Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
NBS (Nelson Building Society) cut its fixed rates today by between -15 and -25 bps. Update: Westpac cut some key rates. Details here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
The risk-free NZ Government Kiwi Bonds have had some rate reduced. More here. NBS also cut its popular TD rates, by between -5 and -15 bps. Update: Westpac cut some key rates. Details here. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
MORE OUT, BUT EVEN MORE IN
Although a record number of people left NZ in the 12 months to November, there was a larger flow in so the population rose from migration by +30,000 in that period.
A SLOW GRIND HIGHER
Tourism arrivals rose +5.9% in November from the same month in 2023 to be at 86% of pre-pandemic levels. That makes it six consecutive months of arrival numbers above 85% of pre-pandemic levels for the first time.
SUCCESSFUL BOND TENDER. YIELDS STABLE TO SOFT
Twenty-nine bids of the 144 made today at the NZGB bond tender offered $1.76 bln for the $500 mln available. The May 2031 $200 mln went for a yield of 4.24%. little different to the 4.19% at the prior equivalent tender 14 weeks ago. The May 2036 offer was new and that went for 4.75% YTM. The $100 mln May 2041 went for 5.04% and less than the 5.14% at the prior equivalent tender a week ago.
A SURPRISE CUSHION TO THE BIG OBEGAL CROWN DEFICIT
The Crown accounts for the five months to November 2024 came in pretty much as forecast in the HYEFU. So the OBEGAL -$4.7 bln deficit for those five months was as expected. But this was only -$100 mln worse than for the four months to October. On a full operating balance basis however, a surge in valuation gains via the Crown's ACC and NZ Super organisation investments allowed them to report an overall -$150 mln deficit year-to-date after an almost +$2.5 bln valuation surge in the November month, which was substantially better than the FYEFU forecast.
RECESSION SHOWS UP IN THE CROWN TAX TAKE
Deeper in the Notes to these November Crown accounts we can see the year-on-year rise in personal income tax receipts was only +4.0% and that is more than a 12 year low, and reflects the tough jobs market at present. We can also see that GST actually took in -2.0% less in the year to November than the same period a year earlier, also pointing to subdued the retail environment. (But at least the November-on-November result was positive, although mainly because November 2023 was so weak.)
SAVERS PAY MUCH MORE TAX
One area of the Crown accounts that is growing is the tax take from savers. That is up almost +30% from the same tax take in November 2023. Higher interest rates and the move by savers out of low yielding accounts into higher paying ones gives the Government a double benefit on their 'share'.
DATA TRUMPS SPIN
MSD released its December 2024 Benefit Fact Sheets today. And the Minister released her spin, finding "positive signs in our welfare reset". We have been tracking this data for a long time (since December 1998) and can report the December 2024 is the highest number of people on benefits as a proportion to the working population (11.7%) since the 12.1% in December 2011. Almost all categories are rising. The JobSeeker benefit is now paid to 213,300 claimants, the most since these modern records began consistently in 2008.
NZX50 SUBDUED
Here are the key changes to know about in the New Zealand equity market. As at 3pm, the NZX50 is up +0.3%. Kathmandu, Air NZ, F&P Healthcare, and Infratil lead the gainers. SkyTV, The Warehouse, Investore, and Spark are the biggest decliners
MODEST TRADE GAINS
Japan said its exports rose +2.8% in December from a year ago, meaning that eleven of the past twelve months recorded export growth. Only nine of the past twelve recorded import growth.
SOFT GDP BUT JANUARY SENTIMENT PICKS UP
The rise in South Korean business sentiment in January comes after authorities there reported a quite soft Q4-2024 GDP growth outcome.
SWAP RATES HOLD AGAIN
Wholesale swap rates are probably little-changed today, maybe very slightly softer, but keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -1 bps on Wednesday at 4.05%. The Australian 10 year bond yield is up +3 bps at 4.53%. The China 10 year bond rate has regained +2 bps to just on 1.66%. The NZ Government 10 year bond rate is up +4 bps at 4.73% while today's RBNZ fix was 4.68% and also up +3 bps. The UST 10yr yield is now just on 4.61% and up +2 bps from where we were this time yesterday. Their 2yr is up +1 bp to just on 4.30%, so that positive curve is now at +31 bps.
EQUITIES QUITE MIXED
The NZX50 has risen +0.2% in late trade today. But the ASX200 is down -0.6% in afternoon trade. Tokyo has opened its Thursday trade up +0.6%. And Hong Kong is up +0.7% in a recovery with Shanghai is up +1.4%. Singapore is up +0.4% at its open. Wall Street closed up +0.6% in its Wednesday trade on the S&P500 taking it to a new record high.
OIL DIPS FURTHER
The oil price is down -50 USc from this time yesterday at over US$75.50/bbl in the US, and now just over US$78.50/bbl for the international Brent price.
CARBON PRICE HOLDS
The carbon price is unchanged at NZ$64/NZU. The next release of units at the official auction is on March 19, 2025. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD FIRMISH
In early Asian trade, gold is up +US$3 from yesterday, now at US$2751/oz.
NZD FIRMISH TOO
The Kiwi dollar has risen +10 bps from this time yesterday, now at 56.7 USc. Against the Aussie we are unchanged at 90.3 AUc. And against the euro we are up +20 bps at 54.5 euro cents. This all means the TWI-5 is now just over 67.2 and up +10 bps from yesterday.
BITCOIN SOFTER
The bitcoin price has moved down to US$102,812, down -2.9% from this time yesterday. Volatility of the past 24 hours has been modest at just under +/- 1.8%.
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