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 RATE CHANGES
There are no changes so far today.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.
SUPPORTING THE COOK ISLANDS
New Zealand will provide $15 mln in emergency budget support for the Cook Islands in its ongoing recovery from the impacts of COVID-19. This support was confirmed during a meeting with the Cook Islands Prime Minister Mark Brown in Papua New Guinea today.
BANKING GOES SEVEN DAYS
From Friday, May 26, 2023, electronic bank payments made on public holidays and weekends can now go through on the same day. 365-day payments or seven-day payments processing, a significant industry change will now be the norm for ANZ, ASB, Bank of China, BNZ, Citi, HSBC, ICBC, Kiwibank, TSB and Westpac – banks who collectively offer financial services to the majority of consumers. The project was led by Payments NZ.
MANUKA'S NOT NZ OR SPECIAL. AUSSIES WIN
The Intellectual Property Office of New Zealand ruled for Australian objectors in its decision on the opposition to the ‘MANUKA HONEY’ trade mark application. The decision refuses the application to register ‘MANUKA HONEY’ as a certification mark. It refuses the application on several grounds, including that ‘MANUKA HONEY’ is descriptive of the goods of the application and is therefore not registrable under the Trade Marks Act 2002.
TWENTY SEVEN MONTHS JAIL FOR $5 MLN IN UNPAID TAX & DEDUCTIONS
An Auckland company director David John Gower has been jailed for more than two years after he stopped paying tax deductions from his workers to the IRD. Gower was the director of AFS Total Fire Protection Ltd, and they owe the IRD $2,645,500 of PAYE debt and $1,373,300 of GST debt. They also owed $1,054,000 in unpaid KiwiSaver Employer Contributions and $40,900 in unpaid Employer Superannuation Contribution Tax. AFS’s workers never got the benefit of that money or any interest on it. Gower has repaid $300,000 in reparation.
S&P LIFTS RISK TREND FOR NZ BANKS TO 'STABLE' FROM 'NEGATIVE'
S&P Global Ratings has revised its economic risk trend for NZ banks to "stable" from "negative." The credit rating agency says the revised assessment remains consistent with its ratings and outlooks on NZ banks and finance companies. It says high interest rates should continue to support "the orderly unwinding" in property prices in NZ. Banks' credit losses over the next two years should revert to their long-term historical average of about 10 basis points, S&P adds.
A DECADE OF 'PROGRESS' OR NOT
Livestock numbers keep on declining. There are fewer dairy cattle, sheep, and deer in the country, according to the final results of the five-yearly Agricultural Production Census 2022. There have been consistent and faster falls since the peak in 2014. Over that period beef cattle rose +5.4%, dairy cows decreased -8.4%, sheep decreased -15.1% and deer decreased -17.1%. Stats NZ vehicle data shows the opposite for transport. But Wellington seems more focused on farming. Over the same period from 2014, the data shows the total vehicle fleet rose from 3,576,000 to 4,513,000 (+26%).
PERCEPTION TWISTS
According to a survey commissioned by the RBNZ, consumers think inflation is running at 7.6%, up from 7.3% in March. (In March it actually ran at 6.7%.) This same survey shows consumers think inflation will still be at 7.0% in a years time, but down to 2% in five years time. Those surveyed have never felt house prices were falling and don't now either. More here.
CHINA HOLDS
China has reviewed its key policy rates and left them unchanged in its May reviews The People's Bank of China (PBoC) maintained its key lending rates steady for the ninth straight month at May fixing, as widely expected. The one-year loan prime rate, which the medium-term lending facility uses for corporate and household loans, was left unchanged at 3.65%; while the five-year rate, a reference for mortgages, was kept at 4.3%. The move came after the central bank held its medium-term policy rate at 2.75% last week.
SWAP RATES HOLDS
Wholesale swap rates are probably little-changed from Friday. However, the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is up +3 bps at 5.82% and 57 bps above the OCR. The Australian 10 year bond yield is now at 3.59% and down -3 bps from this morning. The China 10 year bond rate is little-changed at 2.74%. And the NZ Government 10 year bond rate is now at 4.44% which down -3 bps, but still above the earlier RBNZ fix at 4.42% which is up +1 bp from Friday. The UST 10 year yield is now at 3.67% and down -2 bps from this morning.
EQUITIES MIXED
The NZX50 is down -0.9% to start the week. The ASX200 is down -0.4% in afternoon trade. Tokyo has opened its week unchanged and holding near its recent highs. Hong Kong is up +1.4% in early Monday trade (and displaying its usual volatility). Shanghai has opened up +0.4%. The S&P500 futures suggest Wall Street will open little-changed, up +0.2% perhaps.
GOLD HOLDS
In early Asian trade, gold is down at US$1978/oz unchanged from this morning's open.
NZD HOLDS
The Kiwi dollar is little-changed from this morning at 62.8 USc. Against the Aussie we are also unchanged at 94.3 AUc. And against the euro we are still at 58 euro cents. That means the TWI-5 is little-changed at 71.3.
BITCOIN SLIPS MARGINALLY
The bitcoin price is a lower today, now at US$26,631 and down -0.9% from where we opened this morning. Volatility over the past 24 hours has been modest at just on +/- 1.2%.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
84 Comments
S&P lifts NZ banks ratings...time to move your savings into kiwibonds!
Across to the other parachute string?
Blind judging the blind
It was the emergency parachute. See you on the ground in a few minutes. You will get there a bit quicker.
One year swap has pulled back a little (5.94%) after its big surge last week. But it and the 90 day bankbill rate still > 50bps above OCR so would think a 50bps rise in OCR could be quite likely.
Might have to agree.. household survey will add impetus too
Its very exciting! We dont have long to wait 🤗
Just so frustrating – roughly a million more vehicles on the road since 2014 – 26% increase.
Where’s the planning for this – the infrastructure required?
Immigration picking up again – fantastic – even more vehicles coming to a town near you.
And on it goes.
I wonder what proportion of NZ households can function without a car. Even Julie Ann Genter probably has a car. And if she doesn't, it's probably because she gets taxied around at the taxpayer expense.
The reality is I’m not going to give up my car – and neither will the vast majority of NZ’ers – at least for the foreseeable future.
We need to deal with what is – rather than some fantasy world that exists in the minds of a few – it’s simply not going to happen.
Either plan with some degree of intellect when it comes to a rapidly growing population being immigration driven or just stop until you can do so.
Pretty much impossible to survive without a car if you have kids. Especially if they are ones who are into sports.
Your first sentence stops short. It should continue: 'and can't contemplate the temporary nature of your way of life, nor its impacts on said kids.'
I remember having such a discussion with such a parent, and she said "that won't work for me". We got quite arrogant, didn't we, for an overshot species?
https://elements.visualcapitalist.com/visualizing-the-accumulation-of-h…
You talk a lot of horse manure, honestly.
Did you have kids? Did you survive without a car? Do you have a car now? Be honest.
One of your top posts here House.... absolutely spot on.
He's kinda right. The baseline standard of wants people have that they insist are needs is pretty crazy.
People's kids shouldn't have more than about a 20 min walk to school unless they're living in the sticks. Instead most people are paranoid their kids will be abducted or run over, or insist their kids need to be ferried across town because their local school isn't up to scratch.
I don’t disagree with that and our household uses walking, cycling and public transport a lot.
Yeah, it could be all the time though, but that's less convenient, and it's now raining in NZ every other day.
It's possible, just less desirable.
Yes walking in the rain is very dangerous?
Nice gaslighting, with the criminals let out of jail by labour and the big increase in homelessness (not to mention increased gang activity and general lawlessness) there is no way I would let young kids walk.
They reckon in the early to mid 2000s, fear of Zombies was at an all time high. Actual outbreaks were low, but media presence of them was through the roof.
Our whole society is built around personal independent transport. Don't vote for anyone who wants to change that. Local or national government. Not a complex issue.
Our whole society is built around personal independent transport. Don't vote for anyone who wants to change that.
I think the S'poreans, Japanese, Koreans are quite happy they can go anywhere without a car. In fact, I could take a train from central Osaka to the skifields in Nagano. Didn't even have to lug my gear with me. It would be couriered to my lodge for approx $20. Once at the lodge, take a shuttle bus to the lifts.
Japan had 4.2 million new car registrations last year.
Interesting fact, all of them need to prove they have a parking place before they are allowed to be registered.
Here we have a communist system where the state provides free parking to all.
Lucky Japan - perhaps more parking spaces freeing up – another hidden benefit of a declining population?
Interesting fact, all of them need to prove they have a parking place before they are allowed to be registered.
Correct. I owned a car before I left Japan and had to show the parking registration to register the car.
A little bit of contradiction there JC
Further up youre spouting about the trains and shuttles, but now reveal that you actually owned a car 🤫
You can own a car and believe that public transport and walking and cycling are better ways to carry out MOST of your journeys. Only the ideologically miopic cannot grasp this idea and believe that any support for other modes means you want to ban all cars.
Retarded.
Myopic
Dont be offended when I tell you, You need a little more Myopia
Yeah it’s ridiculous when you think about it. For the price of rego you can occupy enough space for a car a 24/7 365 days a year. Insanely cheap land lease.
Imagine if one could lease at that rate and plonk a home on it?
why not?
They'll do it because it's the most feasible option. Most people will pick the option to travel wherever they want, whenever they want over being confined to public transport.
But yeah, public transport is usually better when there's a lot denser populations. Economies of scale, n stuff.
A lot of the people buying EVs are really quite well off. So they can afford to keep their ICE SUV as well. Can't drive both at the same time.
With so many cars around I wouldn't be surprised if the kms per year driven (in each car) will be really quite low compared to what it used to be.
Yep I survived without a car there fine. My sister in law and her family can’t survive without a car though, again cos of kids sports stuff mainly.
If every household in NZ only had one car that they used when needed there wouldn’t be a problem.
Probably 75% or more trips in NZ are well suited to waking, cycling or public transport. The fact that 25% aren’t so suited is not a good reason to not invest in the other modes.
After a certain size car travel doesn't scale. No matter how much money you throw at it. It's physics. It's amazing how stupid New Zealander's are in this regard.oh, I forgot NuZulund us duffrunt
We were different - we had a small population and one car per household. Now we have the same problems that other countries have realised you can’t solve by building more roads.
I know Jimbo, I work in this field. I deal with these people all the time. It's just really cathartic to use the anonymity of this forum to call them out as fucktards, instead of having to patiently explain how their hot takes/common sense/reckons are like little kids having a tantrum when you tell them they can't have any more sweeties.
Yeah nah, that won’t work here, it’s too expensive/difficult/different/(insert half ass excuse here).
Im constantly amazed by the can’t do attitude of kiwis, who like to see themselves as some sort of salt of the earth no 8 wire ingenious nation of battlers. Instead we are lazy petty bureaucratic morons arguing that we know better than foreigners and whatever idea that works absolutely fine elsewhere won’t work here for unknown reasons.
We fly 500kms from Auckland to Wellington in c45mins to avoid the 8 hour odd drive. A high speed train like the rest of the developed world could do that in 2 hours central city to central city.
We could upgrade to dual stock tracks and use it to shift freight instead of hordes of slow trucks on our narrow windy roads
A rough back-of-the-envelope calculation for an Auckland to Wellington fast train (using the Japanese Shinkansen and a Tokyo-Kyoto trip as the reference point) would take around 3 hours.
The flight is around 1hr. However, you've got to add on needing to be at the airport an hour early, and then the fact that airports are usually further out of town than train stations.
Astronomical build cost aside, the train would surely be the more "time effective" method for many as you typically have much less wasted time versus the wasted minutes standing in airport security, or queuing to board, or queuing to get off, or not being able to work on your laptop during takeoff and landing etc.
I travel regularly to Dunedin from Chch (basically a straight line down) as well as stop in at places like Ashburton and Oamaru on the way. Dunedin airport is out in the goonies, and I'd much rather have the ability to sit down for a few hours and read or get work done rather than being tossed about in some cramped ATR72.
If a magic lamp granted me one wish for transport infrastructure in NZ, it would be fast rail between cities. Dreams are free.
Are you aware of OceanFlyer? I'm surprised it hasn't been discussed in this thread at all. They are electric zero emission sea planes that will cruise at only a few metres above the sea surface to take advantage of the massive aerodynamic drag reduction known as ground effect. They're planning to start operating here within a couple of years and eventually across the Tasman as well, supposedly with times comparable to current air transport.
As someone who has operated aircraft extensively in the low level coastal environment, all i can say is, you'll be begging for your ATR back. 🤮
China has the most high speed rail in the world. They have over a billion people.
About 5% make a profit.
15% or so can cover their debt repayments.
Another 20% or so can only cover the interest.
Another 20% can only cover their operating costs.
The rest can't even pay for the power to run the train.
This is a great comment. For comparison, how many roads in New Zealand make a profit? How many cover their operating costs?
Is there any party planning on getting rid of cars? I highly doubt it. But offering other options isn’t such a bad idea is it? Especially as it is well known that cars don’t scale well particularly at peak times.
I'd vote for Act or National if they privatised the use of roads by cars , privatised all off-street parking and got rid of the communist style free on-steeet parking. You know, like if they actually put in place policies that reflect what they say their values are rather than policies that support their rich mates (car industry, roading infrastructure lobby).
I agree totally. Can you imagine the revenue that would be collected if roads had to make a decent return on investment like other essential infrastructure like electricity. And imagine all the perverse outcomes if they said “hey we’ve already built this hydro dam, let’s give the power away for free. Oh hang on we don’t have enough power anymore, we better build another one. Use as much electricity as you like people, we’ll just keep building power plants forever. Oh crap we have no more room to build them, but keep using it for free but expect brownouts and very poor service.
Oh hang on – perhaps limit the number of new entrants using power.
We do actually have a border.
It’s not necessarily a population thing, it’s a price thing. Cars are very cheap to buy and run. Households that used to have one car that got used once a day now have 4 cars being used all the time. People drive absolutely everywhere, we drive across town for a bargain because it’s cheaper than shipping locally.
The bit that gets me is the bit where people say it's because we like to drive. No fucktards, you have been forced into that transport system through intense local and central government planning measures. Your free choice is just an illusion that you think you're making because all the other options were taken away from you and you didn't even notice.
I get your point but as soon as you start abusing the other party you automatically lose the argument. I do very little in a car, I prefer to bike or walk. I wouldn’t use public transport as I don’t trust the safety aspect of it. The majority of NZers are too unhealthy aka fat to ride a bike. Also, the quality of roads, that are never swept to clear away glass etc are crap resulting in frequent punctures. Then you have drivers who don’t bother looking. For kids biking is just too unsafe these days. Walking, well as there is an increasing number of criminals and the police seem to do very little about it, as do the courts with their cultural reports….I don’t blame people for driving. These options could be made attractive but it needs the basics to be taken care of first.
How would privatised use of roads by cars work? Would private companies buy/build roads that they thought would be profitable and set up cameras and websites to collect tolls for using them (and maybe parking on them)?
Yep pretty easy really. For example if a private company had to decide whether Hobson street should be a 5 lane road or a 2 lane road plus a huge amount of development land worth hundreds of millions, I bet the 5 lane option would in no way stack up.
Maybe they could take up running marathon's
Joe Biden referenced tax cheats and crypto traders when referencing the deficit issue. Tax cheats maybe have a small impact but I doubt crypto traders are responsible for the U.S.' ills. Similarly Liz' Pocahontas' Warren is focusing on the salaries and bonuses on the leaders of the failed banks.
It's all so performative and predictable.
Haha I know right, I wonder which one of his puppet masters fed him those lines :P
They are building the base to blame Crypto for the coming recession and crack down on it harder than they are starting to.
With deposits still falling, govt/Wall St trying desperately to figure out what to do.
Treasury Secretary Yellen held talks with major Wall Street CEOs and bank advisors, raising the subject of further bank mergers. Though that part of the discussion wasn't in the official readout, it was reported anyway and something Yellen had already said in public just a little while ago. There is every reason to believe there is more big trouble ahead. Govt/Wall Street discussions of "mergers" is just more confirmation.
Nikkei hits 31k. Banzai.
Just a reminder that banks have made massive profits with no weekend payments, near nil branches, fees for days, mortgage grunt work all palmed off to brokers... not bad for part time work.
They didn't even have to take any heat for it either. None of their lending was "irresponsible" either, apparently all that heat belongs to the borrowers who should have known interest rates couldn't stay low forever. The arbitrary setting of things like "test rates" are a pointless distraction.
Interesting to see Chinese buyers flocking back into Sydney housing market, will be interesting to see how much it happens here. Could be one to watch, a genuine potential saviour for the market?
https://www.macrobusiness.com.au/2023/05/chinese-buyers-pump-sydney-hou…
Due to the events of the last few years, the West, the Anglosphere especially, has become even more attractive to the rest of the world. Game on again soon.
Funny, I get the sense that everyone else is keen to sideline us, take over and move on.
Still, I guess some believe what they need to believe. "Look at my Johnny; the only one marching in step"...
Well, as usual, you are totally wrong.
Have you just purchased a rental or something ZS?
You've gone from the world is ending to being ultra bullish/spruiker.
ZS has always been a spruiker - but does seem to change his mind frequently.
I noticed that too. ZS resigned from our DGM Death Cult months ago.
He'll be back on his knees.
Early adopter perhaps Rob
Or tongue in cheek
It's complicated.
Are you faking it? Are you totally faking this "Look at me I'm another scumbag property spruiker, hate me" thing?
The DGM God will know, but you may still have time to confess...
I have a lot of sympathy for recent FHBs. I was shocked and dismayed that house prices were allowed to inflate so much after the start of COVID. I think prices will return to the pre COVID level and then more or less keep up with inflation once inflation is tamed. A return to the status quo hopefully.
Recent events in China and Russia and not much improvement in Africa and South America reinforces my confidence in Western Civilization as the leading system in the world. Leading by example. I acknowledge that our place in the historical stream puts us in an advantageous position.
I would consider myself inclined toward globalism as long as other countries follow our development or come up with admirable and humane ideas of their own that we would consider worth adopting. Not holding my breath for that last point though.
I acknowledge that our place in the historical stream puts us in an advantageous position.
Yeah, so is it the system that's good, or just that it's had the most amount of resources. Much of which it got through might.
It's the system that is good.
Due to the events of the last few years, the West, the Anglosphere especially, has become even more attractive to the rest of the world. Game on again soon.
Rinse and repeat ya reckon.
What will be interesting is to see how effective the Chinese govt. is at tracking down the overseas assets of these ‘investors’ if/when things implode back in the mainland.
I wouldn't be surprised if it was govt sanctioned. Soft power move to buy up prime assets to gain some level of control over the housing market. They tried the we will not buy your minerals approach and it didn't work. How about pumping the main housing market and then threatening to collapse it by pulling funds after a whole bunch of Ozzie's have invested their life savings in it. Reckon that would provide some leverage over Canberra.
Foreign buyers are banned here, and China bans transfers of money of significant size outside the country so an unlikely saviour
There’s a lot of buying through family or ‘friends’.
There needs to be a lot of family and friends in NZ to create any serious market effects.
BANKING GOES 24/7
How long will it take to update payments
on a business day they are updating after several hours for payments between separate banks
Was wondering that – but can’t imagine why it would be any different – surely it’s just all automated and doesn’t now care what day it is.
Still hourly apparently. This is the best thing banks have done for years. Great to pay someone on the weekend. Some smaller banks cant offer this though.
Prime Minister Anthony Albanese has pointed to Australia’s GDP growth during Question Time which he says is higher than any G7 country.
“Our participation rate on employment at 66.7 per cent is higher than, guess what, Canada, France, Germany, Italy, Japan, UK, US,” he said.
“Our employment growth of 2.9 per cent is, guess what, higher than Canada, France, Germany, Italy, Japan, UK, US.”
Tarric Brooker notes that when comparing nations by GDP growth per capita, Australia's relative performance plummets.
Australian GDP Growth Annual: +2.7% Quarterly: +0.5%
Annual (per capita): +0.8% Quarterly (per capita): 0.0%
https://www.skynews.com.au/australia-news/politics/australias-gdp-growt…
Good call on Manuka Honey, after all Manuka is an Aboriginal word.
Well if it was Munooka I would be inclined to agree with you.
Which mob are you from Beanie?
I see MFB back down to 19 c today after fridays 5 oclock window dressing. Short lived euphoria on a profit on the last financial year, half of which was before the cost of living crisis. Next year far less people will be shelling out for double priced food.
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.