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
There are no changes to report today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Relatively minor changes, all cuts, we announced by Kiwibank, RSB, and Mutual Credit Finance today. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
MORE STOCK, LOWER SALES, LOWER PRICES
Barfoot & Thompson's sales numbers and median price both dropped in February as stock for sale hit a 14-year high. The median selling price through this dominant Auckland agency has declined for three consecutive months on the stock level surge.
ARREARS RISE
Mortgage arrears reached an 8-year high in February, Centrix says. According to them, 23,700 home loans are past due, a 6% year-on-year rise.
FEWER HOUSES TO BE BUILT
The annual value of building work consented was down $5.6 bln over two years. A total of 15,668 fewer new homes per year are now being consented compared to two years ago.
COMPARE BANKS
The RBNZ has updated its Dashboard data, and we have update our Key Bank Metrics tool, to December 2024. For example you can compare non-performing housing loans (G3), and many other similar metrics. We have also updated our bank leverage tables.
CLEAR, CONCISE & RELEVANT
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SLUMP DEEPENS
Non-residential building consents were lower too in January, In fact the floor area consented for buildings other than for housing was down -15.4% in the year to January.
NZX UPDATE
The NZX50 is down -0.9% today as at 3pm, up +1.0% in a week, but down -4.9% from the start of 2025. Spark, The Warehouse, Manawa Energy, and Freightways are top today's gainers. Gentrack, NZX, Vista, and Summerset lead the decliners.
MANY STILL WANT TO USE CASH
The Q1 update to the RBNZ survey on the use of cash by households continues to derank its importance. But the shift isn't fast.
THOSE WHO CAN PAY SHOULD. THOSE WHO CAN'T SHOULD STAY AWAY
Auckland's mayor is supporting congestion charges, among a range of other "practical measures" to ease traffic bottlenecks and improve productivity. That was one solution proposed by AT in their recently-released "white paper".
NO END IN SIGHT FOR POWER PRICE PRESSURES
Transpower reported very high electricity prices over the past week. "The average wholesale electricity spot price at Ōtāhuhu last week increased 42% to $343/MWh from $242/MWh the week prior. Wholesale prices at Ōtāhuhu peaked at $2372/MWh on Monday 24 February at 12:30pm after Tauhara geothermal plant was taken offline. There were several periods of inter-island energy and reserve price separation last week during the ongoing HVDC Pole 2 outage." This is the situation right now.
EYES ON THE NEXT GDT DAIRY AUCTION
There is another full dairy auction tomorrow morning (NZT). The derivatives market pricing today suggests the SMP price will change little from last week's Pulse event. But they are expecting more than a -2% fall in the WMP price. And the butter prices might fall -7% from the last full auction.
STORM WATCH
In Northern NSW and Southern Queensland, there are severe storm warnings in place for a major weather event, Cyclone Alfred.
MARGINAL GAIN, JUST BETTER THAN INFLATION
Australian retail trade was up marginally in January from December and the gain was about what was expected. Year on year it was up +4.1% and a similar rise top the past three months.
ONE & DONE ?
The RBA Minutes released today reviewed the case for a rate cut, one they made by reducing their cash rate target by -25 bps to 4.10%. But the tone of the reasoning suggests there won't be any more cuts until they have greater confidence that inflation will actually reduce to the middle of their target range. They seemed sceptical.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed today at the short end, 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 -3 bps at 3.76% on Monday. The Australian 10 year bond yield is down -9 bps at 4.29%. The China 10 year bond rate is down -4 bps at 1.75%. The NZ Government 10 year bond rate is down -7 bps at 4.54% while today's RBNZ fix was at 4.50% and down just -1 bp. The UST 10yr yield is now just on 4.12% and down -12 bps from yesterday. Their 2yr is unchanged at 3.91% and down -9 bps, so that positive curve is still at +22 bps.
EQUITIES ALL TURN LOWER
The NZX50 is down -1.1% in late Tuesday trade. The ASX200 is down -1.0% in afternoon trade. Tokyo is down -2.2% in early Tuesday trade. Hong Kong is down -1.6%, and Shanghai is down -0.2% its open. Singapore has opened down -0.3%. Wall Street ended its Monday session down a sharp and pessimistic -1.8%..
OIL FALLS
The oil price is down -US$2.50, now just on US$68/bbl in the US, and on US$71/bbl for the international Brent price, all on expectations a coming recession will limit demand.
CARBON PRICE DIPS IN RANGE
The carbon price is still within its range, but down -50 bps at NZ$62.50/NZU on extended light volumes. 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 FIRMS AGAIN
In early Asian trade, gold is up +US$17, now at US$2888/oz.
NZD HOLDS
The Kiwi dollar has held at 56.1 USc. Against the Aussie we are up +30 bps at 90.4 AUc. Against the euro we are down -30 bps at 53.5 euro cents. This all means the TWI-5 is just over 66 and little-changed from yesterday.
BITCOIN SINKS
The bitcoin price is down more than -10% from this time yesterday, now at US$83,350. The 'strategic reserve' fillip was very short lived. Volatility of the past 24 hours has again been extreme at just on +/- 5.9%.
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28 Comments
Trump tells Zelenskyy to sling his hook
He's paused US military aid to Ukraine once again. I wonder who he wants dirt on this time?
Things in the rear view mirror are a lot closer than they seem. Continental Europeans waking up to that fact re the unwelcome red regime on their north east frontier even though it has been sitting there for just over 100 years.
Trump has also confirmed he will go ahead with 25% tariffs on Mexico and Canada, and the additional 10% tariff (= total 20%) on China, that's why the markets are down.
Excellent, can’t wait to see those inflationary tariffs!
Bitcoin now at US$863,350 !
I really should pay closer attention - or should that be $86,350?
duh! s/b US$83,350
Will be profit taking after the strategic reserve filip. Rest of the top 5 coins also down. That's the price of becoming part of tradfi
duh! s/b US$83,350
You need to remember that 70K is still in play. And below that, it's clean air.
Bitcoin and the broader crypto markets are the only true free markets left. Ratty's price tells the world in real time what the global community thinks about the current state of fiat liquidity. Bitcoin is screaming that a liquidity crisis is nigh, even though the US stock market indices are still near ATHs.
It appears to me that the 2 year through 10 year swaps have hit a floor. Don’t think I’d say the same just yet for the 1 year swap though. This gives the sense we could be quite close to seeing the bottom for this round of rate drops - unless of course the economy really deteriorates from here (but how much worse could it possibly get?)
Does not necessarily need deteriorate from here...if it doesn't improve from here, which I don't think it will, then that will justify rates going lower.
On a knifes edge with the risk to the downside, I would be more confident in the OCR going below 3% this year than thinking we've hit the bottom of the easing cycle.
My view is that if rates get slashed even more from here it means that the economy is on its knees and that is going to put serious downward pressure on asset prices, which will cause a feedback loop of people tightening up (as the wealth effect reverses), banks restrict lending, jobs continue to be lost lost, business failures, low appeal internationally to move here etc.
Lower rates from here = bad news story for everyone, including mortgage holders (as their asset may drop further in price, there is little wage growth, poor job security, businesses fail).
Steady or rising mortgage rates could indicate the opposite - a strong economy, wage growth, job security, very little business failure. And yet people with mortgages are often screaming for lower rates but are unaware of the consequences of what they desire.
Just seems to be us out tonight huh! 😂
I agree, they wouldn’t cut rates in a good economic environment, but I think we are a long way off good. If rates stay steady where they are now, or slowly track upwards then it’s taking too much money out of the economy, it’s not just mortgages, the cost of lending hits far wider than that and a restrictive cash rate will strangle NZ further.
New lending is needed, especially if the govt continues with austerity, to get new lending it has to be more affordable/available. I’d love to see the cash rate cut & lending restrictions used wisely to cap real estate but let agriculture & business start to grow again.
There could be a real concern that the RBNZ cuts heavily towards the end of this year, especially if the US starts to hurt & that encourages lower rates, Nat’s panic with poll results close to an election year so start spending to buy votes and we end up with that perfect storm of an economy being heavily fuelled by both monetary and fiscal stimulus at the same time…all of this stuff is rear looking so we could be shaking our heads in a couple years at an economy that’s falsely frothy again on cheap debt & govt spending…is that good for the long term, nope, does that mean I believe it won’t happen, also nope 😬
"THOSE WHO CAN PAY SHOULD. THOSE WHO CAN'T SHOULD STAY AWAY"
Not the institutionalised inequitable NZ I would like to see developing.
You either pay in time wasted or cash expended ...?
Water cooler buddy spotted a boomer woman in Tāmaki Makaurau y'day fresh off a plane from Canada sporting a bright 'Canada is not for sale' cap. Thought she was the bees knees.
I pointed out that this is not actually true. In fact, Canada has been for sale for a long time, particularly through the laundering of money through Vancouver real estate (and Toronto in more recent times). While this has benefitted the local and national govts, it has played a key role in degrading socio-economic conditions for young Canadian nationals (and granting foreign nationals Canadian citizenship) and non-property owners. The scale of what has happened is terrible and shows poor planning and leadership from the Canadian ruling elite.
A 2020 report from the Criminal Intelligence Service of Canada found that as much as CA$113 billion was being laundered in the country every year. In all, 176 organized crime gangs – half with international ties – were fully integrated into Canada’s economy, the report says, and nearly half were involved in the cocaine trade.
The real estate sector, in particular, is “vulnerable to exploitation by criminals looking to launder illicit (proceeds of crime),” the federal government submission reads, by providing a secure, legitimate investment and a location to live and conduct “further criminal business.”
https://www.occrp.org/en/investigation/following-a-trail-of-tainted-mon…
Boomers be triggered by Luxy's direct foreign investment plans in 3.. 2... 1
This is wild. Booz Allen Hamilton has been making out like a bandit on US govt contracts. Appears Deloitte and Accenture under the microscope as well.
Booz Allen generates 98% of its roughly $11 billion in annual revenue from contracts in which the end client is a U.S. government agency or department. It has told investors that it sees the U.S. government as the world’s largest consumer of management consulting and technology services. Since the election of President Trump in November, its stock is down about 30%.
A range of government officials have recently taken aim at consultants. In a post on X Tuesday, Doug Collins, the Department of Veterans Affairs’ newly confirmed secretary, said the VA was canceling nearly $2 billion in contracts. “No more paying consultants to do things like make Power Point slides and write meeting minutes!” he wrote.
https://www.wsj.com/business/this-company-gets-98-of-its-money-from-the…
Lucky we do not have this problem in NZ....
Lucky we do not have this problem in NZ....
We do. Kinda. But most people don't care and / or not interested.
The markets are not liking Trumps recent confirmation that he will go ahead with the 25% tariffs on Mexico and Canada as early as tomorrow and his decision to stop providing military support to Ukraine.
Most markets being down at the same time, equities, crypto, oil (not gold) is a very bad sign for what lies ahead.
BRACE far a very dangerous time ahead.
Its not just that, DeepSeek upset the pay for AI access, NVIDIA tanked 9% today... The Chinese are directly attacking that space, its going to get way way worse. As my son joked, who thought the CCP would opensource AI...
Meanwhile I will bet that more blue names are in the files then reds. I think Trump may drain the blood out of a few faces at least, if not the swamp itself...
Epstein Files
Following the lame Thursday rollout of the so-called Epstein files which contained nothing new of import, Bondi asked the FBI to release all the withheld files by Friday morning without omissions - asking Director Kash Patel to also investigate why thousands of Epstein documents were withheld by the agency.
"Late yesterday, l learned from a source that the FBI Field Office in New York was in possession of thousands of pages of documents related to the investigation and indictment of Epstein," Bondi wrote in the letter. "Despite my repeated requests, the FBI never disclosed the existence of the files."
I'm not sure this should be a partisan issue, but this quote from Donald Trump does seem appropriate.
"I’ve known Jeff [Epstein] for 15 years. Terrific guy, He’s a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side."
Rheinmetall shares up over 50% in the last month. Is it time to invest in European defense stocks? They seem keen on keeping the war going.
Gotta be in to win Z. My mate is a wokester and diehard Democrat supporter. Made a killing out of US defense stocks.
IMO, he has very low self awareness as a 'progressive'.
The Dems are quite big on war stocks. Gottenheimer and Pelosi top of the pile.
https://responsiblestatecraft.org/congress-defense-stocks/
OK. This is not available via English media yet.
China has imposed tariffs on US agricultural products - the US largest export to China. 15% on chicken, wheat, corn and cotton. 10% on soybeans and other items. On top of that, it will add more export controls and unreliable lists.
The US is likely to have to spend some of this import tariffs on farmer subsidy to offset this.
“ on farmer subsidy to offset this.” True enough but that in itself identifies that the cost of tariffs are not always borne by the country of import which is continually touted by commentators, even on here. Likewise tariffs on USA imports don’t necessarily mean that the USA consumer is going to face higher prices.
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