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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