people who pulled a ton of cash out during covid and stock piled it (especially after places like Canada started freezing people's bank accounts for protesting vaccine mandates) and those people are still swimming in cash as they havent put it back into the bank, and its now being redeployed into "cashies".
This may or may not be a personal anecdote.
Yes..we are all swimming in cash...I'm doing a staple right now...$50 notes everywhere
Household deposits grew +$2.2 bln in March from February,
Yes, they did. Why? Because banks lent out (created) a billion or so more dollars than they received in repayments, and the Crown spent a few billion more than they taxed.
As the sun sets we just borrow another 80 mill for the day and carry on......
We could just sell 80 average houses a day to foreigners
One man's debt is another man's asset. We're just expanding our balance sheet! The alternative is un-wealthing (aka debt jubilee).
Roy Morgan poll update just out: I don't expect Maiki Sherman to mention this...
"Roy Morgan’s New Zealand Poll for April 2024 shows the new National-led Government (National, ACT & NZ First) with a majority of 53% (down 3% points from March) with a large lead over the Labour-Greens-Maori Party Parliamentary Opposition on 43% (up 2.5% points)."
https://www.roymorgan.com/findings/nz-national-voting-intention-april-2…
The anti-government Newshub getting all excited about a Talbot Mills poll showing the Nats and Labour "neck and neck" on 34% and 33% respectively. Their poll also gave ACT only 7% of the vote (compare to the ACT 11% with Roy Morgan).
That has a truer ring to it doesn’t it. Conspiracy theories aside there is now a lingering suspicion that there is such an array of polls being regularly published that there is temptation for the pollster,in order to be noticed, to “discreetly” hook into and canvass certain areas of the population that have been established as being of a particular political persuasion. That motivation might well lie in the very much subjective attitude that your job, which you consider should be sacrosanct, is in fact not sacrosanct. You have to go looking for the Roy Morgan and as it happens it has regularly been more accurate than any of the others.
Conspiracy theories aside...
Hmm
And everyone seems to think the horrid "mainstream media" is out to get their favourite side, these days.
Haha I did think that last poll seemed unlikely. Maybe TVNZ getting revenge on government cost cutting.
There have been drug-fueled orgies with less arousal than the media talking heads displayed last night. I honestly don't recall polls during the election period getting so much hullaballoo in terms of how much of a news hour was taken up with endless discussion and analysis.
I don't doubt for a nanosecond that the honeymoon is definitely over for the government (some of it not their fault owing to inherited conditions - some of it due to a mixture of dumb policies and poor personalities) but one poll nowhere near an election is hardly the biggest story in the world.
I think you're on the money ... the media feels "put out" (maybe as they haven't been bailed out) and a poll like that is a good opportunity for some revenge.
If I was running the government I'd just counterpunch and float the idea of selling TVNZ, in fact I'd just go ahead and do it and not even discuss it as the government has no business trying to have ownership of what is trying to pass itself off as a commercial media outlet.
Probably to late to sell TVNZ now -should have been done years ago
It would make more sense for the Crown to buy what it wants via NZ on air including an allocation for Te Reo
Aye the silence on this one, from amongst the so far 193 commenters, on the poll on the adjacent column, is hardly not noticeable given that this poll markedly contradicts, their political cherished disposition.
Yes, still greater than 50% fir the current coalition. However, all three parties have lost a little support while the three major opposition have picked up a point or two.
Hardly a roaring endorsement of the government this soon after the election.
Other than women 18-49, theres a very clear majority of voters supporting the coalition.
Why is that child bearing demographic so stuck in Labour despite the partys 6 years of failures?
Might be more that the govt is visibly a govt of grumpy old men for grumpy old men.
Congrats to Heartland on sealing the Challenger deal. Good to see a "Kiwi Bank" actually progress
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