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
No changes to report today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
DEPOSITOR COMPENSATION SCHEME LAUNCH APPEARS SET FOR JULY 1
Deposit taker regulations and a Deposit Takers Act commencement order have been issued ahead of the planned mid-year introduction of the Depositor Compensation Scheme. Provisions coming into force on April 1 relate to Reserve Bank information gathering powers. Provisions coming into force on July 1 enable or support the scheme's operation. The regulations, which come into force on July 1, prescribe matters relating to the scope and operation of the scheme. The scheme will provide protection of up to $100,000 per eligible depositor, per licensed bank, building society, credit union and deposit taking finance company, in the event of deposit taker failure.
LOWER PRICES ARE WHAT SELLS
Actual selling prices are down and new listings and stock levels rose as 2025 got underway for Barfoot & Thompson, Auckland's dominant (40%) realtor.The average selling price plunged -$133,000 in January to $1,053,400 and the median price was down -$50,000 to $950,000 as their sales turned to the cheaper end of what is available.
TOWNHOUSE WEAKNESS SHOWS UP IN DECEMBER
Building permits for dwellings totaled 2,478 in December, a -5.6% drop from November and more than reversing the November rise. This was largely due to a big drop in building consents for townhouses which were down -12% from the same month in 2023. But standing back a little, the overall December result indicates consent levels are now at a floor because they have been at the same annualised level for seven months now.
WORSE FOR OTHER BUILDING
Infometrics reported that non-residential building in December recorded its weakest month since May 2020 (seasonally adjusted), with the $507 mln total value of consents down -22% from December 2023.
NZX50 STABLE
Here are the key changes to know about in the New Zealand equity market. As at 3pm, the NZX50 is largely unchanged, with rises by Skellerup, THL, Mercury, and a FPH bounce. But Gentrack, Oceania & Summerset dominated the falls
SURE TO BE A GOOD ONE
Many eyes will be on tomorrow's GDT dairy auction. It is hard to know what the threats of new US tariffs and retaliation will do to this market. Futures traders think prices will rise in USD, with the WMP price firming +1.5% from the last Pulse event last week, and the SMP price up much more, up +4.5%. Time will tell. But in any case the falling NZD will mean healthy rises in NZD equivalents. How much of the rising USD in combo with the falling NZD flows through to farmgate prices depends on existing hedging contracts. Details of 2024 hedging policy is here.
EYES ON THE JOBLESS RATE
Also tomorrow, we will get the Q4 labour market data. That is expected to show that unemployment rose to 5.1% from 4.8% in Q3-2024. A material variance will have financial market implications. A 5.1% result would be the highest since Q4-2020 and the early pandemic pressures (quickly reversed with a fast public policy response). Prior to that, it will be the highest since Q4-2016.
TARIFF WAR UPDATES
On the global diplomatic front, Canada, Mexico and China are showing they know how to respond to the Trump bluster. Today Canada agree to to many things to "fight fentaynal", almost all of which are existing programs, apart from appointing a symbolic "Fentanyl Czar". Yesterday, Mexico promised "10,000 troops to the border". Both brought a tariff threat delay. The Mexican promise is actually 5000 less troops than what they deployed after their Biden negotiations. China is responding with similar ego-centered responses which just reinforce existing arrangements. Playing Trump is just too easy. Trump's problem is that he believes his own propaganda at the shallowest of levels, so is a sucker for bumper-sticker responses. Yes border crossings will decrease, but they were sharply down well before he took office and "took action". A new "Missions Accomplished" claim is imminent (remember George W ?). Smoke & mirrors.
SWAP RATES SOFTISH
Wholesale swap rates are probably marginally lower 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 -4 bps on Monday at 3.89%. The Australian 10 year bond yield is up +6 bps at 4.47%. The China 10 year bond rate has held at 1.64% while they are CNY holiday. The NZ Government 10 year bond rate is down -2 bps at 4.62% while today's RBNZ fix was 4.56% and down -4 bps. The UST 10yr yield is now just on 4.56% and up +4 bps from this time yesterday. Their 2yr is now at 4.26%, so that positive curve is a little steeper at +30 bps.
EQUITIES BET TRUMP WILL LOSE
The NZX50 is unchanged. F&P Healthcare has had a modest recovery. The ASX200 is up +0.4% at its open. Tokyo is up +1.7% in early Tuesday trade. Hong Kong is up +2.5%, but Shanghai remains closed, although returns tomorrow. Singapore has opened little-changed. Wall Street ended today's trade lower with the S&P500 down -0.8% in fear of reignited inflation and losses from the Tariff War.
OIL DIPS
The oil price is down -US$1 from this time yesterday now just over US$72.50/bbl in the US, and down -50 USc at US$75.50/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 RISES TO ATH
In early Asian trade, gold is up +US$39 from this time yesterday, now at US$2820/oz and a new record high.
NZD SLIPS
The Kiwi dollar has fallen -30 bps from this time yesterday, now at 55.2 USc on a rising USD. Against the Aussie we are little-changed at 90.6 AUc. But against the euro we are up +20 bps at 54.4 euro cents. This all means the TWI-5 is now just on 66.4 and down -10 bps from where we were yesterday.
BITCOIN RECOVERS SHARPLY
The bitcoin price has risen +9.1% today from this time yesterday, now at US$101,494. Volatility of the past 24 hours has been extreme at just over +/- 5.9%.
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78 Comments
Next on the hit list Europe. Despite the UK, Germany, France & Italy having economies of similar size and the Netherlands, Spain & Sweden sizeable too, they apparently are not capable of defending themselves from Russia. Trump cannot pull the USA out of NATO without about 90% senate agreement but he can dramatically downsize American contribution to defence of the Continent for a start. Curled up in there somewhere may be the gambit over Greenland. The USA now needs it for security because you guys aren’t even taking care of yourselves and if we don’t get it, then you will be all on your own out there on the hook. Just summertime idle speculation.
He wants Greenland to secure the Northern Sea route, that way he does not need to pass through Suez and can then let the middle east resolve there issues themselves without US taxpayers paying the bills.
And there is lots of oil and gas in such a beautiful pristine environment as well....
NATO is for mutual defence, meaning that an attack on one member is an attack on all.
The USA therefore needs to weigh possible benefits of a reduction in its financial and military contribution against costs associated with possible aggression by a hostile force (especially Russia).
This is one reason why Russia cannot be allowed to defeat Ukraine. If that were to happen, Russia might be emboldened to aggress against Poland, one of the Baltic states, or one of the Nordic states. Aggression against one of the Baltic states seems most likely because they have minority ethnic Russian populations that might need Moscow's "protection".
Even so the European nations would know a whole lot of territory would be lost and damage done before America could intervene and especially if the American forces and armaments had earlier been withdrawn. The original members of the EEC combined in a so called market to make themselves self reliant and were encouraged to do so largely as a result of the Marshall Plan post WW2. Instead it has blown out to near to 30 squabbling members reliant on Russian energy, Chinese manufacturing and the American military. They have failed to learn the lessons of their own history and that is now plainly and painfully obvious at their expense.
Is this Satire
Hmm. Have always felt DT won't make it to the end of his term - either heart attack (natural causes) or impeachment.
Had never thought of a internal action against Putin. Although, of course it has famously been tried/threatened before;
https://en.wikipedia.org/wiki/Wagner_Group_rebellion
But you are not wrong that the oligarchs are restless. Lots of seized assets.
https://www.yahoo.com/news/senior-treasury-official-quits-clash-1835501…
" ... Lebryk’s departure is likely to be a shock in the Treasury Department, where he served under six presidents and 11 treasury secretaries without issue."
Musk has captured the 6 trillion per year Federal payments system.
Game over.
Musk has done nothing of the sort, he can only make recommendations.
As a director of several charities, we have to spend a small fortune on audits to satisfy Govt agency's as to our probity. How is it so controversial that these very agencies are subject to some sunlight themselves?
The richest man in the world whose businesses have been supported by tens of billions of USA taxpayer money will be looking for cost savings in the government. He performs multiple Nazi salutes at the inauguration speech.
And you say, "yeah that sounds good. I am sure he just wants to do the best for the country. At last the people have some power back from the elite."
Wake up.
<edited for clarity>
I don't think it is controversial to have the agencies have sunlight shining on them. That doesn't mean Musk should be doing it. What are his qualifications to be the person to lead this and make recommendations? Does he have any conflicts of interest, does he shine a light on the money he has received from the Federal government? He is not qualified. DOGE sits outside all conventional checks and balances, he has not had to go through any kind of selection process other than donating millions to Trumps campaign. I would trust Musk to audit any of the charities you are a Director of, I wouldn't let him near my bank account details. You know better than conflating 2 different issues. You are smarter than that.
Hey, he paid for this job fair and square with his campaign contributions.
If he happens to recoup some of that investment with more public funding to SpaceX or some other company he has as stake in, that's only fair. A good relationship is all about give and take.
Does he have any conflicts of interest, does he shine a light on the money he has received from the Federal government? He is not qualified.
What are the qualifications to be a bureaucrat? To be in the bureaucracy and have climbed the ladder pleasing your political masters?
I recommend Russian writer Nikolai Gogol who masterfully depicted bureaucracy in his work. Gogol often exposed the widespread corruption within Russian government institutions and portrayed bureaucrats as complex individuals, often trapped within dysfunctional systems.
Another good one is Free to Obey: How the Nazis Invented Modern Management.
Fascinating for its parallels to modern times, but not the expected ones. Parallels of rants over bureaucratic inefficiency and how politicians need to instead take more control and work around them, creating a fast track for their favourite projects. And of course the usual "privatise everything!" palava and handouts to oligarchs etc. Hilarious messes resulted, obviously.
(Specifically not talking about the not-hilarious messes the Nazis also created later.)
Donald Trump makes DOGE head Elon Musk a 'special government employee'
"Elon Musk, who has moved swiftly to shrink the size of the US government at President Donald Trump's behest, is now considered a "special government employee", the White House says.
The designation allows Mr Musk, the world's richest man, to work for the federal government but potentially avoid disclosure rules about conflicts of interest and finances that apply to regular government employees."
https://www.abc.net.au/news/2025-02-04/trump-makes-musk-special-governm…
Gracey I believe Tesla has repaid most of the federal loans it received. Tesla received plenty of state aid for location of giga factories etc. Tesla also receives a lot of credits from other vehicle manufacturers. He has wisely exploited the climate agenda for his financial benefit, sounds pretty smart to me.
Space X I'm not sure, given the sensitivity of it I'm sure there are "agreements".
Musk risked it all to partner with Trump, it could have all gone very badly for him. Quite ballsy given the polls were pro-Harris the entire campaign. Though I'm pretty sure Musk knew they were going to win, he is too smart to rely on the media.
So.... those betters were wrong
Polymarket has a 26% chance Trump will remove Canada tariffs before March. Down from about at 60% a few days ago.
Order book slim here and not so sure the degens are interested in Trumpty's strategy.
https://polymarket.com/event/will-trump-remove-blanket-tariff-on-canada…
https://www.cnbc.com/2025/02/03/trump-signs-order-to-establish-a-sovere…
Trump tapping public money like any good dictator.
Jacinda was a crock, hence she lost the election, it was never ever Bonfire Hipkins fault.
She was weak and lost control of her party, the Maori caucus bid for power was the end of Labour, hell even
Helen understood the Overton window, Jacinda was too busy writing her preparing her CV for international opportunities.
How do you go from no coalition in an MMP system to 29% support without complete crap management, but just like the left
Still idolizing, Kamal Harris Labour still do not blame Jacinda and her lack of ability to read the room.
Labour should have got 3 terms with support out of that lead...
Greatest crypto crash in history has experienced a "v shape" recovery and we're back to where we started. Well at least ratty. The major altcoins still a bit punch drunk. Down in the dungeons, it's like Genghis Khan's hordes have been out on a massacre - the degens have no money or resources left and the coins sit there unwanted.
My reckon is that we're experiencing a washout and I expect the market to consolidate. The degen coins won't disappear but will attract fewer punters. Institutions and normies entering the space will gravitate towards larger cap dino / boomer coins.
And the billionaire holders profited massively and now own/control an even greater percentage of the legit crypto market.
Trump's going to interfere (manipulate) on a regular basis - and we'll see rinse/repeat a lot I suspect. All the while capturing more for himself and the 'chosen few' oligarchs (individuals).
And the billionaire holders profited massively and now own/control an even greater percentage of the legit crypto market.
Who are these billionaire holders of crypto? Trump? I doubt he personally owns much. The Winklevii twins probably own the most out of billionaires, but remember they were early adopters back in 2013 when Bitcoin when it was trading at around $120 per coin.
AFAIK its nothing to do with Kiwisaver schemes or investors, its a deposit guarantee scheme.
https://www.interest.co.nz/personal-finance/130985/non-bank-deposit-tak…
Australia is a broken country politically and the latest news about a politician believing that they're above any kind of accountability is just another episode of the ruling elite and institutional power taking the pis. Aotearoa is similar but our lot are not so brazen.
Politicians used to resign over things like abusing entitlement. Not anymore, The rules are kept vague and flexible to allows them to never be accountable. They decide their own punishment and the higher up the chain of command, the less accountable you are. The foot soldiers might get fired for taking a paper clip.
And I think it's important to point out that politically connected professional white woman are untouchable in the Albo regime.
The ministerial career of NSW Transport Minister Jo Haylen is in the balance after it emerged she dispatched her taxpayer-funded driver to repeatedly collect her from her Caves Beach holiday house for personal trips, including a boozy lunch and taking her children to weekend sport in Sydney.
As Premier Chris Minns said Haylen would not be sacked over her use of ministerial drivers, Labor MPs were questioning whether the Summer Hill MP could survive after it was revealed she booked a driver on a 13-hour, 446-kilometre round-trip for a three-hour lunch in the Hunter Valley on the Australia Day long weekend.
https://www.smh.com.au/politics/nsw/jo-haylen-won-t-be-sacked-over-mass…
She should have just driven drunk, crashed, and then resisted arrest, all after an afternoon of shoplifting from her favourite boutiques, and giving blowies in the loo of her local drinking establishment.
Australia has a long way to go to catch up to the quality of NZ's politicians.
She should have just driven drunk, crashed, and then resisted arrest, all after an afternoon of shoplifting from her favourite boutiques, and giving blowies in the loo of her local drinking establishment.
I'm speaking to the culture of entitlement within institutions, not to the behavior of certain individuals. I believe they are connected.
Crikey gets it.
“Wrong decision.” “Not a good look.” “A judgment call.” “The rules must be changed.” “A shocker, a major mistake.”
Haylen’s position looks increasingly untenable as more and more details emerge. She seems to have little clue exactly what the problem is — her brave admission that she made a “wrong decision” and a “mistake” makes it sound like she ordered a cab sauv with her fish main, rather than abusing the perks of office. For his part, instead of sacking her, Minns has emphasised the rules are vague and allow personal use and has promised to overhaul them. That’s nice of him.
https://www.crikey.com.au/2025/02/04/jo-haylen-winery-trip-nsw-labor-ch…
The last NSW Premier, Gladys Berejiklian, should have been jailed. Her partner was selling access to her and development consent approvals. The two of them moved projects around the State to suit his business contacts.
She played the "unlucky in love" naive spinster card to great effect.
And the CEO who hired her, Kelly blah blah something, had to resign after numerous catastrophic data leaks.
The subsequent investigation revealed she had done nothing to rectify the issue despite multiple warnings, no testing, no remediation. Just clipped the ticket for $7m a year.
Big call on the ‘floor’ on dwelling consents. You might be right, but I am not convinced.
As I have said before, building consents often take months for councils to process. It’s essentially a sunk cost, so most developers will continue with the consent process and secure the consent, even if their views have changed on construction.
There’s lot of new builds on the market or about to hit the market. And a number of developers are in liquidation.
I think consent numbers will fall another 3-5%.
Then perhaps start picking up very slowly final quarter of 2025.
Roy Morgan’s New Zealand Poll for January 2025 shows the National-led Government (National, ACT & NZ First) on 50% (down 1.5% points) and clearly ahead of the Labour-Greens-Maori Party Parliamentary Opposition on 46.5% (up 1.5% points).
https://www.roymorgan.com/findings/9833-nz-national-voting-intention-ja…
Political scientist pn RNz tonight said this far out from an election its the trend , not the numbers that tell the story . and the trend is a 3 % swing.
Also right direction / wrong direction improtant , swinging to wrong direction .
Other thing i caught was she said that generally theres only about 8 % of voters in a election that are likely to change labour -natonal or v.v
https://www.rnz.co.nz/national/programmes/nights/audio/2018973540/new-p…
As i was only 1/2 listening while trying to back the trailer around the digger.
A different Man is in charge
https://www.zerohedge.com/political/bud-light-goes-masculine-new-ad-att…
https://twitter.com/i/status/1885327698483966248
still nothing is ever going to make me a bud light drinker.
I see your commentaries lean heavily to the left. It's obvious you don't like Trump or what he stands for. You are welcome to your opinions but not here.
How about you keep your commentaries unbiased and focus on the financial & real estate markets using trends, data and forecasts.
If I wanted biased political commentaries, I would watch the news.
Really, your economic forecasts would be a lot more believable if they weren't so biased.
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