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 major changes to report today. But SBS Bank said it would cut its reverse mortgage interest rate by -50 bps to 8.89% from April 15, 2025. 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.
PRESSURE ON FOOD PRICES LOW
Food prices fell -0.5% in February from January, reversing January's sharp rise, while annual grocery costs continue to climb. Year on year food prices are up +2.4%. Meanwhile Infometrics reported that Foodstuffs paid its suppliers +1.8% more in February than a year ago.
A MODEST PICKUP
Westpac's monitoring of the card records shows retail spending is starting to pick up again, but the recovery remains gradual for now. Mortgage costs remain an important drag on spending for many households, they say. They also note spending in those regions with a strong rural backbone is outpacing spending in metro centres.
'LIFT-OFF'
The BNZ/BusinessNZ Performance of Manufacturing Index rose strongly in February to its best expansion since August 2022. New order growth essentially drove the gains but this is the one area that was still weaker than the long-term average. The rural sector is rising strongly, and now if the factory sector is too, we just need the tourism and household sectors to make their comebacks.
FAT BANK BALANCE
The release today of the RBNZ's balance sheet as at the end of February 2025 shows that the Crown had a settlement account balance exceeding $40 bln (for which it earns the OCR interest rate, or +$125 mln per month). That is its highest balance since April 2021. The RBNZ total assets are unchanged however.
NZX UPDATE
The NZX50 was basically flat at 3pm today, resulting in a -1.5% decline over the past five days. Year-on-year, the index remains up +3.5%. Ryman, a2 Milk, Vulcan Steel, and Vista Group were today's top gainers, with Kathmandu, Vector, Hallenstein, and Heartland all declining.
COUPE OUTED, CONVICTED, JAILED
Real estate businessman and serial offender Aaron Coupe has been sentenced to 4 years and 5 months of imprisonment by the Auckland District Court in January for taking part in the management of companies in breach of the law. An appeal for permanent name suppression was abandoned, bringing protracted court proceedings to a close for a long list of aggrieved and vulnerable investors, and business partners in the United States, Auckland and Cardona Valley in the south.
EVEN MORE STUDIES
The Government says it is getting ready to make a decision on the next Auckland harbour crossing. So it is commissioning more studies including geotechnical, environmental, and utilities investigations to gain a comprehensive understanding of ground and seabed conditions and, in time, to determine whether a bridge or a tunnel would be the more suitable crossing option. It says it is also looking at "innovative" funding arrangements for what could be the country's largest infrastructure project ever.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed today, maybe marginally higher, 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 3.69% on Thursday. The Australian 10 year bond yield is down -3 bps at 4.45% today. The China 10 year bond rate is yup +1 bp at 1.91%. The NZ Government 10 year bond rate is down -3 bps at 4.71% while today's RBNZ fix was at 4.64% and down -6 bps. The UST 10yr yield is now just on 4.28% and down -2 bps from this time yesterday. Their 2yr is down -3 bps at 3.96%, so that positive curve is unchanged at +32 bps.
EQUITIES HOLD, EXCEPT ON WALL STREET
The NZX50 is up +0.1% in late Friday trade. The ASX200 is up +0.3% in afternoon trade. Tokyo is also up +0.3% in early Friday trade. Hong Kong is up +1.0%, while Shanghai is up +0.8% at its open. Singapore has opened down -0.1%. The S&P500 fell -1.4% in Thursday Wall Street trade, the largest mover on global markets.
OIL SOFTER
The oil price is down -50 USc from this time yesterday and now just on US$67/bbl in the US, and just over US$70/bbl for the international Brent price.
CARBON PRICE SLIDES FURTHER
The carbon price is down -$1.25 today at NZ$60/NZU on better volumes. That is extending the slide that started early February. The next release of units at the official auction is next week 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 JUMPS
In early Asian trade, gold is up another +US$50 from this time yesterday, now at US$2988/oz and a new record high. But so far it hasn't ticked over US$3000 at any point yet.
NZD SLIPS BACK
The Kiwi dollar is back down -30 bps at 57.1 USc from this time yesterday. Against the Aussie we are up +10 bps at 90.8 AUc. Against the euro we are unchanged at 52.7 euro cents. This all means the TWI-5 is just over 66.3 and down -20 bps from this time yesterday.
BITCOIN LOWER
The bitcoin price is down -2.7% from this time yesterday, now at US$81,701. Volatility of the past 24 hours has been moderate at just under +/- 2.6%.
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18 Comments
It would be good to see an in-depth article exploring the implications of the settlement accounts being so high. There are indeed important implications. They include the fact that there is a lot of money sloshing around in the system looking for a home.
And in the meantime it is costing the RBNZ (and hence citizens of NZ) quite a sum of interest payments on those settlement accounts.
The need for some quantitative tightening needs discussion. Arguably the RBNZ should have been doing this (as have the FEDS) quite some time ago. It seems that we may have once again got ourselves ... Read more
It would be good to see an in-depth article exploring the implications of the settlement accounts being so high. There are indeed important implications. They include the fact that there is a lot of money sloshing around in the system looking for a home.
And in the meantime it is costing the RBNZ (and hence citizens of NZ) quite a sum of interest payments on those settlement accounts.
The need for some quantitative tightening needs discussion. Arguably the RBNZ should have been doing this (as have the FEDS) quite some time ago. It seems that we may have once again got ourselves into a pickle because the RBNZ does things far too late, and thereby accentuates rather than resolves monetary issues.
KeithW
Read lessDoes the RBNZ deliver the economic decision making competence NZdrs should expect in return for their $160M operating budget? or would the consensus of Interest.co perform better?
Just asking the question...
The RBNZ is non political, independent for obvious reasons. That though has extended itself into being unaccountable.
The RBNZ is non political, independent for obvious reasons
But it's not. And neither are any of the other Anglosphere central banks.
They are also non-transparent in how the MPC reach their consensus. What stats do they see? What is discussed in their secluded meetings? We will never know…and confidence in their ability is already at an all time low. People don’t like being talked to about matters impacting their weekly disposable income like they are less intelligent, when those delivering the message cannot explain their reasoning in sufficient detail to satisfy the punters. Especially when the punters are the ones paying those delicering the message, as well as for it.
The mighty Greg Jericho dives into the plight of young Aussies and housing and debunks the ruling elite's (in this case, the awful Joe Hockey) claim that if Aussies wanted to buy a house, the first thing they should do is “get a good job that pays good money” - a claim Hockey made approx 10 years ago. Jericho is a data-driven guy and slays all the BS coming from the boomers.
Clearly the market is broken. If someone on an income better than 80% of Australians is unable to save for a median-priced house, then something is very, very wrong.
But what did ... Read more
The mighty Greg Jericho dives into the plight of young Aussies and housing and debunks the ruling elite's (in this case, the awful Joe Hockey) claim that if Aussies wanted to buy a house, the first thing they should do is “get a good job that pays good money” - a claim Hockey made approx 10 years ago. Jericho is a data-driven guy and slays all the BS coming from the boomers.
Clearly the market is broken. If someone on an income better than 80% of Australians is unable to save for a median-priced house, then something is very, very wrong.
But what did Hockey have to say?
Well, four months after making this claim, he left parliament and in his final speech he told Australians that “negative gearing should be skewed towards new housing so that there is an incentive to add to the housing stock rather than an incentive to speculate on existing property”.
A decade later, we are heading into an election where neither major party proposes such changes. Instead, we can only assume they are content with sentencing young Australians to saving forever for a deposit that they’ll never actually reach.
https://www.theguardian.com/business/grogonomics/2025/mar/12/gone-are-t…
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Some interesting highlights re the gold explosion.
- Comparing gold vs ratty over the past 12 months, if you had chosen gold over BTC, your return would be approx 2x higher (+37% vs +12%).
- Comparing gold and silver over the same time period, you can more or less call it a tie - +37% vs +35.5%.
- But the winner is gold mining via the GDX proxy - +45%. Now the stunning thing about the miners is that the GDX price is still 33% below its all-time high in 2011.
- Now, if we compared gold miners vs BTC miners, I can use ... Read more
Some interesting highlights re the gold explosion.
- Comparing gold vs ratty over the past 12 months, if you had chosen gold over BTC, your return would be approx 2x higher (+37% vs +12%).
- Comparing gold and silver over the same time period, you can more or less call it a tie - +37% vs +35.5%.
- But the winner is gold mining via the GDX proxy - +45%. Now the stunning thing about the miners is that the GDX price is still 33% below its all-time high in 2011.
- Now, if we compared gold miners vs BTC miners, I can use GDX vs Valkyrie Bitcoin Miners ETF (WGMI). Gold miners are the clear winner - +45% vs -6.9%.
Read less"gold vs ratty" 🤣 Cracks me up everytime I read it.
We all need a good laugh at least a few times a day. But remember that the reference to the "ol' rat poison" is also something of a more serious note. In many ways, its existence is a direct challenge to the status quo that hasn't been seen in our lifetimes and possibly history. And no disrespect to the great Charlie Munger, but the emergence of BTC has been an important stimulus for thinking about many important socio-economic issues and the social contract.
Oh for goodness sakes! What has BTC or any other artificial construct got to do with equity, the real price we pay for individualism at the expense of the collective - seems to reinforce the greed is good and f..k those who can't keep up mantra we see too often.
What has BTC or any other artificial construct got to do with equity, the real price we pay for individualism at the expense of the collective
The vast majority of people don't think about what money is. BTC has stimulated that discussion and encouraged people to learn and make up their own minds. Don't know about you, but I see this as a positive thing. It doesn't matter if people are wrong or right. But they're making an effort instead of just accepting what they're told.
They make some think more, but few think enough.
All forms of proxy - cash, gold, BTC, investments - are expectations that there will be something available, in the future, to exchange them for, Roughly speaking, that means they are a collective expectation that there will be energy and resources available, in the future. Minus 'value added', but plus entropy.
Thay are all in trouble, vis-a-vis the Limits to Growth. Just which - if any - survives (belief in it is maintained) is the gamble. That is what is playing out now, globally, between nations and between elites.
This might sound a bit high-horse but it came from JP Morgan. “Money is gold, nothing else.” I suspect they didn't have ETF's back then.
He understood that any currency, any debt, any equity or receipt had counterparty risk.
Oh dear. Woke entrepreneur conflicted over use of his private jet. Someone like Chloe is not in the private jet class yet (Pocahontas Warren known to use them).
Billionaire Atlassian co-founder Mike Cannon-Brookes says he is personally conflicted about owning a private jet, arguing it is needed for his safety and he is offsetting the emissions from his carbon-intensive travel.
Cannon-Brookes is one of the country’s most outspoken supporters of cutting carbon emissions, using his vehicle, Grok Ventures, to campaign for AGL Energy, where he is the largest investor, to accelerate the closure of coal power plants. He has also pushed other ... Read more
Oh dear. Woke entrepreneur conflicted over use of his private jet. Someone like Chloe is not in the private jet class yet (Pocahontas Warren known to use them).
Billionaire Atlassian co-founder Mike Cannon-Brookes says he is personally conflicted about owning a private jet, arguing it is needed for his safety and he is offsetting the emissions from his carbon-intensive travel.
Cannon-Brookes is one of the country’s most outspoken supporters of cutting carbon emissions, using his vehicle, Grok Ventures, to campaign for AGL Energy, where he is the largest investor, to accelerate the closure of coal power plants. He has also pushed other companies to lower emissions, and is invested in Sun Cable, a major solar power project near Darwin.
https://www.afr.com/technology/cannon-brookes-describes-deep-internal-c…
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Can someone please explain why reverse equity mortgage interest rates are so high? I've tried all the normal DCF calcs and it still seems like screwing those who need it most?
Maybe its risk weighting just like farm mortgages are higher?
https://businessdesk.co.nz/article/finance/heartland-considering-impact…
Heartland take compliance and governance seriously around this
I think there are some annuity products coming online its an interesting space, and I know a few people in it.
No income behind it adjusts the risk weighting but essentially yes you’re right
Gold hit 3000
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