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
Kiwibank cut its 2 year rate to 4.99%, matching eight others, including all the other main banks. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
The Police Credit Union trimmed two short rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
IRD MORE 'EFFICIENT'
The IRD is saying their Increased tax compliance work has resulted in a noticeable increase in audit activity. In the first half of the financial year, from July to December 2024, they opened 3,600 audit, +50% more than the same period on 2023. They uncovered $600 mln of additional tax that should have been declared. Follow the link for much more detail, including that for undeclared crypto profits.
BIG SWITCH
There were +7,100 more private dwellings added in Q1-2025 from the prior quarter, +32,500 added in the year. But only +2800 were for owner occupiers, +4200 were rented, and +100 were provided free. That is sharpy different to the Q1-2023 (two years ago) when +11,200 owner-occupied dwellings were added, +3100 for renters, and -900 were lost to those provided free.
"ROBUST FINANCIAL MANAGEMENT & A WEALTHY ECONOMY"
Ratings agency S&P says the expect Auckland Council's deficits after capital accounts to narrow to less than 10% of total revenue and its debt levels to decline when it separates its water utility, Watercare. Auckland's strong economy and liquidity, along with experienced management, will support its creditworthiness during this transition. So they have affirmed its rate at AA with a 'Stable' outlook.
NZX UPDATE
As at 3pm, the overall NZX50 index is down -2.9% and the weekly change is now -3.5%. Year-to-date it is down -9.4%, and the change from this time last year is now -1.1%. Manawa Energy is the sole gainer within the NZX50, with Vulcan Steel, Vista Group, Gentrack, and Mainfreight topping the decliners. Market heavyweight F&P Healthcare is down -3.5% so far today. More here.
DEEPER HOLE
In Australia, their pre-election Budget update is out. The underlying cash deficit in the 12 months ending June 30 will be AU$28 bln, swelling to AU$42 bln through June 2026, they now say. That's going from -1.0% of GDP to -1.5% of GDP. "[The] escalation in trade hostilities has created significant economic uncertainty and exacerbates the risks to the economic and fiscal outlook", they say.
WHAT IS WARREN DOING?
Legendary investor Warren Buffett famously said "we are fearful when others are greedy, and greedy when others are fearful". It turns out he was a major net seller of equities in 2024 and now sits on a US$334 bln pile of 'cash'. (NZ$650 bln). But is he a buyer now? Not many think he will be. He will wait and wait, maybe until Trump is gone.
SWAP RATES DROP AGAIN
Wholesale swap rates are probably a lot lower again today following bond yields down, maybe by as much as another -8 bps. Even the short rates are lower. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -5 bps at 3.54% on Friday. The Australian 10 year bond yield is down -5 bps at 4.17% to new lower levels. The China 10 year bond rate is down -15 bps at 1.64% and a huge move for them. The NZ Government 10 year bond rate is up +6 bps at 4.41% from this morning while today's RBNZ fix was at 4.28% and down -11 bps from Friday. The UST 10yr yield is now just on 3.92% and down -8 bps from this morning's open. Their 2yr is down -13 bps at 3.53%, so that positive curve has now jumped to +39 bps.
EQUITIES REACT TO TARIFF DETAILS
The NZX50 is down -2.9% in late Monday trade. The ASX200 is down -3.7% in afternoon trade. Tokyo has opened down another -6.5% in early Monday trade. Hong Kong is down -9.3%, while Shanghai is down -5.6% at its open. Singapore has opened down -6.3%, a very large drop for them. On Wall Street, the S&P500 was down -6.0% in Friday trade, and the futures trade suggests it will open tomorrow down -2.1%.
OIL DROPS FURTHER ON DEMAND PROSPECTS
The oil price is -US$1.50 lower from this morning's open and now just under US$60.50/bbl in the US, and just under US$64/bbl for the international Brent price.
CARBON PRICE STOPS FALLING
The carbon price is up +$1/NZU today and now at NZ$55/NZU, although still near its recent low. The EU carbon permit price is falling too, now down to 64 (NZ$124). The next official carbon auction is on Wednesday, June 18, with a $68 floor price. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DIPS
In early Asian trade, gold is down -US$5 from this morning's open, now at US$3032/oz.
NZD DIPS
The Kiwi dollar is down -20 bps from this morning at 55.7 USc. Against the Aussie we are unchanged from this morning at 92.5 AUc. Against the euro we are up +10 bps at 50.9 euro cents. This all means the TWI-5 is just under 65.7 and down -10 bps from where we opened this morning.
BITCOIN FALLS FURTHER, FASTER
The bitcoin price is down a net -3.2% from where we opened this morning, now at US$78,507. Volatility of the past 24 hours has been high at just on +/- 3.8%.
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36 Comments
Time to be patient with investment decisions.
Buffet will wait with his cash until companies coming begging for a rescue... at that point in time he will be able to extract the most equity for said rescue... he does this every time, This circus doesnt even have the tent off the truck yet !
In 2008, at the peak point of the global financial crisis, the legendary investor invested $5 billion in Goldman Sachs to strengthen the firm's capitalisation and liquidy in turbulent times. The then decision of Buffett has generated a return of roughly $3.1 billion for him.19 Mar 2023
Is that 3.1 Bill from 2008 until 2023 ? If so, that's actually not that great of a return, only about 3% pa.
It's $3.1Bil he didn't have before. Given the volume of invested funds, I'm sure he has a range of returns on investments across his portfolio.
Perhaps it's time to understand what underwrites money?
That the sky might fall one day
Shouldn't preclude one from being a good hunter gatherer today.
What one does with the excess capital, is their decision.
Build resilience
Double down
Ramp up
Buy a European car
Give it all to charity
Indeed, life will go on.
That wasn't answering my point, brushman
What underwrites it is fairly irrelevant.
It's the current medium of exchange, is widely accepted, and has some level of stability. In some other time, it'd be sea shells, or shiny rocks, etc.
You earn it, and spend it, and if you are adept at this process, you will earn a surplus to do with whatever you wish.
Tomorrow might also be the last day the money has any value.
Or any of us are alive
It's a pickle aye.
- The coalition has released the 2025 Defence Capability Plan
- It outlines $12 billion of spending over the next four years, $9 billion of which is new money
- The plan will lift defence spending to more than 2 per cent of GDP in the next eight years
https://www.rnz.co.nz/news/political/557432/watch-live-coalition-unveil…
Perhaps some of that expenditure can be clawed back in “peacekeeping” operations. Might be a few opportunities opening up.Understand Fiji earns rather well in that capacity.
For once, I think they're on the right track. When I saw the kknz comment, I though: money doesn't do an effective kill. But the list in the link is pretty logical. 8 billion living where there is carrying-capacity for 1-2 billion, and a draw-down rate exceeding natural attrition possibilities.
We need to be armed. The pacifists were - and always have been - wrong. To be pacifist, you first need not to grow.
"Space capabilities"?
Space Cadets
There are a lot around.
We need to be armed. Agreed but how so. The first rule of attack is that the counter attack cannot inflict greater damage. That is the rub and it operates and describes itself in the form of deterrence. It used to be encompassed in the scope of “the balance of power”. Hence for example Kaiser Wilhelm versus the Royal Navy. Unfortunately, like it or not, the equivalent of that today is nuclear weaponry. Recently identities in both Russia and China have been bellicose in terms of their relative prowess and Israel has itself embraced the accompanying definition of justification in the face of a perceived existential threat. NZ has never had the ability to defend its long coastline of lengthy islands, even in terms of conventional warfare. Therefore as is looming now NZ needs allies and history demonstrates by way of outstanding military achievements internationally its commitments to those allies. However, again like it or lump it, nowadays it’s not battleships doing the requisite deterrent heavy lifting, it’s nuke subs.
It outlines $12 billion of spending over the next four years
How will the elderly take this seeing the govt spend up large on military and talk about making savings with job losses and restructures, all while letting the health system they rely on to dilapidate. Coalition are showing their priorities here.
If $12b is spent on importing military hardware then you will be right. But given the speed at which expensive military hardware is destroyed by cheap drones that would be a mistake. Hopefully our governments will be spending mainly on retaining trained staff and employing more soldiers, sailors and airmen/airwomen. If spent on people then much of the money spent will remain in the NZ economy and therefore taxed to support your health system.
(Warren Buffet)... now sits on a US$334 bln pile of 'cash'. (NZ$650 bln)...will wait and wait, maybe until Trump is gone."
At 94 years of age 🤔
https://www.msn.com/en-in/money/topstories/the-system-has-now-reached-i…
“The system has massive paper (digital) claims piled up on top of claims, finally rooted in claims on US debt. That house of cards is the global financial system. We may be facing a structural collapse.”
I'd have worded it slightly differently - for 'US debt' I'd have said 'global debt's claim on the remaining planet'.
And Buffets' 'pile of cash' - visions of Scrooge McDuck diving in - is really just piles of future proxy. At the end of the day, it can either be exchanged for something - or it can't.
Buffet will exchange his cash for the next best thing, just before the intermission... as he always does...
S&P 500 Futures 4,915.00 - 195.25 -3.82%
Don't worry it will 100% bounce off 3,100
Just remember, no one dies in banking, its not like deep sea diving or mining.... its just money.
Quote of the week
Just remember, no one dies in banking, its not like deep sea diving or mining.... its just money.
"At the end of the day, it can either be exchanged for something - or it can't."
And therein lies the problem.
Every major crash like this, its the end of the world, well, just before it looks to end I will be getting long.
Its not worth anything in a bank if it is the end of the world!
This is nothing like the GFC yet!
"This is nothing like the GFC yet!"
This is a continuation of the GFC...what has occurred in the past 15 odd years?.....'money 'creation in the absence of growth, the fundamental requirement of our economic system....that stop gap has now reached the end of its usefulness....what options remain?
Local QE and the nationalization of anything needed to keep society feed and watered. A war footing in non war times?
I think they can kick the can one more time, but I maybe wrong. Social media and gen ?? may object, they are not used to people carrying firearms. If really desperate a debt Jubilee, those with assets may object... maybe they will be in gold before the jubilee?
there is no limits to F.-kery to keep things going, look at human history even after WW2 things turnout ok.
Maybe Trump knows all this and is trying to position the US for the next phase vs globalisation... even trump is advised by the deep state
S&P500 futures now down - 248.00 -4.85% I still think the open may be the low of the day and a very small long may pay today.
You're betting on the sinking rate of the Titanic - looking at one-minute windows.
Good luck with that.
LMBF is right; this is a continuation - and from before the GFC in my opinion. I think we can trace it back to before 1980. The series of bubbles are worth looking at, in that light.
watch this... its coming
you have to wait till people think they will lose everything in fear before you can pull a hoist like that.... its coming.
Boy, I got vision, and the rest of the world wears bifocals.
.
Everyone one is in panic mode about ...money. Are we about to praise the speculative investment value of bullets, antibiocs, bottled water and canned food...?
Probably
Guessing the day is harder
When most people figure that out
It'll be too late
Guessing the day is a waste of time. Once you grasp the concept, the only approach is to be proactive. Lowest-hanging fruit, all that. Nurturing a circle of compatible people with useful skills is a biggie.
An understanding of energy and physics is useful too.
Interesting times
Supposedly the Egyptians built the Pyramids without fossil fuels....
I reckon we can get through this PDK
Towards the end of hegemonic irruptions, monuments-to-self become an elite obsession.
Interestingly enough, it's one of most common signs of pending collapse.
Jared Diamond's Collapse, and Joseph Tainters collapse of complex societies - are both worthwhile reads.
That's not that good an observation.
Just as a 60 year olds house is probably nicer than a FHB
A civilisation is hardly going to build it's most complex and intensive structures closer to it's inception point
Jared Diamond's Collapse, and Joseph Tainters collapse of complex societies - are both worthwhile reads.
If you like Armageddon porn maybe.
Jared Diamond's Collapse is a good read. In so far as most of his examples relate to societies cut off from the rest of the world they were not particularly complex - Ester Island, Viking Greenland. For failure of complex societies see Rome, the Ottomans, China, the Inca, etc. History has corrected some mistakes in Collapse but not disproved its thesis.
Quoting Google's AI search: ""Jared Diamond's book 'Collapse' argues that societal collapses are often caused by a combination of environmental problems, climate change, hostile neighbours, the loss of friendly trading partners, and, crucially, a society's response to these issues. ""
Still early days..... the solutions have to fail a few times yet. Futures off lows, we prob close positive today, guns and ammo are months away.
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