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 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.
ACTIVE BUT CHOOSING CAREFULLY
More first home buyers getting into their own homes but they remain cautious on price, according to our First Home Buyers report.
GOING BACKWARDS AGAIN
Stats NZ says retail card spending dropped -1.6% on a seasonally adjusted basis in January after growing strongly in December. Retailers are glum with lower sales revenues but higher costs "especially rates and insurance". Separate monitoring of their debit and credit card activity by ANZ shows the same down-trend.
DEFICIT NOT WORSE
The half year Crown accounts to December 31, 2024 delivered essentially no surprises. They show a deficit of -$4.6 bln on an OBEGAL basis at the half-year mark in this current budget year.
SOUTH AUCKLAND COMMUNITY DELIVERS
Biosecurity New Zealand has now lifted controls on movement of fruit and vegetables in the suburb of Papatoetoe following no further finds of fruit flies since a single male Oriental fruit fly was discovered in a surveillance trap in the suburb in early January. This containment only worked because the community cooperated fully.
'LEAVE OUR CONFLICT OF INTEREST ALONE'
Mortgage brokers are squealing because the Commerce Commission has suggested to them that their members should be providing three 'quotes' to clients for them to consider. They have told ComCom that brokers are the experts and just one is sufficient. All sorts of dire outcomes are foretold if they have to supply their clients real alternatives. "Nothing is broken" the brokers claim, ignoring the pervasive conflict of interest they have in this relationship with their 'clients'.
INFLATION EXPECTATIONS BACK IN LINE
The RBNZ will be quite satisfied with the results of its survey of inflation expectations out today, with the key ones firmly anchored at 2%.
NZX UPDATE
The NZX50 is down -0.3% in 3pm trade, up +0.2% from this time last week, and up +0.4% from a month ago. There are 28 gainers today, led by Vulcan Steel (+4.4%), SkyCity (+2.1%), Fletcher (+1.3%) and CDL (+1.3%). Going the other way there are 50 decliners led by Mercury (-3.3%), Heartland (-2.7%), Napier Port (-2.6%, and Skellerup (-1.7%). Market heavyweight F&P Healthcare is down -0.4%.
HARVESTING KIWIS, LEAVING BANKS IN THE DUST
The two big Aussie insurers who dominate our general insurance markets are reporting results. IAG NZ said premiums rose +5% and profits were up +63%. Suncorp NZ said its premium income rose +6% and its half year profits were up +163%.
BUMPER-STICKER POLITICS MAY BRING UNINTENDED BAD OUTCOMES
As the coalition parties jostle to hold their positions, each seems to be turning to fringe populist positions to do that to prevent being sidelined by their partners. For ACT it is the Treaty Bill, for NZ First it is the Woke Bank Bill, and anti-fluoride regulations. For National, it is attacking the supermarket chains, including NZ cooperatives. But National need to be careful what they wish for (that may be true for them all); regular readers know we track grocery prices weekly. Take a look at the Australian version in this chart series.(A$ basket, etc.) which are shooting up sharply, in contrast to the stable or even declining NZ prices. Encouraging the Australian division of Aldi here may not bring the advantages assumed.
SELLDOWN PROCEEDING
The Bay of Plenty Regional Council is moving forward with divesting some of its 54% shareholding in the Port of Tauranga which it has previously signaled it wants to reduce to 28%.
JAPANESE INFLATION PRESSURE BUILDS
Japanese PPI was expected to rise in January from December's 3.9% to 4.0%. In fact it came in at 4.2% for the year to January in a broad-based trend higher. And apart from the pandemic period, this is a ten year high for them.
BACKTRACKING
In Australia, prudential regulator APRA has had to reset lender expectations on what they will require for presale support. Earlier 'observations by the regulator had been interpreted as tightening the requirements to 100% of debt. But now APRA has been forced to 'clarify' that is isn't what they really meant. When regulators have heavy powers, no-one wants to accidentally get offside with them. So their opinions can drive unintended risk-averse outcomes.
SWAP RATES PROBABLY LITTLE-CHANGED
Wholesale swap rates are hard to tell where they might end up, 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 -2 bps on Wednesday at 3.84%. The Australian 10 year bond yield is up +4 bps at 4.54%. The China 10 year bond rate has held at 1.63%. The NZ Government 10 year bond rate is up +6 bps at 4.74% while today's RBNZ fix was at 4.69% and uup +6 bps. The UST 10yr yield is now just on 4.62% and up +8 bps from this time yesterday. Their 2yr is also up +6 bps at 4.35%, so that positive curve is now at +27 bps.
EQUITIES MIXED AGAIN
The NZX50 is down -0.3% in late Thursday trade. The ASX200 is up +0.3% in afternoon trade. Tokyo is up +1.1% in early Thursday trade. Hong Kong is up +1.0%, but Shanghai is unchanged its open. Singapore has opened down -0.2%. Wall Street closed its Wednesday trade with the S&P500 down -0.3%.
OIL FALLS
The oil price is down -US$1.50 from this time yesterday, now just over US$70.50/bbl in the US, and at over US$74.50/bbl for the international Brent price. Higher inventories and lower demand on a slowing global economy is behind today's retreat.
CARBON PRICE UNCHANGED AGAIN
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 FIRM
In early Asian trade, gold is up +US$13 from this time yesterday, now at US$2907/oz.
NZD SLIPS BACK
The Kiwi dollar has slipped -20 bps from this time yesterday, now at 56.4 USc. Against the Aussie we are down -10 bps at 89.8 AUc. Against the euro we are down -40 bps at 54.3 euro cents. This all means the TWI-5 is now just under 66.9 and down -20 bps.
BITCOIN FIRMS
The bitcoin price is up +2.0% from this time yesterday, now at US$98,033. Volatility of the past 24 hours has been moderate at just on +/- 2.1%.
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90 Comments
US inflation unexpectedly increases to 3% in January...The surging price of eggs contributed greatly to the increase, rising 15.2 per cent over the month...
The figures from the Bureau of Labor Statistics led investors to bet the Fed would cut interest rates once this year. Before the data was published, the futures market had expected the first cut to arrive by September, with a 40 per cent chance of a second reduction by the end of the year.
https://www.ft.com/content/311ae397-380b-41ec-a5d7-edd65e2768d5
Worth noting
“Costco, Kroger and Whole Foods are among the growing list of grocers that are putting a purchasing limit on eggs as supply shortages persist.
Companies started imposing limits on the product as the shortage caused by outbreaks of highly pathogenic avian influenza (HPAI)*, or bird flu, persists, causing a frenzy among shoppers. Droves of viral videos have surfaced in recent weeks, showing shoppers stockpiling eggs. One video posted on TikTok claimed that an entire section of eggs at a Costco was gone in less than 10 minutes.
Amazon-owned Whole Foods posted signs on its shelves notifying customers that customers can only buy three cartons of eggs at one time.
"We are currently experiencing difficulty sourcing eggs that meet our strict animal welfare standards," a sign posted at one of its stores in New York City read.”
In early Asian trade, gold is up +US$13 from this time yesterday, now at US$2907/oz.
It's getting wild out there.
1. The South Korean Mint suspends all sales of gold due to a flood of demand. This decision comes as gold prices have reached record highs, driven by investor concerns over potential U.S. tariffs and economic uncertainty. https://www.businesskorea.co.kr/news/articleView.html?idxno=235285
2. Chinese banks have run out of gold as soaring prices spark buying frenzy. It’s always ‘soaring prices’ that start buying frenzies. So good to buy gold when the price ISN’T soaring. https://www.yicaiglobal.com/news/chinese-banks-run-out-of-gold-as-soari…
its like blaming shorters for crashing markets, when actually they are the buyers at the lows...
JPM shorts have had a stranglehold on the gold price for a long time. Physical in "Big 3" vaults (JPM, HSBC, Brinks) have now surpassed the Covid peak hitting an an all time high. JPM traders who manipulated the precious metals markets were given a prison sentence. The fine given to JPM was peanuts - the cost of doing business.
But manipulating the gold price is now a career risk.
Trump will take exploding gold price and revalue reserves, and take credit for the better US position, he will still drain the swamp, with I am enjoying greatly, smash that lefttie swamp monster.
But like a silver bullet, you only have so many, will leave you exposed to financial ware wolves....
unless you then revalue silver reserves...
maybe the big three are now positioned for explosive upside and are helping that occur, if you thing this get long now even paper
even the bigshort guy is long here, so ride it until the water cooler crew arrieve
Ride that trend until the end
they would have more assets on that side of the ledger, and their debt to asset ratio would not look as bad....................
IMHO it would mean that the entire world would do the same , then technically they would buy gold if it fell much below this..... ie
they may move to use gold more as a reserve allocation vs fiat, I wonder why?
hint, you cannot print gold.
The problem I see is that the US gold reserves haven't been audited since 1953 - a very easy date for me to remember because that was the year before I was born.
"Trump will take exploding gold price and revalue reserves, and take credit for the better US position..."
If the Trump admin. intends to do this then surely they will need an audit - PROBLEM - the US claims to have 8322 tons of physical gold in reserves but there is considerable empirical evidence that there is such a mountain of leasing/rehypothecation, (read multiple ownership) going on, that the actual reserves are much closer to zero than that figure, and some analysts claim that the figure could even be a negative tonnage - this is the whole point though - nobody has a clue what the true tonnage is.
Of course, this would be dead easy to resolve - simply do the first physical audit in 72 years - easy peasy - PROBLEM - why when Congress has requested that the Treasury and the Fed do this audit, do they offer such feeble excuses - such as... "too expensive and too logistically challenging" - for crying out loud, that should sound like complete BS to any of us.
Of course, if there is no gold there, this would never be admitted because it would be a global financial admission of a debacle of epic proportions. The true result of the audit would never be released. Furthermore, if they wanted to rearrange their balance sheet then this is most certainly not going to do it for them.
It seems that certain people in the #47 admin realise that after 54 years of a Keynesian experiment that went horribly wrong, and with a novel global financial reality imminent, it is only playing into the hands of the rest of the world to continue to manipulate the physical price of gold down to try to protect their currency - no shit, Sherlock, and especially since the January 1 2023, Basel III reclassification of physical gold as a Tier 1 balance sheet asset.
When the BIS made this move it was painfully obvious to me that they were unceremoniously throwing all FIAT currencies under the bus, including King Dollar, the global reserve currency.
Of course, many of the BIS member banks were in the know and they four-ran the announcement by at least 2 years, they were frantically gold stacking, and they will continue to do so as long as the US encourages them by suppressing the true value with the monumental artificial paper market.
The Fed was the only CB on the planet that bet against gold - this in itself was huge because it meant that the suppression of the gold price was no longer a team effort by big Western-centric CBs - the end of an era of international cooperation in trying to prolong the life of the is fiat currency status quo.
The latest development is that a very substantial entity is taking delivery of ~4 million ounces of gold (around $11.2 billion at $2800/oz US) - this could only be the US govt, the Fed, or one of their proxies. Has the US finally flicked up that they need to do something about their gold reserves when China for example is likely to have something in the region of 30-40,000 tons in reserve? Too little and far too late if you ask me.
How would it look if the BRICS countries called for a show of hands or Russia and China decided to revalue their reserves by declaring a substantial buy price for physical gold and then, gold-backed their national currencies at the same time?
Trump has just declared a trade war on the entire planet and is busy weaponising the dollar even more fiercely than any previous admin. Sooner or later the BRICS juggernaut will have had enough and this could be their next strategy.
None of these countries desire reserve currency status for their national currencies because of the Triffin Paradox - who could blame them? For this reason, I predict that King Dollar will be the last major national reserve currency.
The new instrument will be slowly phased in by the BRICS - I expect with a trial by only 2-3 of the current 20 members of the bloc. It will be a hard-baked trade-only instrument - possibly labelled the UNIT. It won't be a national currency. Most of the trade will continue in their national currencies, bilaterally, and with trade swaps, with only the balancing conducted in the new trade-only instrument.
The US chose to weaponise their currency and they will eventually pay the piper. Trade wars, sanctions and now the word 'tariff' becoming Trump's favourite word, will only hasten the de-dollarisation process.
Hold on to your hats, 2025 will be a wild ride
Colin Maxwell
Good comment Colin, I agree. Some might say that the UK central bank is just as much involved as the US Fed in terms of betting against gold. The UK bet against gold during ‘Browns Bottom’ when gold was sold and generated a low point for the price. Although maybe they have bought more since then? I suspect the US is repatriating gold as they want to be prepared for the 'de-dollarisation process'.
The term "Brown's Bottom" refers to the sale of approximately half of the United Kingdom's gold reserves between 1999 and 2002, initiated by then-Chancellor Gordon Brown. The UK sold 395 tonnes of gold at an average price of $275 per ounce, raising about $3.5 billion.
maybe the big three are now positioned for explosive upside and are helping that occur,
People think their biggest risk is if ETF holders claim the underlying physical gold (which the conspiracy realists say doesn't exist because of rehypothecation). But if you read the T&C of the GLD ETF, I think you will find that they don't have to give you physical on demand. They can give you the fiat equivalent and you have no choice but to accept.
probably not ETF but if you have futures contract at CME
Yes, a futures holder on the CME can demand physical delivery of the underlying commodity if they hold their position until the contract expiration date, although most traders choose to offset their positions before reaching that point, and only a small percentage of contracts actually result in physical delivery; the option to take physical delivery is what helps ensure the futures price closely tracks the spot price of the commodity
If the paper gold market is much much bigger then physical then that does question the ability of futures exchanges to deliver, which would cause physical prices to trade much higher then paper.
It maybe a good time to buy a leaky boat
Once more for emphasis re the dodginess that is associated with some precious metals ETF's
https://jj745.substack.com/p/theres-a-hole-in-the-bucket-dear
I will end this recap up by saying the facility of borrowing SLV shares allows the short side to borrow a form of synthetic silver that literally floods the market with supply at will. There is however, one hypothetical hitch: borrowed shares sold short increase the supply of SLV shares held by SLV investors without creating new shares supported by physical silver.
[T]he short interest of 50 million has synthetically increased the supply of silver 10% to 550 million without creating 50 million new shares backed by 50 million troy ounces of physical silver. Otherwise said, there are 50 million new longs thinking they’re holding an asset-backed ETF for which no silver has been acquired to support it.
I’m pretty sure all this has been considered by the custodians and BlackRock, and that appropriate language exists in the D docs to allow unlimited hypothecation via borrowed shares (or naked shorting). Otherwise, some hotshot from Vanderbilt, like my daughter, would be filing a class action suit for fraud. And this is the kind of thing where the barn door can’t be closed after the fact. If I were correct and millions of investors lost money because of misrepresentation … well you get the point.
ETFs are shares listed on stock exchanges, but they are, by law, physically backed by underlying assets. Therefore, the practice of borrowing and shorting ETFs is subtly different from shorting stocks, naked or borrowed. So, iShares must have accounted for this, or they might be liable for holding fewer ounces than the owners of the shares have a right to expect.
At any rate for the reader’s benefit it is quite possible 10% of the SLV shares you hold are not backed by silver. They are quite possibly backed by nothing or worse, the opposite of nothing, a short sale."
As of yesterday's short report, it's now 13% of SLV shares that are not backed by silver.
Interesting to see the amount of law breaking going on, and the justice systems' responses to DOGE's actions. Erosion of the US's legal checks and balances system is fascinating to watch.
Also fascinating to see Musk in the Oval Office speaking instead of Trump while Trump sits looking not much of anything.
Very strange times.
keep both eyes open.....
Feb 13, 2025 The Joe Rogan Experience
Mike Benz is a former official with the U.S. Department of State and current Executive Director of the Foundation For Freedom Online, is a free speech watchdog organization dedicated to restoring the promise of a free and open Internet. http://www.foundationforfreedomonline...
click below...
If physical demand ever overwhelms the bullion bank supplies then anyone holding 'paper' will probably be disappointed. ETF/ other paper holders are likely to be cash settled at the final price when these future markets are shut down. The real price for physical is likely to be substantially higher.
I guess inflation isn't resting just yet.
Some of the increase could possibly be put down to the lower NZ$
Please find attached material increase notification from our suppliers.
The price increase for electro galvanised sheet, galvanised sheet, mild steel, stainless steel and corten steel is between 5-7%.
The price increase for aluminium sheet is 15%.
Luxo and the Wingnuts (good band name) have been upstaged by Hong Kong, which has officially recognized Bitcoin and Ethereum as valid proof of wealth for its New Capital Investment Entrant Scheme (CIES), a visa program targeting wealthy migrants. Applicants can use Bitcoin and Ethereum holdings to prove the required net worth of HKD30 million (approximately USD3.8 million) for the investment visa. A chartered public accountant must sign off on a valuation report to validate the cryptocurrency holdings.
https://www.coindesk.com/policy/2025/02/11/hong-kong-confirms-eth-and-b…
a key takeout is that the increase is less then inflation year on year, and population growth, ie we are going backwards
there are no signs of Growth Growth Growth not even green shoots (when did we last think they where around? eCONomists and Spruikers have tried that one too many times now)
not even signs that the ground is wet and perhaps green shoots might appear.
its a never ending economic drought.
look I am not a total DMG but if the current NAct don't do more then verbally repeat the growth mantra nothing is going to happen, we need structural reform to replace the housing Ponzi credit creation engine, you guys dam well know this so get on with it.
performing an infrastucture investment parade in front of the masses is not bread and circus, we all know , even with RMA reform and fast track it will take ages to get these projects started, and the heavy equipment back from aussie (where it went as your last project finished).
we are going backwards
Parties don't last forever.
The problem is, we don't know what the world's going to look like in 5,10, or 20 years.
If I was rolling the dice, we probably need to go hard towards a more austere material existence, but with a higher minimum standard of living. Fairly protectionist, with re-shoring of most of our crucial supply.
The world should be living prosperously in peace, but it's not looking that way and we should get in front of it rather than make knee jerk decisions off the back foot
People will live more digitally engaged / enabled lives as its simply cheaper then physical travel and interactions.
We already see this with reluctance to move from WFH.
Younger people no longer need to attend Uni physically, the lectures are all on video and can be streamed later if you miss them
None of this increases GDP.
They can only spend if there spending is paid for, I have noticed that my oldest is more restrained now she has a real job, at minimum pay and knows the value to money, which is really, "how long you have to slave to make $1,800... after TAX!"
She has even suggested to me that Uni students people should pay no tax as they are not retired , not use benefits, rarely need health services and that they now also pay for their own Uni Education. While I do not frame her as an ACT Voter, if the hat fits.... you can tell she is doing Law...
Imagine if the young of NZ decide the way forward is Users pays, as they are not using much !
insert https://en.wikipedia.org/wiki/Side_Eyeing_Chloe meme here
Chloes cousin
Unless the world goes bang, it'll get cheaper.
Anyone who bought low equity at peak will be sad.
As is anyone who kept topping up the mortgage.
I got 2.8 till later next year and in the duration I've been doing a disappearing act.
If I had an EV and a new Bach I'd feel a bit silly.
Aussie Outright Home Ownership 1995 vs 2020:
35-44: 26.5% vs 5.4%
45-54: 48.3% vs 15.2%
55-64: 69.5% vs 36.1%
Imagine if you could switch those percentages so 2025 was 1995.
With that level of debt freedom, much more cash would be spent into the economy or used productively instead of going to the bank.
Some people go to the speedway for the crashes, I am not going to judge you......
Pa1nter - auctions are also a great way of moving a property with work done not compliant, no BC etc etc
Ponsonby style (brand new bathroom but nothing on council records....)
if you got lucky as a developer the records do not even show where the original toilet actually was, so the rest was "maintenance" of old pipework.... that now looks brand new.
I do not recall the exact original placement of that shitter, your honour.....
You will be able to keep track of it here.
Yesterday, we were read by 40,515 unique readers. They read 113,934 pages of content in 69,733 sessions. Clearly many readers came back more than once.
Yesterday we had 462 comments from 109 different people.
I will be happy to share this sort of data after March 1 - if you ask.
Maccy B shows that Aussie real per capita household disposable income has collapsed by around 8% from its Q2 2022 peak, the most significant decline in recorded history.
If you think that's bad, real wages have collapsed back to levels last seen in 2009. It is estimated that it will take until 2040 to return to the peak reached in 2020.
It is increasing mortgage costs are the main reason living costs have grown well above CPI inflation.
This is what you call the trade offs of Ponzinomics.
https://www.macrobusiness.com.au/2025/02/the-three-drivers-of-australia…
It will never 'regain the peak'.
That's the whole point; we're traversing the peak now.
There were always physical limits to growth, and you could always track the amount of stuff being done, by tracking energy-in, adjusted for efficiencies (which have hard limits too). Globally, it is looking more and more like we peaked in 2018 and are about 3% off that pace already. The fudge is in deferred maintenance, and unresolvable debt.
That gap will only get wider - although there is an echelon of wide-eyed dreamers who think we can run the whole thing on solar by next Thursday...
Cities will keep growing, and living space will be more scarce for it's occupants.
Unlike a village, where the fisherman trades on relatively equal terms with the ironmonger, cities are designed as traps for the new entrants to chase crumbs dropped by the incumbents.
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