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
There were mortgage rate cuts today from the Co-operative Bank, Kainga Ora, and Unity Money.
TERM DEPOSIT/SAVINGS RATE CHANGES
The Co-operative Bank trimmed some TD rates today. And Xceda Finance launched a new Super Saver call account today, at 5% with interest credited monthly.
STILL DEPRESSED
Housing sales and prices both rose in February but sales were still well below long-term norms. Although February housing sales volumes up +38% compared to February last year a quick check of any chart tracking real estate sales shows depressed conditions, and that 'growth' is only because the base was so weak.
ANOTHER DUNEDIN
January year saw net migration gain of +2573 people a week, Statistics NZ says. Migration added another net +133,835 people to our population in the January year. For reference, the population of Dunedin is 134,100.
INBOUND TOURISM LIMP
The rise in tourists arriving is no longer a strong one, mainly because Aussies arrival growth has stalled. There were 326,400 foreign tourist arrivals in January, lifting the recovery from 79% of pre-pandemic levels in December 2023 to 82%. A recovery of arrivals from China isn't happening either.
DROUGHT STRESS SPREADS
The Government has classified the drought conditions in the Marlborough, Tasman, and Nelson districts as a medium-scale adverse event. This brings minor financial aid for support, but also sets in place MPI monitoring and support in case it gets worse.
RBNZ PUBLISHES 'PROPORTIONALITY FRAMEWORK' FOR REGULATION OF DEPOSIT TAKERS
The Reserve Bank (RBNZ) has published a proportionality framework for developing standards under the Deposit Takers Act (DTA), aiming to balance the costs and benefits of regulation for different types of deposit takers, while protecting and promoting the stability of the financial system. The framework groups locally-incorporated licensed deposit takers into three groups based on their total asset sizes, with a fourth group for overseas licensed deposit takers (or branches of overseas registered banks). Under the DTA from 2028 the RBNZ will regulate and supervise credit unions, building societies and deposit taking finance companies, (non-bank deposit takers or NBDTs), together with banks, under a single framework. Currently, NBDTs are supervised by a trustee under the Non-Bank Deposit Takers Act which will be superseded by the DTA. The three groups for locally incorporated deposit takers, for the purposes of developing standards, are: Group 1 Deposit takers with total assets of NZ$100 billion or more - ANZ, ASB, BNZ and Westpac, the domestic systemically important banks. Group 2 will include deposit takers with total assets of NZ$2 billion or more, but less than NZ$100 billion. Group 3 Deposit takers will be with total assets of less than NZ$2 billion. The RBNZ says systemically important deposit takers will be subject to strong and comprehensive requirements, while small deposit takers will be subject to proportionately strong and simple requirements. Overseas licensed deposit takers, or branches of overseas incorporated deposit takers, are grouped together and will be subject to a different set of standards. They will be restricted to wholesale businesses and won't be allowed to take retail deposits or offer products or services to retail customers. The RBNZ says the framework includes flexibility to accommodate deposit takers’ particular circumstances and to move a deposit taker between groups if needed, e.g. for growth or reorganisations including mergers.
STRONG SUPPORT
The latest NZ Government Bond tender only had two maturities today but they did attract 58 bids worth $1.25 bln for the $500 mln available. The May 2028 $275 mln went for a yield of 4.46%, down from 4.55% two weeks ago. The May 2032 maturity $225 mln went for 4.56% and virtually unchanged from one week ago.
3 YEAR SUSPENSION
In a payoff for farmer election support, the Government has suspended the requirement for councils to comply with the Significant Natural Areas (SNA) provisions of the National Policy Statement for Indigenous Biodiversity for three years, while it replaces the Resource Management Act (RMA). All councils have had to protect areas with significant indigenous biodiversity since the RMA was introduced in 1991. This requirement remains in place and isn’t affected by the suspension. Other NPSIB provisions including the management of existing SNAs will continue to apply. Farmer peak body groups have cheered the suspension.
NEW INDEPENDENT DIRECTOR FOR WESTPAC NZ
Westpac NZ has appointed Debbie Birch as an independent non-executive director, starting April 18. The bank also says Jonathan Mason will retire from the Board on June 17. Westpac says Birch's roles as a director of Tourism Holdings and leadership in the Maori/Iwi sector align with its commitment to "support our customers and the communities we operate in."
AIMING FOR A MAY INTEGRATION
The rollup and consolidation into the proposed FirstCape wealth advice and asset management business, which will merge the New Zealand "wealth" operations of Jarden Wealth, Harbour Asset Management, JBWere NZ and BNZ Investment Services, took another step with Jarden shareholders approving the deal. Jarden will end up owning 20% of FirstCape. Then it will have 113 advisors, $29 bln of funds under advice and administration, and $15 bln of funds under management, including $5 bln in KiwiSaver. The new bulked-up operation is expecting to trade starting early May.
SHIFTING SETTLEMENTS
Bank settlement balances at the RBNZ fell in February to their lowest in two years at $41.6 bln. That is down -$3.3 bln in one month. Meanwhile, Government settlement balances at the RBNZ rose +3.7 bln to $30.7 bln and almost their highest in a year.
SWAP RATES FIRMER
Wholesale swap rates have probably risen modestly today, again. Our chart below records the final positions. The 90 day bank bill rate is unchanged today at 5.64%. The Australian 10 year bond yield is up +5 bps from yesterday at 4.07%. The China 10 year bond rate is down -1 bp to 2.35%. And the NZ Government 10 year bond rate is up +5 bps at 4.74%, while the earlier RBNZ fixing was at 4.67% and up +6 bps from yesterday. The UST 10 year yield is now at 4.19% and up +4 bps from this time yesterday. The UST 2yr is now up to 4.63% and so that key inversion remains unchanged at -44 bps.
EQUITY WINNERS & LOSERS
Wall Street slipped slightly today with the S&P500 ending down -0.2% in its Wednesday trade. Tokyo has opened its Thursday session down another -0.4%. Hong Kong is up +0.6% today at its open. Shanghai is up +0.5%. Singapore is up +0.6% at its open. The ASX200 is little-changed in early afternoon trade; if anything, soft. The NZX50 is down -0.2% in late trade.
OIL HOLDS
Oil prices are marginally firmer today although little-changed at just over US$77.50/bbl in the US while the international Brent price is still just over US$82/bbl. This has had no noticeable impact on the global oil price.
GOLD FIRMS
In early Asian trade, gold is up +US$18 at US$2175/oz.
NZD HOLDS
The Kiwi dollar is up +20 bps from this time yesterday at 61.7 USc. Against the Aussie we are unchanged at 93.1 AUc. Against the euro we are unchanged at 56.3 euro cents. That means the TWI-5 is still just over 70.3 today.
BITCOIN UP
The bitcoin price is higher at US$72,816 up +1.2% from this this time yesterday. Volatility has been modest at +/- 1.6% today.
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95 Comments
It may not be racist per se but it's easy to see he's using it in an insulting and derogatory manner which is highly disrespectful. It's just not necessary. The fact that it got so many upticks and there's more upticks for defending him is a sad reflection of many really.
Puting up a name like "Long Drop John" is harmless and also very very odd. So no reason to be precious when somebody plays with the name. Can't see changing John to Hone is racist. All in all it's very unimportant.
Long Drop John is leaving here. Probably a good thing.
Thick skin needed if you oppose the DGM and developers aiming to buy back in
wow .... who will buy in at lower prices if not the shorters, dgms or developers at the bottom? maybe you?
do you not understand markets... your problem is no one wants to buy in at current levels..... suck it up its called markets
STILL DEPRESSED
Housing sales and prices both rose in February
"Still depressed" is a very biased headline. The HPI rose in 10 out of 12 regions in NZ, yoy. Given interest rates at over 7% for over a year, poor GDP, rising unemployment, my expectation was for falling volumes and falling prices. Yet both have risen, significantly.
Your welcome Lonewolf
by lonewolfnz | 12th Feb 24, 5:43pm
So my term deposits unlocked and I'm buying into the market. USA equities for now, FIF tax be damned.
Any one with thoughts on what they would be looking at for 2024? I have most of the sectors covered but haven't had to think about this for a while
by Baywatch | 12th Feb 24, 9:33pm
MSTR
Weren't you complaining earlier that lunch costs $30? Seems irrelevant to all the money you are supposedly making!
That's $30 that Wolfie can allocate to rat poison. Personally, I respect those people sitting in the park eating their homemade sandwiches instead of frittering away $30 on lunch.
How much money do you need before you fritter away $30 on lunch? Surely at some point $30 becomes irrelevant.
It's a good question. And very relevant to the wealth effect. From my understanding using very broad research, most h'holds are living paycheck to paycheck with approx 50% of bank accounts holding <$1,000 and roughly 2/3 holding <$10,000. But asset prices are high.
If asset prices were lower, my assumption is more people in the park eating sandwiches.
Got me thinking of the BYO picnic our school organized a few weeks back. Bouncy castle, swimming pool etc. For context there's a few wealthy streets to the South but predominately lower socio-economic in all other directions. A great school through.
Boy we felt poor showing up with home made marmite sandwiches, cut up apples, a cupcake each and a drink bottle of water. Surrounded by KFC buckets, McDonalds Share Deals and stacks of pizza boxes mostly complimented with fish and chip packs and bottles of fizzy. Not exaggerating when I say 95%, it would have been a very busy afternoon for restaurant brands and Dominoes/Hells Pizza.
If everyone spent like me then the economy would probably collapse within a month. This is because I grow and cook a lot of my own food. Eat virtually no ultra-processed garbage and feel good for it. Vendors of compost and blood and bone would do alright though. I can even make the best bread you’re ever likely to eat on less than a dollar. This is because I cook it during the hour of free power!
Gotta hustle to reach those goals sometimes… and the cost of living is not coming down anytime soon!
You sure can. And it's relatively easy to understand open orders in market.
jimbo do not short something that
A - people cannot print or naked short
B - you no NOTHING ABOUT
if you have never shorted anything in your short life, i suggest not here BTC and not now, maybe buy an out of the money put
if you do not know what i am talking about... you do not know what you are doing,
suggest you go buy a bucket of kFC
Picture this. Water cooler crew crowding around the laptop after pooling their savings for the 'big short.'
Then someone says "Which button do you press? This one?"
In all seriousness, the first rule in BTC and the wilder parts of the crypto ecosystem, only bet what you can afford to lose.
I don’t have money to do anything. But shorting Bitcoin seems like a no brainer if you did - assuming you get paid out.
Shorting BTC is the antithesis of owning it in the first place. But if you have a good hunch about its price direction, it's an opportunity. A trader celebrity who claims to have 20+ years of successful trading experience has been shorting BTC since 30K. He's been adding to his shorts up to 60K. His reputation is shot and his bank account empty.
Interesting read. Delivery and distribution costs are very low in Japan but there are trade offs. One of the reasons for this is the ultra-competitive commercial environment.
As Japan's big companies prepare to hand out their heftiest pay hikes in decades, trucking firm owner Ikuko Sakata feels like she inhabits a different reality.
Despite facing some of the country's tightest labor markets and no shortage of demand, small delivery companies like Sakata's can barely afford to make ends meet.
https://e.vnexpress.net/news/world/japan-s-overworked-underpaid-trucker…
short rec based on potential interest rate differentials - remember old fashioned FX trading
you should consult your trusted financial adviser, or your mum, perhaps some random guy from staircase property investment etc
perhaps play via a option if you cannot handle the vol
Bank settlement balances at the RBNZ fell in February to their lowest in two years at $41.6 bln. That is down -$3.3 bln in one month. Meanwhile, Government settlement balances at the RBNZ rose +3.7 bln to $30.7 bln and almost their highest in a year.
Worth pointing out that these two facts are connected. When Govt sells bonds or banks tax revenue in their RBNZ settlement account, the Govt Settlement account goes up and the Bank Settlement balance goes down.
Also worth noting that Govt and RBNZ have got very good at timing the low points to the last day in the month (when they publish these stats). Bank Settlement balances were already back up to $47.5 billion yesterday - meaning $7.2m per day of Govt interest payments are flowing to our heroic and highly profitable banks. RBNZ are doing tens of billions of dollars worth of currency trades a month at the moment.
Check out the Standing Facilities tab in this link and note the Total Fx Swaps column.
RBNZ claims in this document (page 7 of 15) that as part of its monetary operations the purpose of FX swaps are as follows:
RBNZ lends NZD (borrows USD) when short-term interest rates move higher RBNZ borrows NZD (lends USD) when short-term interest rates move lower
Bank settlement balances at the RBNZ fell in February to their lowest in two years at $41.6 bln. That is down -$3.3 bln in one month. Meanwhile, Government settlement balances at the RBNZ rose +3.7 bln to $30.7 bln and almost their highest in a year.
The government $4.0 bn 15/05/54 syndicated bond issue settled on 28/02/24.
The Reserve Bank (RBNZ) has published a proportionality framework for developing standards under the Deposit Takers Act (DTA), aiming to balance the costs and benefits of regulation for different types of deposit takers, while protecting and promoting the stability of the financial system.
Banks don't take deposits and they never lend money. They are in the business of purchasing securities. When one gets a bank loan, the loan contract is a promissory note. The bank purchases that contract from the borrower. Now the bank owes the borrower money and it creates a record of the money it owes, which we call deposits - source
It's a pretty crude concept.
In some places with low GDP, there's an informal economy involving bartering and shared resources.
But we tie money to wellbeing in a much closer way, so I guess it just means each person is a bit poorer.
You would expect our GDP per person to decline as the population ages out.
Not felt as much in their pay packet, no.
You could make some sort of convoluted case that the money or benefit trickles through public services.
They have trains I guess. But they also don't have the same level of social welfare, sick pay, holiday pay and a whole host of workers benefits and rights.
So all goes back to meh's question of how relevant it is. It's like the old business adage "turnover is vanity, profit is sanity".
They have trains I guess. But they also don't have the same level of social welfare, sick pay, holiday pay and a whole host of workers benefits and rights
What? Japan has an infrastructure surplus. They have a developed medical system; a social welfare system; and employment laws.
During their bubble, corporate salaries were the highest in the world and bonuses were the equivalent of 2 months' salary.
Only since the bubble burst has income slowed and salary conditions become worse. But that happens during 30 years of deflationary conditions.
Of course the Anglosphere thinks that could never happen in our countries.
Same level
They have those things, but much of it's less generous.
Kiwis with a years service get twice as much annual leave and 12 public holidays. The Japanese don't get sick leave, and have to dip into annual leave if they're sick. Way less maternity leave. Much lower levels of social welfare.
So the question begs; if the Japanese worker isn't benefitting from this higher GDP growth in their pay packet, worker entitlements, or social services, how else is this so called higher growth benefitting them?
NZ is potentially going to end up in a similar place as Japan. Albeit at a much slower pace.
Read what I said - I didn't say you have to go to work if sick, I said Japanese law and employment contracts typically don't have a provision for sick pay - you don't go to work if you're sick, but you either don't get paid, or it's come out of your holiday leave.
On the other hand, you have not explained how the average Japanese worker is compensated for the higher GDP growth, if not for wages.
Its Idiocracy
https://en.wikipedia.org/wiki/Idiocracy
Over the next several hundred years, societal expectations and technological advances lead the most intelligent humans to go childless, while the least intelligent reproduce indiscriminately.
Mmmmmmm
We all know why IT GUY, everything is stretched to the limit and the house of cards globally is teetering, and will come crumbling down if panic sets in and sadly the banks are doing all they can to smile and pretend that their pants aren’t on fire with the flames spreading.
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