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
Both Kiwibank and the Co-operative bank have cut fixed rates today and the new short Kiwibank rates are market leading. Details here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Kiwibank and the Co-op Bank have cut TD rates. ICBC cut and Xceda has trimmed their rates too. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
MUCH TO CHOOSE FROM
Buyers are spoiled for choice as the housing market gears up for its busiest time of the year. The housing market has started 2025 with stock levels at a 10 year high.
OUT OF DATE?
According to the RBNZ, the basket of goods and services Statistics NZ uses to measure inflation is years out of date and may not be accurate.
LACKING SPARK
There was no improvement for Spark in its latest financials, as recession takes big bites out of revenues and profit. That profit dropped -78%.
GAINING MOMENTUM
Fonterra said its earnings are currently tracking well, and will come in at the upper end of its previously indicated 40-60 cents per share. It half year results are to announced on March 20 and it expects to base its interim dividend on that. They also noted that good farming conditions are seeing higher than usual milk production even as their season winds down.
NZX UPDATE - A $1 BLN DUMP FOR SPARK
The NZX50 was down -0.6% in 3pm trade, down -1.6% over the past week, but down -1.9% over the past month. There were 38 gainers today, led by NZX (+4.4%), Fonterra (+3.1%), Fletcher (+3.1%), and a2Milk (+2.1%). Going the other way, there were 48 decliners led by Spark (-20.0% which is more than a -$1 bln dump), Synlait (-3.2%), SkyTV (-3.1%), and Oceania (-2.6%). Market heavyweight F&P Healthcare is up +0.7% so far today.
DON'T TELL TRUMP
The January merchandise trade deficit halved to -$487 mln from $1.064 bln last year and over -$2 bln in January 2023. Rising rural exports are getting the credit. In January we ran a much recovered surplus with China, and about halved the deficit with Korea. For the year to January our trade surplus with China reduced, our surplus with the US trebled, and we turned a deficit with Australia into a worthwhile surplus. Our deficit with Japan fell by -70% but our deficit with Korea rose by +30%.
HEADY EXPORT SUCCESS
Dairy exports are rising, up more than +8% in the year to January. The dairy payout is at record levels. And the dairy companies, even Synlait, are all doing very well (see Fonterra above). We all know that there are many multi-millionaire dairy farmers. So, why are dairy farms in Canterbury being bought up and closed down? Basically because there are more profitable business opportunities for the land. You may be surprised to know how many multi-millionaires the kiwifruit industry has grown. In Canterbury the land use change is to horticulture, including apples. The NZ Super Fund is funding this shift. Listed T&G Global (TGG) has huge demand for its new JOLI apple brand, and the returns dwarf dairy. And that is driving fast land use change in some areas. You can see the fast rise of horticulture in our export data. In the year to January, fruit exports rose +36%, are now almost double our wine exports and about to push logs out to claim third spot in the export league table.
JAPAN FACES AN INFLATION BATTLE
In Japan, they finally have inflation, real inflation this time. It climbed to 4.0% in January from 3.6% in the prior month, which is their highest reading since January 2023. Food prices rose at the steepest pace in 15 months up 7.8%, with fresh vegetables and fresh food contributing the most to the upturn. No doubt their central bank will react to this sharper than expected move.
SWAP RATES HOLD AGAIN
Wholesale swap rates are likely to be unchanged again, but keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged at 3.77% on Thursday. The Australian 10 year bond yield is up +1 bp at 4.57%. The China 10 year bond rate is up +3 bps at 1.73%. The NZ Government 10 year bond rate is down -2 bps at 4.72% while today's RBNZ fix was at 4.66% and down -4 bps. The UST 10yr yield is now just on 4.50% and down -2 bps from yesterday. Their 2yr is up +11 bp at 4.27%, so that positive curve is now flatter at +23 bps.
EQUITIES MOSTLY LOWER AGAIN
The NZX50 is down -0.4% in late Friday trade. And the ASX200 is down -0.6% in afternoon trade. Tokyo is up +0.2% in early Friday trade. Hong Kong is back up +1.6%, but Shanghai is down -0.3% its open. Singapore has opened down -0.2%. Wall Street was down -0.4% on the S&P500 in Thursday trade.
OIL ON HOLD
The oil price is up +50 USc from yesterday, now just under US$72.50/bbl in the US, and at under US$76.50/bbl for the international Brent price.
CARBON PRICE FIRMS
The carbon price is still within its range, and today is up +50c at back at NZ$63/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 down -US$7 from this time yesterday, now at US$2929/oz.
NZD FIRMS AGAIN
The Kiwi dollar has risen +60 bps from this time yesterday, now at 57.6 USc. Against the Aussie we are up +10 bps at 90.1 AUc. Against the euro we are up +20 bps at 54.9 euro cents. This all means the TWI-5 is just over 67.5 and up +30 bps.
BITCOIN FIRMS AGAIN
The bitcoin price is up +1.6% from this time yesterday, now at US$98,363. Volatility of the past 24 hours has still been modest at just on +/- 1.0%.
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90 Comments
Right now in the USA
Mortgage rates
Product Interest Rate APR
30-Year Fixed Rate 6.92% 6.97%
20-Year Fixed Rate 6.63% 6.69%
15-Year Fixed Rate 6.20% 6.28%
10-Year Fixed Rate 6.03% 6.11%
I am not sure we are going to go much lower if international wholesale money can fund this market. there is a bit of movement as at 230bps net interest margin banks can drop 25 just to equal aussie parents and perhaps
even another 25 to attract quality book
If these rates are reasonable is NZ Property still overpriced?
US property is rolling over as many have borrowed at 2.99 for current property and now cannot afford to transfer to another property.....
as the finance rate is double (would imply 50% price drops to achieve same cashflow)
Anywho i think US may be in recession soon, Biden juiced the economy just like Robbo, 2 years from now trump be in recession
Then we will see lower rates, but global recession not great for NZ either
Oh but the Trump admin stopped worrying about the US dollar and its Reserve Currency and revalued their gold holding, what would that bring at present gold value..maybe 795 billion. Trump I guess will swap it for his Bitcoin holdings that he took as contributions and sail off into the Mar a Lago sunset.
I think US debt is increasing at about 1 triilion every 3 months so your gold revalue would hold things for 71 days...
Does not exactly prove gold at 3k a an ounce is going to protect us, unless it becomes 30k an ounce....
then it would buy another 7.5 years of lending at 300k perhaps a lifetime....
they can always devalue usd / gold as long as people believe they have it
with BTC there is max 21 mil
no audit required you can see what wallet holds what
Methinks, IT GUY, you don't understand how very different the US mortgage market is to ours.
For example, a 30-year US mortgage can be broken for not much more than 3-months of the interest banks lose if you refinance with another mortgage lender.
You are comparing apples with oranges.
(God, I hate having to repost this ... over, and over again !!)
tradingeconomics.com:
The annual inflation rate in Japan climbed to 4.0% in January 2025 from 3.6% in the prior month, marking the highest reading since January 2023
Tick, tick, tick... same old, same old, inflation monster coming to get you. I was saying two days ago inflation will be 4-5% in 12 months. Well Japan is already at 4%.
You should all be terrified
That is pretty terrifying, along with the UK. Their CPI went up at the exact same time the BoE put interest rates down.
Commenting on the UK CPI announcement, Michael Field, chief equity strategist at Morningstar, says the unexpectedly high inflation may give the Bank of England pause for thought on future interest rate cuts, with the current level far in excess of its 2% targeted level.
Japan's inflation is up to 4% due to rice prices up 70% and fresh food prices up 20%.
Yes. Japanese rice prices are off the hook. Imagine rice has a relatively high weighting. Incidentally, Vietnam has a surplus of Japonica rice and is being discounted in their market (Japonica is sold at higher prices domestically, yet still much cheaper than Japan). It's not easy to export the surplus rice as food security policies make it difficult to move to foreign markets quickly.
The average price of Japan's 2024 rice crop sold to wholesalers hit a record high for the fifth consecutive month in January 2025. The price surged to 25,927 yen per 60 kilograms of brown rice, marking a 69% increase from the previous year
Surely the Spark CEO has to go. Ryman, Warehouse, Fletcher Building, SkyCity have all changed CEO after putting up similar returns.
Goodness there's a severe lack of talent in NZ's public company boardrooms. One day it's Air NZ and AIA blaming each other for their problems and the next it's Spark laying an absolute turd. Mind-boggling stuff.
What has a man got to do to get one of these cushy CEO/senior leadership jobs where no matter how badly you perform you just get to collect mad cashola and then when you either fall on your sword or get fired (after an absurdly long time) you then somehow still get to fall into another great role.
Reference 'Slick Nick' from TWG who managed to fleece the shareholders for millions each year while destroying what was once a great company.
I could happily wreck shareholder value for a year or two, make millions, and then clear off for a quiet life living off my ill-gotten gains.
Sh*t often rolls uphill in the murky world of C-suite.
Remember John Thain, the guy who ran Merill Lynch in its final years and after its sale to BofA. He had a whole bunch of lawsuits for misappropriating funds in his final weeks. At one point, he was called out by then-President Obama for misusing taxpayer-funded bailouts to renovate his "executive bathroom".
He walked out of BofA-ML unscathed and shortly after got an $8 million a year plus bonuses stint as CEO of another financial services company. He has been on Uber's board since 2017.
First of all you need to come up with some euphemisms for your expected performance rather than being honest. Or at least talk in positive terms regarding what goals you will surpass, even if they are impossible to achieve (or measure).
Next, hook into the old boys network (or the old girls network). If you didn't go to the right school then try joining a rugby/cricket/golf club.
Lastly, create a plausible (but entirely false) CV. Like credit references, they are seldom checked. Include overseas postings for extra difficulty in case someone tries to follow up. Fake it 'til you make it.
Agree. Justine Smyth is Chair of the Spark Board and Jolie Hodson is the CEO: Smyth has a bunch of Accounting qualifications and Hodson doen't have any academic qualifications...she appears to have no formal qualifications at all but has come up through the ranks. Hodson's vision for the company appears to be on the woke side i.e.building a 'team' and giving women opportunities. So,perhaps reluctant to 'clean out' the team.
What you have to remember is the tax take on a lot of carbon credit sales is at 39% tax. Then most of that money remaining gets used in the local economy. Basically the remaining profits are used to prop up the rural side of business's as 4000+ rural farming operations now rely on carbon to pay for such things as fertilizer . Don't forget this country is nothing without imported fertilizer.
Most advanced economies have subsidized fert. not to mention subsidized production.
Aussie having a bit of a laugh at the 'uncreative' NZ tourism marketing refresh. To be honest, the campaign hasn't changed much for 30 years. A few copy tweaks; a few more haunting Maori wind instrument audio clips; but the wide pan shots remain the same. Agency sends the invoice. Same old.
New Zealand has long fancied itself as a uniquely beautiful destination located in one of the world’s most enviable environmental settings, with everything from hiking and biking to kayaking with whales in the great beyond, road-tripping through sky-kissed mountains to lounging on its sun-dappled beaches.
The scenery is impressive enough, in a Lord of the Rings kind of way, although it is somewhat incongruously set against urban centres increasingly characterised by creaking infrastructure, graffitied storefronts and lolling street toughs.
Certainly, fewer outsiders are being enticed by New Zealand’s lanscapes than was the case before Covid. That’s probably not surprising, given the Labour-led government of Jacinda Ardern shut the country down from the outside world for a couple of years, effectively declaring ‘Everyone must stay!’.
https://www.spectator.com.au/2025/02/new-zealands-cringeworthy-new-tour…
Think the natural scenery still holds its own. Except it is neither as unique nor exceptional as some are wont to proclaim. Like most things if it is good enough that should speak for itself without a whole lot of caterwauling grandstanding by advertisers only interested in a commission.
When you say chip, are you talking TSMC type industry?
I've read that the main thing that needs is fresh water. Like NZ has in abundance (so long as we stop selling it overseas at 1 cent per billion cubic metres).
Maybe he might like to start up a branch here. Fishing trips can then be tax deductible visits to the NZ division. Christopher Luxon might be interested when it's pointed out to this that this is what growth actually looks like.
The Chinese middle class are now down 50% on their local pooperty investments, its no wonder then not coming to see our Greeness....
They just doing cheap Thailand and Asian beach trips now. NZ is not a cheap destination for most of the world, its a long haul flight aspirational destination, you can always do it later, and do a cheaper trip now....
being at the end of the earth is a blessing and a curse.
NZ is not a cheap destination for most of the world
Let's see if Erica Stanford's exploitation visa... oops I mean essential skills visa helps with that.
Expect nothing to change as the high cost of crammed infrastructure continues to bite local businesses in our tourism centres.
Funny HM, sorry for replying twice, but can't help but agree. As I am sure I have stated on this forum I believe that theSth Pacific will be the perfect place for the next proxy war between the powers to be. Isolated from major populations and a perfect testing ground for what ever they want to do.
Just look at USA now throwing pretty much the whole of Europe under the train'
The markets know best. Apparently.
Guzman Gomez - half yr profit $7.3m, total market cap $4.6bn
Retail Food Group - half year profit $7.3m, total market cap $131m
China Money Supply (M1) just increased 67% in a month. Don't believe me? Look for yourself.
https://www.tradingview.com/symbols/ECONOMICS-CNM1/
From what I have seen they seem to be having a Minsky moment...
A Minsky moment is the onset of a market collapse brought on by speculative activity that defines an unsustainable bullish period. Minsky moments generally occur after a long period of growth, which ultimately leads to overleveraging once prices stop rising.6 Mar 2024
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $361,466!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $46,349!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $558,625!*
or there are term deposits....
No. The NZD moves - short term - in mysterious ways. In the medium / long term long term, it is predictable, and slowly falling.
In the short term, dairy prices, seem to be a factor, but an unreliable one.
But to be honest, its movements - in the short term - show no solid correlation with anything much I've found.
Longer term? Well - the writing is on the wall.
. Likewise this recession hasn’t made my wage go down (yet at least), but my wage isn’t as good as it would be without the recession.
Depends what benchmark you use to measure your wages. Likely the Peso.
People need to get their heads around this. Good topic for discussion at the water cooler and the BBQs.
"...but it will probably be lower than otherwise."
Sure. Prove it. Better minds have tried and couldn't.
The main factor is NZ's structurally screwed up economy that constantly borrows from overseas to pay for 'stuff' that either a) we feel we are entitled too, but can't afford, or b) make local stuff so expensive (e.g. houses) that means we have 'un-registered inflation' we need overseas borrowing to fill the gap.
(Sorry for the brevity. I could write a very long post on this - but why bother - noone would read it.)
Very provocative from China:
https://www.theguardian.com/australia-news/2025/feb/21/commercial-fligh…
I always thought a Taiwan invasion was unlikely. I am starting to think China might be feeling a bit emboldened, especially with a sickly economy
Yep
so while I don’t take back the idea that Trump’s peace plan will save many lives in the short term (I think it definitely will), the wider strategic ramifications are quite scary, and perhaps in the medium term many more lives will be lost
Perhaps….
of course, it might so happen that the USA yet again cares much more about white people losing their lives than people of colour, and that they once again are very happy to wage war and kill many people in Asia (if China invades Taiwan)
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