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
TSB cut fixed rates today, especially its one year fixed rate to 5.35% and a market leading level. Details here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
TSB also cut TD rates for terms 90 days to 18 months. ICBC cut its TD rates recently too. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
POPULATION EXPANDS SLOWER, AGES
Our population rose to 5,356,700 as at December 2024, according to a Stats NZ release. That is a rise of +48,500, of which +21,400 was from a natural births/deaths net increase, and +27,100 frim migration. The total annual growth is equivalent to adding one of Whanganui, or Upper Hutt, or Timaru, or Queenstown. Or at least that is what StatsNZ claims based on changes from the 2018 Census. They haven't yet started using the 2023 Census base. We should also note that while the 65+ aged cohort is holding, the data shows continuing falls for most younger groups. So the median age is at a record high of 38.2 years,
MUCH OLDER MOTHERS
The same updated population data shows that the median age of women giving birth reached 31.5 years in 2024. That is its highest since records began in 1962. The lowest median age recorded was 24.8 years in 1972. By 1994, the median age had risen to 28.5 years.
DAIRY AUCTION PROSPECTS
There is another full dairy auction tonight. The futures market suggests the WMP price will slip slightly, having passed its peak two weeks ago. But the SMP price should rise again according the futures pricing, and back up to its November level, and its highest since October 2023. However, a firming NZD will tend to take the top off any USD gains.
RUNNING LATE
For readers looking for our report of the February results from REINZ, you should know we haven't received any indication about when they will arrive. (If they are weak, releasing them tomorrow while we are all diverted by the RBNZ rate cut might take the glare off them.) It is usual to get them about the 15th. Last year, the January 2024 results were released on February 14, 2024. Update: An hour after we posted this, the REINZ said they will be releasing these results at 9am tomorrow (Wednesday).
VEHICLE LOANS CAUSE A HEARTLAND STUMBLE
A weak NZ economy and more proactive and prescriptive approach to loan arrears (calling in the debt collectors) leads to an almost $50m impairment for Heartland. It's shares tanked about -15% on the update to shareholders.
STILL HOPING
Retailers are actually feeling confident about their businesses’ staying power in 2025, despite not meeting sales targets over the 2024 Christmas season. With a tough year behind them, almost half of retailers are taking a cautious approach to forecasting what lies ahead. Until consumers feel confident about their job prospects, and inflation and interest rates ease, they will continue to see discretionary spending limited.
NZX UPDATE
The NZX50 is down -0.1% in 3pm trade, up +1.1% over the past week, but down -0.3% over the past month. There were 40 gainers today, led by Synlait (+10.9%), a2 Milk (+2.8%), Ryman (+2.5%) and Infratil (+2.0%). There are 42 decliners led by Heartland (-13.9%), Freightways (-2.6%), Oceania (-2.0%), and Spark (-2.0%).
WHAT HOUSEHOLDS THINK
A survey conducted for the RBNZ shows that the current perception of inflation has fallen back to 5.0% from 6.0% in November, but that the one-year ahead expectation of inflation has risen from 3.0% to 4.0%. Expectations of inflation over two to five years hasn't shifted in this survey. Looking more broadly at household expectations, the chances on not making a rent or mortgage payment have not changed and remain very low, while the chances of losing a job, or finding a new one, are also stable. More here.
MORE RENEWABLES CAPACITY
Meridian Energy has received consent from the Environment Court for the new Mt Munro Wind Farm, south of Eketāhuna. When ready, the 90 megawatt wind farm will produce around 300 GWh per year, which Meridian says is enough to power 42,000 homes with renewable energy.
NEW DAIRY SUSTAINABILITY INCENTIVES
Fonterra said it will pay dairy farmers more if they achieve their climate targets. The new incentives will be funded through separate agreements with Mars and Nestlé, who have been working with Fonterra to make progress towards their individual sustainability goals by supporting farmers to reduce emissions. This includes a new Co-op Difference Payment of between 1 and 5 cents/kgMS for qualifying farmers. Plus there are funding incentives to improve emissions efficiency, and based on last season’s achievements, 87% of farmers would’ve been eligible. In addition, there is a contestable 10-25 cents per kgMS Emissions Incentive payment for farmers who achieve the Co-operative Difference and have one of the lowest emissions footprints in the Co-op. That could be paid to about 350 dairy farmers.
THE LOWEST COST PRODUCER
Rabobank has reviewed the main dairy exporting countries and found there has been a structural uplift in global dairy production costs. It is not only us. But they also found that New Zealand was still the lowest-cost producer in 2024. Even so, only higher farm-gate prices squares the circle, although it may be easier in New Zealand. Cost and profitability pressures in rival countries will undermine production prospects.
EV TECH OPENS UP FLEXIBILITY
Electric vehicle batteries bring energy flexibility opportunities, including supporting the grid, and now the NZ government wants to enable the technology. Meanwhile, Chargenet said that although EV sales rose +11% in 2024, demand for its charging network was up +29%, and on some days they delivered over 3000 user sessions.
EYES ON THE RBA
Join us at 4:30pm when we will cover the RBA's policy rate review announcement. Markets expect a -25 bps rate cut to 4.10%. And the self-interested are cheering them on. It isn't certain however. Update: Here is the decision.
SWAP RATES PROBABLY FIRMED
Wholesale swap rates are likely to be up very slightly, 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 Monday at 3.81%. The Australian 10 year bond yield is up +1 bp at 4.50%. The China 10 year bond rate is up +3 bps at 1.71%. The NZ Government 10 year bond rate is up +2 bps at 4.70% while today's RBNZ fix was at 4.66% and up +5 bps. The UST 10yr yield is now just on 4.50% and up +1 bp from yesterday. Their 2yr is also up +1 bps at 4.27%, so that positive curve is still at +24 bps.
EQUITIES MIXED
The NZX50 is down -0.1% in late Tuesday trade. And the ASX200 is down -0.5% in afternoon trade. Tokyo is up +0.4% in early Tuesday trade. Hong Kong is up +0.8%, but Shanghai is down -0.2% its open. Singapore has opened down -0.1%. Wall Street was closed for Monday trade, and the futures market suggests it will open tomorrow up +0.5% - and that would be a new all-time record high.
OIL MARGINALLY FIRMER
The oil price is up +50 USc from yesterday, now just on US$71/bbl in the US, and at over US$75/bbl for the international Brent price.
CARBON PRICE DIPS
The carbon price is still within its range, but today is down -50c at NZ$62.50/NZU. The next release of units at the official auction is on March 19, 2025. But that auction's floor price is $68/NZU, so it is heading for a failure. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD HOLDS
In early Asian trade, gold is virtually unchanged from this time yesterday, still at US$2895/oz.
NZD SOFTISH
The Kiwi dollar has fallen -40 bps from this time yesterday, now at 57.1 USc. Against the Aussie we are holding at 90.1 AUc. Against the euro we are down -10 bps at 54.6 euro cents. This all means the TWI-5 is just under 67.2 and down -20 bps.
BITCOIN LITTLE-CHANGED
The bitcoin price is down -0.2% from this time yesterday, now at US$96,331. Volatility of the past 24 hours has still been low at just on +/- 0.9%.
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67 Comments
This isn’t far from the theme of ‘The 4th turning’ - of which we are currently at the peak of (as the boomer generation lose control of society after 30-40 years of domination). Boomers are the dark side personality traits of the greatest generation (at least the theory suggests).
It's possible lead poisoning made things worse too. It has been linked to higher levels of psychopathy.
I'd put more down to a societal/cultural rise in individualism.
Back in the day if you were a knob you either had to toe the line, or get ostracized from the group. These days it's just who we are.
Ha, I'll write whatever I like. Anyway, I'm simply reporting what was in the news. The Man3 was right about buying in Christchurch it seems. And 59 mortgagee sales is not all that high.
Also, I analyzed a lot of those mortgagee sales the other day and was surprised by how many had been bought years ago for very low prices. One was bought for about 120K in 2019. What's happening there? Surely a mortgage like that could be serviced. Cheaper than rent.
Quite a few people are buying homes for the first time. It's just a fact.
Source of your numbers?
IIRC the average income in 1972 was well under half that, and the marginal tax rate was 50% (on any earnings above ~$100/wk)
https://www.nzherald.co.nz/nz/nostalgia-used-to-be-better/TUFJAQPUOLDFM….
PS I started fulltime work in 1972, laboratory technician on $1/hr
$11k income in 1972. I would say not too many. I remember in '73 the national wage I paid our wood working Joiners was in the $2 hr range--that's only about $5,000 year tops for someone in the Trades, but they could still buy an Auckland house at 3 x's annual income or less.
American median income was 11k:
Tomorrow FTX will start USD16 billion in repayments on creditors (customers). That's potentially a lot of liquidity that will be entering the market, but it won't be all at once.
Rat poison owners will be repaid at USD18K - same price as in 2022, but a fair distance from market price today. Those with ETH will get USD2500, which is similar to today's market price.
https://www.msn.com/en-us/money/savingandinvesting/ftt-price-forecast-f…
The US got a giant boost in their population today as well. DOGE got into Social Security Records and found they had nearly 400 million on file.Even subtracting the 16 million over the age of 110 you still end up about 40 Million more than the 345 million the Census Bureau reports. Guess those value Inspector Generals which each Department (used to have!) has just missed this one. https://www.dailymail.co.uk/news/article-14406439/doge-social-security-fraud-dead-people-vampires.html
Yes but it has the greatest headlines, and because it sometimes has markets news its not firewalled by the major banks. In with the share market market news it still has lots of stories about page 3 girls with ample curves, hence its still staple reading for NZs male financial community.
like this one from today
Kelly Brook shows off her eye-popping curves in a busty bikini as she continues romantic holiday with husband Jeremy Parisi in the Caribbean https://www.dailymail.co.uk/tvshowbiz/article-14406615/Kelly-Brook-biki…
most people read it for the articles.
We will start with the source of the Daily Mail which is right wing. Secondly saying that millions of people are eligible for Social Security doesn't mean that they are collecting Social Security only that the system does not have a record of their death - something completely different. The usual tilting at windmills.
From a BBC article https://www.bbc.com/news/articles/cwyjz24ne85o
There is a 2023 report by the social security inspector general which identified about 19 million people born in 1920 or earlier who didn't have any death data on file - 44,000 of whom were still receiving social security benefits.
The report was triggered by calls to better maintain claimant records, after the Social Security Administration in 2021 estimated some 24,000 people received payments by the agency after death, amounting to almost $300m.
There were an estimated 101,000 people over 100 years old in 2024 across the US, according to the Pew Research Center, most of whom you would expect to be receiving social security, considering it covers retired people.
Hardly a grand conspiracy - just an inefficient bureaucracy.
EDIT spelling
in other renewable news Genesis just purchased the Leeston site (67MWp) FID expected by Q2 FY 26,fully operational by 27 bringing Canterbury Solar past 800 GWh.
https://www.genesisenergy.co.nz/about/news/genesis-secures-fourth-solar…
".....which Meridian says is enough to power 42,000 homes with renewable energy."
Are they saying that more houses than this will be powered by their plant when the wind is blowing and less when it isn't or is too strong?
With load growth and no more significant hydro being built, it just shows why thermal backup is required. Photovoltaic can coincide with wind generation at times. But the chickens come to roost in dry windless winter conditions.
Here’s a good watch (Oz housing market)
I have subscribed to the west report, i am sick of watching China stories to Tofu dreg construction and 50-80% collapse in apartment prices, perhaps i can now start watching Aussie crashing property pron.
https://www.youtube.com/watch?v=08Tplv1yf4g
CBA makes 10billion profit... westie rips them a new one.
CBA is trading 3.5 times book value and 26 time s future earnings, making it the most expensively valued bank IN THE WORLD.
What could possibly go wrong...
Maybe its time for a sneaky short.
Only higher farmgate prices squares the circle
Literally just read now in a book
It was a long and indirect journey from Euclid's geometry to Lindemann's proof, and it took more than 2000 years, but mathematicians finally got there [proving you can't square the circle].
Milei's response to the Libra Coin fiasco was impressive. From TV:
“I acted in good faith and took a hit,”
“Did the State lose money? No. Did Argentinians lose money? Maybe four or five at most. The vast majority of investors are Chinese and American.”
“I shared this the same way I’ve shared hundreds of things. My tweet came just three minutes after the coin was created because I’m passionate about these things and found out about it. These are volatility traders who knew what they were doing.” “[Hayden Davis] proposed creating a structure to finance entrepreneurs who, due to informality, lack funding options. When Libra became public, I helped spread the word,”
“It’s false that 44,000 people were affected—at most, it’s 5,000. The chances of there being Argentinians involved are very slim. These are highly specialized individuals in this type of financial instrument. Those who got involved knew the risks very well—they are volatility traders. This is a private matter between individuals, and they participated voluntarily,”
“I didn’t promote it, I shared it. I did it because I’m a die-hard technoptimist. Any initiative that improves financing for tech entrepreneurs interests me. I made no mistakes because I acted in good faith. But when I look at the political repercussions, I realize I have something to learn. I need to understand that after becoming president, I continued acting like the same Javier Milei as before. Unfortunately, this situation shows me that I need to raise my filters and not make myself so accessible.”
We had to take a show jumping horse down to the Waikato for full scans today, turns out they say very slight swelling in the hock and a joint below? (not my specialty) , Vet thinks its because the ground is so hard at the moment, while we have had a bit of rain, and grass is coming on slowly , hell the ground is hard.
We have a plan he will come right, but will need management going forward, he will come right.
its green just north of Auckland but the ground is rock hard.
I'm in Waikato at the moment and drove around the area a fair bit today. I don't recall it ever looking this dry. Paddocks are largely breft of stock and weeds are rife. Not the Waikato of my youth.
Heading back to Hawkes Bat tomorrow after over a week away, I'll be interested to see how our place is holding up. 32 degrees and 60%+ humidity there today, the stock won't be happy.
A massive number of Barfoot auctions are happening tomorrow, scheduled for the day of the OCR.
Barfoot's Tauranga auction today 7 of 7 all passed in, yet Stuff.co.nz did an article today saying the Tauranga market was red hot.
https://www.stuff.co.nz/nz-news/360583629/town-where-property-so-hot-it…
here is a recent one from my old stomping ground
https://rwmissionbay.co.nz/properties/sold-residential/auckland-city/gl…
My partner does call it shitty sierra but wow cv of 2.45, sold 4th Dec 2024 for 1.65 only 67.34% of CV
I suggest an old resident going to a home, does not care, built it new.... marginal seller sets the price.
That's only $2035 a sq m, down from $4,000 at the peak, oh my...
Its booming in Auckland
Tauranga has always had an older crowd passing away their final years by the sea, eating $15 meals at the local RSA...
My mom lived at the Mount, she called it a $10 town.... but inflation. None of her friends wanted to eat at decent cafes, all there money was tide up in their house.
Keeping their spare money safe in term deposits
its booming with boomers, with term deposits.... growth, growth, growth.
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