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
No changes here either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
SENTIMENT HESITATION
Westpac's consumer sentiment survey for March reveals a step backwards, probably driven by the uncertainties of talk about the tariff wars and extending inflation risks. Consumer spending had been climbing steadily in recent months, and it will be interesting to see if this latest tick down in confidence impacts future spending. The level of confidence continues to vary significantly among regions. Confidence is in the doldrums in Wellington, but households are more optimistic in regions that have a strong rural backbone or tourism ties, especially in the lower South Island. We won't get the ANZ monthly version on consumer confidence for another two weeks, but the quarterly Westpac version seems to suggest a deeper fall that their rival's version - or perhaps it has all happened rather sharply in the past few weeks.
BEST OF A POOR BUNCH
The housing market is offering only paltry returns for residential property investors. But the latest rental yield and cash flow figures suggest one bedroom apartments are the way to go for investors.
NOT GETTING WORSE
Our current account deficit is getting smaller. For Q4-2024 it was -$7.0 bln compared to the -$7.9 bln in Q4-2023. For the 2024 year it was -6.2% of GDP and down from 2023's -6.5% of GDP. But the gain was less than the -6.0% expected. A key reason for the improvement is that we now run a much smaller services deficit that offsets our goods deficit. (In fact, by shifting to look at seasonally adjusted data, that services balance is supposedly a 'surplus'. It isn't on an actual basis, but either way it is a good improvement.) We get the Q4-2024 growth result tomorrow (Thursday).
NET INTERNATIONAL DEBT STABLE
The Q4-2024 data shows little improvement in our international investment position overall. But the detail is interesting. Our international assets rose by +$77.1 bln from the Q4-2023 period, a remarkable +21.3% rise. Our international liabilities also rose and by +$76.1 bln, or a +13.3% rise. We are making gains in areas that are positive. Apart from the giant insurance related inflows in the 2010-2011 earthquake insurance event, the latest financial asset gains are among the largest ever seen. That is enabling us to keep our net external debt levels under control. Our net external debt of 51.6% of GDP is little-changed, the same as it was in 2017 and it has level-pegged over most of the intervening period.
DAIRY PRICES HOLD UP
The latest dairy auction earlier today brought overall prices unchanged in USD but the rising NZD pushed that to a -3.3% fall in local currency. This is a late season event with slightly lower volumes, but is positive that most commodities, especially cheese and butter, are holding up. The WMP dip is minor. Since early February, overall prices have been relatively stable.
HEAVYWEIGHT BOOST
Tomorrow Fonterra will announce its half year trading results, and no doubt give an update on its payout forecast and expected earnings. And an update on its Mainland division divestment. There will be lots to cover and expectations are that it will be all positive for Fonterra shareholders and suppliers.
JUST A REMINDER
From Tuesday, April 1, 2025 the adult minimum wage will go up from $23.15 to $23.50 per hour and the starting-out and training minimum wage will go up from $18.52 to $18.80 per hour. But if you still pay adults at this rate you should ask whether that is right or fair. It is not at a living wage level.
NZX UPDATE
The NZX50 has fallen -0.3% so far today and holding, extending its -1.7% decline over the past five days. Kathmandu, Sky TV, Stride Property, and SkyCity Entertainment are today's biggest gainers. Chorus, NZX, Ryman, and a2 Milk lead the decliners. Market heavyweight F&P Healthcare is up +0.5% so far today.
FEWER DODGY TRUSTS, BUT NOT NONE
There's a much smaller number of NZ foreign trusts than there was a decade ago, but they're still quite popular in some countries. The number of NZ foreign trusts are down more than -80% since the release of the Panama Papers.
DODGY SCAM ADS ANNOYING
Some readers may have had a scam McAfee ad takeover a page of ours. It is occasional and random. It is a worldwide problem and the ad industry is focused on countering this tactic. We have engaged a partner in Sydney to fight this in the ad-tech trenches who've already activated a defense. Supporters who go ad-free won't have been impacted. Most others won't either but some will. If you see it, just click the tab (x), or immediately close your browser. (It won't be there when you open it again.) Despite what it says it won't be running a scan if you do this.
MORE RATINGS AFFIRMED
S&P Global Ratings today affirmed its 'AA+' long-term foreign currency and 'AAA' long-term local currency issuer credit ratings for the Local Government Funding Agency (LGFA). They also affirmed their short-term foreign and local currency issuer credit ratings at 'A-1+'. At the same time, they affirmed the 'AA+' long-term foreign currency and 'AAA' long-term local currency issue ratings on the agency's senior unsecured debt. The outlook on the long-term ratings is stable.
JAPAN JUMP I
Japanese exports rose +11.7% in February from the same month a year ago and this was the second best rise since December 2022 and much better than the +7.8% rise in February 2024. Still it wasn't quite as strong as expected.
JAPAN JUMP II
Japanese machinery orders rose +19.8% in January from the same month a year ago (up to ¥3.27 bln from ¥2.73 bln in January 2024.)
BOJ WATCH
And we are waiting on the Bank of Japan monetary policy review which should be released just as this report is published. Markets expect no change to their 0.5% policy rate. Update: The Bank of Japan kept its key short-term interest rate at around 0.5% during its March meeting, maintaining it at its highest level since 2008 and in line with market expectations. It was a unanimous decision and a cautious stance, focusing on assessing the impact of rising global economic risks on Japan’s fragile recovery. They noted ongoing uncertainties in the domestic economic outlook, including trade policies and global conditions.
APRA WATCH
A recent speech by the head of the Australian prudential regulator made the case for making sure bank directors were not in sinecures, requiring turnover every ten years. It also made the case for "unquestionable strong" capital rules and suggested they would not follow the easing off signaled by the Bank of England and the ECB. The US Fed is also under political pressure to ease banks capital requirements (as is the RBNZ via the local select committee who want easier access to debt funding by shifting bank capital adequacy requirements lower). APRA don't see this as a good idea and suggested they won't follow those recent trends. Interestingly, the NZ subsidiaries of Australian banks also must comply with APRA because APRA regulates the parent banks as groups.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed today, 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 3.66% on Tuesday. The Australian 10 year bond yield is up +2 bps at 4.46% today. The China 10 year bond rate is down -1 bp at 1.95%. The NZ Government 10 year bond rate is down -2 bps at 4.73% while today's RBNZ fix was at 4.68% and down -2 bps. The UST 10yr yield is now just on 4.30% and unchanged from yesterday. Their 2yr is up +1 bp at 4.05%, so that positive curve is still at +25 bps.
EQUITIES FIRMER, EXCEPT THE NZX50, AGAIN
The NZX50 is down -0.2% in late Wednesday trade. The ASX200 is unchanged in afternoon trade. Tokyo is up +0.6% in early Wednesday trade. Hong Kong is down -0.4%, while Shanghai is mirroring that at its open. Singapore has opened up +0.5%. The S&P500 ended its Tuesday session down -1.1% in Wall Street trade.
OIL SLIPS
The oil price is down -US$1 from this time yesterday and now just over US$66.50/bbl in the US, and just under US$70.50/bbl for the international Brent price.
CARBON PRICE SLIPS LOWER
The carbon price is lower today at NZ$59.25/NZU on still-good volumes, a real bear trend. That is extending the slide that started early February. The next release of units at the official auction is this week on Wednesday, 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 STAYS ABOVE US$3K
In early Asian trade, gold is up another +US$24 from this time yesterday, now at US$3029/oz.
NZD EASES
The Kiwi dollar is down -20 bps at 58.1 USc from this time yesterday. Against the Aussie we are up +10 bps at 91.4 AUc. Against the euro we are down -20 bps at 53.2 euro cents. This all means the TWI-5 is just over 67.2 and down -20 bps from yesterday.
BITCOIN ALSO EASES
The bitcoin price is down -0.7% from this time yesterday, now at US$82,652. Volatility of the past 24 hours has been modest at just under +/- 1.4%.
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62 Comments
Easy Crypto acquired by Aussie firm Swyftx. I call BS on the following claim. It should state 50% of respondents from an unknown universe (possibly including bots).
Meanwhile, research by Web3 consumer research firm Protocol Theory, in partnership with Easy Crypto, estimates almost 50% of New Zealand’s 5.2 million population are either current crypto investors or are considering investing in the future.
https://cointelegraph.com/news/swyftx-buys-new-zealand-crypto-exchange-…
Severe B.S . indeed. Not an outfit to be trusted in any way.
Lee Eaton from Independent Reserve says here in that 30-40% of Aussies aged up to 55 own crypto. Also seems high.
https://www.linkedin.com/feed/?trk=guest_homepage-basic_nav-header-sign…
maybe like here a tiny % via a kiwisaver via asset allocation, but its laughable data.
"or are considering investing in the future." Is the key to the stat
Good on Trump for managing to end the war in Ukraine… (sarc)
And maintaining the ceasefire in Gaza.
Robot Chicken explained that scene:
Difficult to imagine what Trump thinks he’s got to make Russia stop if Russia doesn’t want to stop. No use offering incentives they will just be pocketed and the business will carry on . That leaves disincentives and if some more exist then they will need to be a hell of a lot more effective than anything imposed to date. Being late to pick up the phone would tend to indicate that Putin is hardly a worried man about anything coming out of the USA.
The Ukraine situation is like two cave people hitting each other with clubs. A cave monster comes and says ' stop it' . The aggravator claims they will stop hitting the other one so long as the other are not allowed to have clubs.
Okay so where do you think this will end?
Good on Trump for being the only leader to be even interested in ending the war in Ukraine. Congratulations to him.
You forgot the sarc tag
No redcows. There will be no sarc tag.
Read again to understand.
It makes it easier when you have no empathy for the attacked nation and aren't smart enough to consider the moral hazard.
Look at it from another angle, he was paying the bill, but not enjoying the experience... its day 1,119.
what is the USA Taxpayer getting for the bill?
what ever the morals the bill is too great for a US Taxpayer, meanwhile Germany is still buying Russian energy...... WTF
Paid Russia more then contributed to Ukraine
Not really paying the bill. Just sending old arms nearing use-by date and advertising replacement cost, which they were up for anyway. What Russian energy is Germany still buying?
A bit over a century since the first flights by the Wright bros / Richard Pearse we should take a moment to give thanks for these astronauts safe return & acknowledge that humans are capable of some amazing things when we put our team imagination & ingenuity together.
Butch Wilmore and Suni Williams return to Earth after nine unplanned months in space
https://www.bbc.com/news/live/c9de6q52g8qt
Their bones will be seriously weak. Theres only so much force they can apply through em using the prescribed equipment in space but lack of force would lead to them becoming brittle as heck
I got one of those McAfee events when browsing comments on Friday. I thought I was logged on but the website was lit up with numerous flashing adverts. I thought at the time it would be very off putting for those that didn't log on and then I got the alert. Adverts must have been caused by the scam. A relief to know it wasn't actually scanning anything. At the time I restarted the computer and ran full scans on everything.
Quite common on "those" websites....
That was "this" website.
yes yes yes , but advertisers know your browsing history
no one else see's YOUR adverts
Central Melbourne apartment values have increased by just 1.6% over 10 years.
About half of Central Melbourne apartments were resold at a loss, even after owners held for 10 years.
That's insane considering immigration is off the hook.
https://www.afr.com/property/residential/home-sellers-log-record-306-00…
The landlording business is (was?) capital gain.
No capital gain, what's the business?
Keeping body corporates employed?
In theory property should keep pace with inflation while earning rent. Rent goes up with inflation as well. Can be a good income stream when one retires.
Can you post the mathematics of your "theory"
It's very elementary stuff. Anyone with half a brain would understand this.
sure sure sure, lets post it for peer review?
Where did you lose the other half?
nice comeback
Doesn't matter. It only needs half a brain to understand that house prices and rents inflate.
Edited - as getting too pugnacious.
Argentina has had inflation above 60%, they must have some really expensive real estate. And with Russia having inflation between 7-17%, they must have expensive real estate too.
If inflation goes above the central bank's 2% target, they usually raise interest rates, right? I think the mortgage rate in Russia was as high as 42% recently. My point is property only does well if inflation stays below the target or the central banks ignore inflation above their target.
Can you explain this "very elementary stuff" like you would at a property seminar?
It's there in the original comment.
Saw today the NZ2Y closed at 3.639
Over the last few years, the bond market has been more volatile than the stock market, so expect more ups and downs. It’s the overall trend that matters. Good to see you’re watching the NZ2Y.
I hadn’t been looking at the NZ stuff much to be honest till you mentioned it yesterday, was looking at the US 5Y & 10Y, I agree with the volatility, it’s exciting (and concerning) times.
Yes, please elaborate on how it performs in low versus high inflation environments.
"whether that is right or fair." is up to the individual. A number of good reasons why one might wish to work for less than minimum wage. Do gooding governmental types should stay out of it. A tax on the unskilled when we have 12.6% of working age population on a benefit. We are all paying for an artificial minimum wage.
A number of reasons why an individual employee may wish to beat the crap out of an abusive employer...perhaps the do gooding governments should keep out of that as well
Why bother when you could just fake an injury and go on ACC for a couple of years?
Comparing violence to negotiating terms with an employer is a desperately long bow to draw?
Satisfaction
Comments have seriously degraded since the elimination of the sensible folk who used to comment for free.
As has the understanding of the role of the rule of law
It's a percentage thing.
You were 1/100, noy you're 1/20.
Landlords and property investors look for value. Actually they're cheapskates. $10 a month for something that was free was unpalatable. I'm starting to see their point.
They're rentiers.
Churchill regarded rentiers as parasites.
He wasn't wrong.
Churchill was okay with landlords as he considered their investments productive.
It's the same cost to me as it was before. I paid because the content is valuable, not to allow me to comment.
Yes profile, I would have to agree . I have known several who have claimed ACC for many years without real injuries.
It's a shame really because it is a good scheme used properly. I remember when we had to go private, what a joke.
So I have to increase the pay rate for a new unskilled employee - my issue is that they cannot survive/thrive on the minimum wage of nearly $1000 per week because their landlord is ripping them off - and when they get a pay rise their landlord ups the rent - what an f'ing scam
^^^^^ THIS
Stupid comment.
No, it is not.
And there lies the problem.
New Zealand rents are very reasonable. You want houses to be supplied at less than cost? Since when does someone on minimum wage rent a whole house? They normally have flatmates,.all paying around $200 a week.
Right now there are more chairs then players............
let the music play
Find that other half a brain - it may not be enough, but it might help.
Reasonable? Who says?
I'll tell you what they include - the consumption-load of every landlord.
Loaded onto tenants.
There is no other pathway.
It is what it is. You're kind of a communist, right?
The dumbass told his landlord he'd had a pay rise?
Unskilled isn't the right word..
AFR - Promoting an auditor to CEO was always going to bite Deloitte’s consulting division. The tension between the two areas – one the steady hand and the other the glitzy show pony – is as old as the nebulous industry of management consulting itself.
Few could have imagined chief executive Joanne Gorton’s ascent would result in the consulting version of a night of long knives. Late last week, we hear she quietly sacked about 55 people from the consulting and strategy division, many of them partners, across the country.
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