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). It is a tricky job preparing this summary today because many things are up in the air.
MORTGAGE RATE CHANGES
ASB cut fixed rates today, but their reductions were quite minor. More here. Other institutions to cut fixed rates today include ICBC, the Police Credit Union, Unity Money, First Credit Union, and the Heretaunga Building Society. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Both Kiwibank and ASB cut TD rates today. So did Westpac. The details about those changes are here. Also cutting were, China Construction Bank, the Police Credit Union, Unity Money, and First Credit Union. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
INFLATION LINGERS
Stats NZ says high interest payments on mortgages continue to contribute 'significantly' to living costs. They report that the cost of living is rising at a +3% rate for average Kiwi households.
LISTINGS SURGE BIGLY, A VERY STRONG BUYERS MARKET SETS IN
Realestate.co.nz data at the end of January shows the mother of all buyer's markets looks increasingly likely as stock levels surge. Total stock of homes for sale hits 9-year high for the time of year, putting buyers in an even stronger position for 2025.
'US RATE CUT PROSPECTS DIE'
Capital Economics says the resulting surge in US inflation from the announced tariffs is going to 'come faster and be larger than we initially expected'. 'Any chance of more US Fed rate cuts this year just died', they say. And, amidst Trump's tariff trade war, don't forget the online economy.
NZX50 HAS A DOWN DAY ON HEAVYWEIGHT DECLINES
Here are the key changes to know about in the New Zealand equity market. As at 3pm, the NZX50 is down a sharp -1.8% with F&P Healthcare dropping -7.0%, along with Fletcher, a2 Milk, and Skellerup. Going the other way were a few including Stride Property, Gentrack, Tourism Holdings, and Manawa Energy who lead the few gains
A BIT BETTER THAN FIRST THOUGHT
The S&P Global Australia Manufacturing PMI was revised higher to 50.2 in January from a flash of 49.8, and compared to 47.8 in December. It's their first expansion in the manufacturing sector in a year, as output returned to growth. New orders fell at a softer rate and employment levels increased, supporting the clearance of backlogged work.
AUSSIE RETAIL SLIPPAGE
Retail sales in Australia fell by -0.1% in December from November, the first such retreat in nine months, though the drop was milder than the forecasted -0.7% contraction. The result points to weakening consumer spending, fueling expectations that the RBA may start cutting interest rates at their February 18 meeting. Year-on-year, retail sales only rose 3.0%, barely more than inflation's 2.5%.
CONSTRUCTION BOSSES WANT MORE TAXPAYER SUPPORT
In Australia, building consent levels were essentially unchanged in December from November to be more than +12% higher than in the same month in 2023. For all of 2024, they were +4.7% higher than in 2023. Despite those gains, the powerful construction lobby is calling for a "$12 billion injection into infrastructure" to have the taxpayer subsidise its activities.
NEW ORDER RISE GIVES A SNIFF OF RECOVERY
Although the internationally-benchmarked China Caixin factory PMI slipped to a no-expansion/no-contraction state in January, the underlying data did feature a rise in new orders. Prices eased and at their fastest pace since July 2023. Looking ahead will be difficult now given the unknowable impacts of the impending tariff war.
SWAP RATES UNDER PRESSURE
Wholesale swap rates are probably noticeable lower today on global forces so 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 Friday at 3.93%. The Australian 10 year bond yield is down -4 bps at 4.41%. The China 10 year bond rate has held at 1.64% while they are CNY holiday. The NZ Government 10 year bond rate is up +3 bps at 4.64% while today's RBNZ fix was 4.60% and up +5 bps. The UST 10yr yield is now just on 4.52% and down -2 bps from this morning's open. Their 2yr is now at 4.25%, so that positive curve is flatter at +27 bps.
EQUITIES CRASH LOWER
The NZX50 is down -1.8% in its Monday trade on the US trade war. F&P Healthcare (who manufacture in Mexico or the US market) is down -7.0%.) The ASX200 is down -1.6% at its open, and crashing from its all-time high. Tokyo is up down -2.0% in early Monday trade. Hong Kong is down -1.8%, but Shanghai remains closed and avoiding today's carnage. Singapore has opened down -0.7%. Wall Street will be nervous ahead of its Monday opening tomorrow. The S&P500 futures are suggesting a -1.2% drop.
OIL UP IN USA, ON HOLD ELSEWHERE
The oil price is up +US$1 from this morning now just over US$73.50/bbl in the US, but unchanged at US$76/bbl for the international Brent price.
CARBON PRICE STAYS IN RANGE
The carbon price is still within its tight range, today still at NZ$63/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 DIPS FROM RECORD HIGH
In early Asian trade, gold is down -US$18 from this morning, now at US$2781/oz.
NZD REACTS LIKE EVERYONE ELSE TO THE USD
The Kiwi dollar has fallen -90 bps from this morning's open, now at 55.5 USc on a surging USD. Against the Aussie we are little-changed at 90.6 AUc. But against the euro we are unchanged at 54.2 euro cents. This all means the TWI-5 is now just on 66.5 and down -50 bps from where we opened today.
BITCOIN DUMPED
The bitcoin price has fallen -5.2% today from where we opened this morning, now at US$93,050 and down more than -US$10,000 from this time Friday. Volatility of the past 24 hours has been very high at just over +/- 4.4%.
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119 Comments
Looks like some turkeys really do vote for Christmas......
''The Trump administration has stepped up its attack on Venezuelans living in the US under temporary deportation protections, revoking the right to stay of more than 300,000 people. The move, first reported by the New York Times, comes as a one-two punch for Venezuelans who were already reeling from last week’s decision to rescind an 18-month extension of temporary protected status (TPS) that had been introduced in the final days of the out-going Biden administration. Reversing the extension was a blow that affected more than 600,000 Venezuelans living in the US.
Andres Oppenheimer, writing in the Miami Herald, noted that Trump’s move against Venezuelans targeted “some of his most ardent supporters in the US – both voters and TPS-holders. Buoyed by Trump and Florida legislators’ hard-line rhetoric against Venezuela’s dictatorship, Venezuela’s exile community had overwhelmingly supported Trump in the 2024 US elections.”
The low was just below 0.40 in 2000...it also reached 0.43 in 1985.
There is no reason it could not go even lower....or higher.
I wonder if US investors think that Trump will be allowed to flounce around for a wee while but will be restrained by others with more sense. Perhaps they're expecting the tariffs will be rescinded in relatively short order accompanied by bluster of "the tariffs worked, we showed them who's boss, they've done their job and we no longer need them".
Biden actually increased Trump's tariffs. Thats why China only gets 10% this round.
https://www.cfr.org/article/weighing-bidens-china-tariffs
Just saw video on the tariffs from the opposition leader of Canada before the tariffs were imposed and how he would deal with them
Canada is facing what we New Zealanders and the Aussies faced in the 70's when Britain joined the EU. Too much too little too late like us but they will cope,. Yes a recession but I'd not expect them to capitulate. Pity they were so in the American's pocket that they, the Canadians tariffed 100% on Chinese vehicles. Perhaps understandably the Chinese Refineries will not take their crude? And tolling the pipeline to Vancouver looks somewhat pot in hole territory..just saying.
On the flip side I wonder how many wealthy US liberals will be going out of their way to buy Canadian and Mexican now. America is a wealthy place and there are plenty of ardent trump haters out there with more than enough money to pay extra out of principle. And in my experience many of them are indifferent to (ie sufficiently insulated from) the fortunes of their own economy.
I have a genuine question. Where in the world is the going good right now?
I know we love to see greener pastures offshore somewhere. Somewhere perhaps where all our profits are squandered away to. Somewhere benefiting from the rest of the world's malaise?
We recently welcomed some globetrotting friends back to NZ. They've been away half a decade, and a couple of years ago told us they'd never be back - just going to keep moving on up in the world (they didn't go to Aussie, fwiw).
But here they are, back in Wellington and without jobs. They're the least likely people I expected to see back. It's got me thinking, where's the place to be in the current climate?
English is spoken a lot more widely than that
"The English-speaking world comprises the 88 countries and territories in which English is an official, administrative, or cultural language."
https://en.m.wikipedia.org/wiki/English-speaking_world
...& in every international airport
I did say first language. In pretty much every other country (excluding some small islands) you will have day to day difficulties if you only speak English, and probably significantly worse job prospects than others. Not that that should necessarily put you off...
I didn't really mean somewhere I could comfortably go. It's a more theoretical question. Our friends were not living in an English-speaking country, though they spoke English there regardless.
I just wonder, everywhere in the world must read more or less the news we do about what's going on in the US, China, whatever. We always draw it back to the impact on NZ and how the world will break us.
Our friends in Aussie say it's not better than here, in terms of general mood/anger/fear/outlook.
I'm just wondering if there's somewhere people are sitting pretty knowing none of this can touch them, but I can't think of anywhere much. Maybe countries that are more Russia-aligned? But that sphere has its own considerable problems of course. Countries that maintain lots of disparate relationships like India, Brazil and South Africa presumably are relatively protected from some of the storm.
Mid-late 30s. Banking (one) and food safety (other).
They have a kid now, which is often the trigger that sends people back here I guess. Nice calm backwater to raise a young child. They never sold their house here.
They're more drawn to the Singapore-Europe axis, but they just saw what was going on and ran - combo of growing anti-immigrant sentiment and generally tough progression with jobs drying up. Presumably that wasn't the case even post-pandemic when they were more chipper.
Just got me thinking. It sounds almost apocalyptic out there.
Everyone is different, so it's hard to give advice, but my own view is that New Zealand is still better than many countries in the world. I remember after 9/11 many kiwis coming back to New Zealand, including Neil and Tim Finn. There are some lovely small towns to live in such as Cambridge (Waikato), and some of the banking industry has moved to Waikato eg Rabobank.
I'm just wondering if there's somewhere people are sitting pretty knowing none of this can touch them, but I can't think of anywhere much.
If I was younger and didn't think my prospects would improve, I would move to a relatively safe developing nation and enjoy the salary arbitrage from working remotely for a first world company. And invest the balance.
Moving to another first world nation isn't going to fundamentally alter most people's net position.
Yeah saw something in passing a few weeks ago of an Aussie who moved to Malaysia to do that. The argument being Malaysia isn't all that third world in the right pockets, but it's affordable, including live-in maid.
I can sort of see the appeal, especially if you're essentially at the centre of the world and can holiday anywhere. The main problem, as you may be alluding to, is you will lose all your friends and family, and possibly struggle to make new destination friends if you're not integrated into a local workplace.
Argentina appears to have turned a corner, Guyana is in high-growth mode, South Africa now has a slightly less corrupt government which is immensely benefitting it's prospects etc.
Actually much of the world doesn't care about this little game being played between OECD countries.
I would have thought the answer was obvious, New Zealand. The rest of the world is turning to shit, started telling people that a couple of years ago and have yet to be proven wrong, its only got worse. Australia is not going to be the place to be, climate change will render the place unliveable.
Might I suggest a large boat (preferably oil tanker) with a few feet of dirt in its hold for gardens, somewhere in international waters?
Offer tax-exempt no questions asked financial holding, keep your gold in a vault at the bottom of the sea in a location only you know, while building trade off its derivatives...
Capital Economics says the resulting surge in US inflation from the announced tariffs is going to 'come faster and be larger than we initially expected'. 'Any chance of more US Fed rate cuts this year just died', they say.
By triggering multiple trade wars at once I think Trump might be overplaying his hand.
And an equal amount is lost.
We're in a time where many things are over valued. There's often a spectrum of sectors that get hit harder, some can be wiped out or re-valued permanently. Intrinsic values become more sought.
Most of us aren't very good at picking winners from losers.
That'll be hurting the degenerates.
For example, the crash in $TRUMP this week has probably knocked 20-30% off his net worth. Nothing a little heavy corruption can't rebuild, but that must sting.
https://www.axios.com/2025/01/19/donald-trump-crypto-billionaire
This is wrong. 80% of the $TRUMP tokens are controlled by CIC Digital LLC, an affiliate of the Trump Organization, and Fight Fight Fight LLC, a newly established company.
Just looking at Metaplanet - a BTC holding company - on the Tokyo Stock Exchange. Down 8.8% today. However, Metaplanet is still up 2,500% over the past 12 months. Even though BTC is only up 118% over the same time period.
I've done due diligence on this company. Nothing adds up to me. Founder is American with a fancy pants math degree from Harvard. His track record looks particularly sketchy IMO.
I didn't see anyone suggest that.
Hard to imagine him and his family have anything less than a 50% interest in the 80% of locked up coins. That would still make it the majority of his net worth even at today's prices. If he doesn't give a rats it's because he doesn't understand (which I admit is possible - he is not terrible sharp and not aging well).
It's not just him owning a chunk of some shitcoin and technically benefitting from others pumping the price to enrich him. His interests own 80% of the coins and will sell a chunk of them every month starting April, with no rules on who they sell to. It is an open door to secret corruption.
If the democrats pulled this kind of shit the media and the law would be all over them, but it's just been lost in the shower of noise and announcements. No-one is holding him to account for this monetisation of political power.
If the democrats pulled this kind of shit the media and the law would be all over them
Really? Pelosi got a free pass for her rampant insider trading. She even suggested she was entitled to trade as she saw fit. The Dems are grifters. Even their evangelist types - Pocahontas Warren and AOC - are somehow able to come into wealth from nowhere. No questions asked.
And do you criticise them for this grifting? Will you criticise Trump for his grifting?
I would criticise both - the insider trading should be banned of course, but it's child's play compared to what Trump is pulling here. This is unparalleled corruption in the American system.
There's some very bad implications.
Putin: Hey Don-don. My treasury has done some thinking, and Mother Russia thinks buying $10 billion dollars worth of $trump would be a good fiscal security move.
Trump: That's fantastic news Vlad. You can do that anonymously if you want.
Putin: On an unrelated matter, could you stop sending weapons to Ukraine?
More interestingly P.
Toyota's net profit for Q4 FY2024 surged 78% year-over-year to USD12.7 billion. This significant increase was primarily driven by:
- Strong hybrid vehicle sales, particularly in overseas markets
- Favorable exchange rates, especially a weaker yen boosting overseas earnings
Despite the leaner forecast, the results from the world's top-selling automaker smashed market expectations. Operating profit surged 78% in the January-March quarter. For the full year, it totalled 5.35 trillion yen ($34.5 billion) - the first time for a Japanese company to top 5 trillion yen, local media reported.
While Toyota has been boosted by a weaker yen, it has also been a big beneficiary of cooling demand for electric vehicles in some markets, such as the United States, where more customers are embracing petrol-electric hybrids, Toyota's traditional strength.
https://www.reuters.com/business/autos-transportation/toyota-posts-78-s…
Aotearoa has My Food Bag. Aussie has Aura Energy - a “uranium exploration” company whose value has crashed by half as it bleeds millions a year from investors. Investigations show it’s never made a cent of profit in its 20-year history, despite two decades of positive “announcements.”
So many of these ASX juniors pray on unsuspecting investors. The gravy train for the directors is appealing. The ASX couldn't give a rats as they derive monthly listing fees so no appetite to look under the hood.
https://theklaxon.com.au/mundines-uranium-company-a-failure-after-20-ye…
"We can use the gold revaluation account...which we may not count as equity, but it is there."
-Dutch Central Bank, November 2022
Contrast gold's positive equity position with the massive negative equity position in sovereign bonds on every global central bank balance sheet.
Look at the Financial Acctg Manual for Federal Reserve Banks, Section 2.10.
This account allows the Federal Reserve to maintain a claim on the nation's gold reserves without physically holding the gold itself. The use of gold certificates provides a mechanism for the Treasury to monetize gold and adjust the money supply if needed, while keeping the actual gold securely stored.
The valuation at $42 2/9 per ounce is significantly below the current market price of gold. This creates a large unrealized gain on the Treasury's gold holdings, which could potentially be realized through revaluation if authorized by Congress.
Overall, the Gold Certificate Account represents an important link between the nation's gold reserves and the Federal Reserve System's balance sheet, though its practical impact on day-to-day monetary operations is limited under current policies.
https://www.federalreserve.gov/aboutthefed/files/bstfinaccountingmanual…
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