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 here today. All quiet before tomorrow's expected OCR rate cut. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ cut most of its term deposit rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
GOING NOWHERE
QV says housing values are becalmed as buyers remain cautious in the face of an oversupply of homes for sale.
SENTIMENT STILL POSITIVE BUT ACTIVITY REMAINS WEAK
The NZIER's quarterly survey of business opinion for the Q1-2025 continued to point to a subdued economic recovery. Firms remain optimistic about the year ahead, but recent performance has been sluggish, and a worrying resurgence in cost pressures is emerging.
A GREEN LINING IN DARK CLOUDS
In the year to December, agriculture cut its greenhouse gas emissions by -0.4% or by -2732 KiloTonnes (KT). The manufacturing sector cut their by -18% or by -2270KT. The service sector cut theirs by -0.1% t[or by -145KT. Households raised their emissions by +0.4% or by +409KT. No doubt the factory and services sectors were 'aided' by an economy in recession. That makes the agriculture sectors performance a standout because that came despite higher economic activity. Households have few excuses for basic inaction on this front - and will probably continue to point fingers at those who are moving in the right direction in a classic "whataboutism" deflection.
NZX UPDATE
As at 3pm, the overall NZX50 index is up +1.3% and the weekly change is now -3.1%. Year-to-date it is down -8.7%, and the change from this time last year is now -0.4%. Fletcher Building, Channel Infrastructure, Infratil, and Scales lead today's gainers with Skellerup, Vulcan Steel, Oceania, and Genesis leading the decliners. Market heavyweight F&P Healthcare has recovered +0.6% from yesterday.
PARKER TO RETIRE
Long-serving Labour MP and former Minister David Parker has today announced be is leaving Parliament after a 23 year stint. It probably means that Labour will not be campaigning for a wealth tax at the next election.
EYES ON THE RBNZ
The RBNZ is reviewing the Official Cash Rate and will reports the results of this review in a press release at 2pm tomorrow. A -25 bps cut is widely expected and priced in. Floating mortgage rates, and savings account rates will fall in lockstep. Other changes to fixed mortgages and term deposit rates will have more to do with other factors such as weak confidence, low loan demand, re-risking bank accounts with the DCS, and an unstable world facing inflation. The rate cut is almost a certainty. But observers will be looking for clues on how the RBNZ will face up to those tariff war risks.
FROM "ACTING" TO "INTERIM"?
It will be no real surprise, but Christian Hawkesby has been appointed Governor of the RBNZ by the Finance Minister for a six month term, extendable by another 3 months.
LOOKING AHEAD TO HOW DAIRY PRICES RESPOND
Tomorrow will also bring another GDT Pulse dairy auction for WMP and SMP, and again the derivatives/futures markets are seeing an easing of prices for both SMP and WMP. The SMP decline could be -2% from last week's full auction. The WMP decline could be a larger -5%. (Still, these were the expectations at the last Pulse auction two weeks ago and they didn't transpire in the actual event or the full auction.)
GREEN INVESTMENT FINACE GETS THE AXE
The Government is shutting down New Zealand Green Investment Finance (NZGIF), saying it'll stop making new investments and wind down its existing portfolio. Climate Change Minister Simon Watts says NZGIF has invested almost $400 million with very limited results and there are more than 20 other government funds operating with similar objectives.
AN EXTENDED DROP
Australia's NAB business confidence index ticked lower in March 2025 from a revised negative level in February, and it is now at its lowest level since November 2024.
RATE CUTS SEEN AS LESS LIKELY
Staying in Australia, the Westpac Melbourne Institute consumer sentiment survey is seeing fear rising after the Trump tariff actions. Sentiment is -10% lower among those surveyed after the earlier April US tariff announcements. Aussies are now less confident on prospect of interest rate cuts by the RBZ.
NOT A TIME TO INCREASE DEBT
Americans' appetite for consumer debt actually fell in February by US$810 mln, the first drop since November. This followed a downwardly revised increase of +US$8.9 bln in January and came in well below tyhe +US$15 bln rise expected. There were sharp and notable drops in demand for credit card, and car loan debt.
NEVER GOING TO BOW TO TRUMP
In China, the 'home team' is stepping up to buy equities to prevent them crashing further. State funds are reported to be very active today. Separately, China is letting its currency weaken as a counterweight to the American tariffs. The yuan (CNY) isn't moving much but trending from the target 7.2:USD, but the official set rate is moving in the same direction as the offshore yuan (CNH) and heading to 7.35:USD. China said it will "fight to the end" opposing the new US tariffs.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed at the short end today but up sharply for longer durations. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -7 bps at 3.47% on Monday. That is now down more than -25 bps below the 3.75% OCR (which will probably go to 3.50% tomorrow). The Australian 10 year bond yield is up +9 bps at 4.26% to new lower levels. The China 10 year bond rate is up +2 bps at 1.66%. The NZ Government 10 year bond rate is up +18 bps at 4.59% from this time yesterday while today's RBNZ fix was at 4.53% and up a heady +25 bps from Monday. The UST 10yr yield is now just on 4.16% and up +24 bps from this time yesterday. Their 2yr is up +19 bps at 3.72%, so that positive curve has now moved out to +43 bps.
EQUITIES GET A TECHNICAL BOUNCE
The NZX50 is up +1.3% in late Tuesday trade. The ASX200 is up +1.5% in afternoon trade. Tokyo has opened up +6.1% in early Tuesday trade. Hong Kong is up +1.7%, while Shanghai is up +0.3% at its open. Singapore has opened down another -1.8%. On Wall Street, the S&P500 was down -0.2% in Monday trade.
OIL RECOVERS SOME
The oil price is +US$1 firmer from this time yesterday and now just over US$61.50/bbl in the US, and just on US$65/bbl for the international Brent price.
CARBON PRICE LITTLE-CHANGED
The carbon price is only marginally lower today and now at NZ$54.75/NZU. 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 FURTHER
In early Asian trade, gold is down -US$28 from this time yesterday, now at US$3004/oz.
NZD HOLDS
The Kiwi dollar is up +10 bps from this time yesterday at 55.8 USc. Against the Aussie we are unchanged from yesterday at 92.5 AUc. Against the euro we are down -10 bps at 50.8 euro cents. This all means the TWI-5 is littel-changed 65.7.
BITCOIN RECOVERS SOME
The bitcoin price is up +1.9% from this time yesterday, now at US$79,997. Volatility of the past 24 hours has been high at just on +/- 3.8%.
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26 Comments
Hawkesby gets a six month term
Sounds like a prison sentence 😂🤣. On a separate note, watch those swap rates fall. Things are certainly going to get tough out there.
I see Berkshire Hathaway is sitting on $334 billion in cash, ready to pounce on some cheap stocks maybe.
During our recent up trend in inflation some on here were being some what critical about holding $$ in term deposits.
Now or in the near future is the time to look for opportunities. Should always remember nothing remains the same for ever, and that can mean from day to day, week to week or month to month.
There will be bargains out their for the patient
Cheap colonoscopies?
Keep your powder safe and dry!! Don't waste it on catching the just let go, falling knife.
Look for the stocks and smaller asset bargains later in 2025.......
Property/land true bargains maybe in 2026/2027.
Yes, it is likely the downward pathway will be one of oscillations.
But the trend will become inexorable, and at some inevitable point belief will burst the remaining bubble.
Seneca was right.
Some time ago I posted about Walmart putting pressure on Chinese suppliers re costs. Here's some useful facts:
- For several years, Walmart has been the single largest U.S. importer of consumer goods, surpassing the trade volume of entire countries.
- The main Walmart U.S. unit sells mostly groceries and already procures two-thirds of its goods – including a lot of food – from U.S. sources.
- Walmart China “firmly believes” in local sourcing with over 95 percent of their merchandise coming from local sources. In America, estimates say that Chinese suppliers make up 70-80 percent of Walmart’s merchandise, leaving less than 20 percent for American-made products.
https://www.americanmanufacturing.org/press-release/fact-sheet-walmarts…
Walmart might be saved by its grocery business - but plenty of other big boxes likely to go broke, e.g.,
https://www.marketwatch.com/investing/stock/tgt
Exit stage left ex Minister Parker. A self proclaimed lover and student of law. Yet in the fervour of his obsession with a wealth tax, thought nothing of overturning centuries of our cornerstone law, described in the Magna Carta, that the Crown is precluded in intervening in the legitimate ownership of property of its citizens. By empowering the IRD, with legislation at the eleventh hour of the Xmas break, to enquire into and obtain specific details of certain assets by certain wealthy individuals, as a supposed study, the mechanisation was then put in place for the implementation and management of a wealth tax. That would allow the IRD to compile, file and audit the whereabouts and fate of all the assets owned by any chosen individual, a dossier in effect. Assumedly that nasty little piece of Orwellian intrigue has since been repealed.
The HNWI study was blatant envy attempt to compare apples with oranges. However I have not seen anything to confirm those IRD powers won't be used again in future.
I met Parker once, clearly a man balanced by the load of chips on each shoulder.
Parker shared a problem with many others, from right :) across the political spectrum. Nice man, well-meaning, but...
Three of us from Solar Action - a physics Professor, a builder of windmills and self (co-Chair at that stage of Solar Action, and an early adopter) met two of them; David Clark, who shares the Luxon/Brown problem of belief-propensity, and David Parker. We were pushing for renewable adoption while there was still time - this was 2007-8.
Parker said "I cannot believe that we can't run society on Southland lignite". This is a man who, if I remember correctly, presented an award to some train-drivers who had worked out how to haul West-Coast coal to Lyttleton more efficiently ????? We, who all understood EROEI, just looked at him. And realised that he 'didn't get it'.
So his RMA, predictably, wasn't about real sustainability, although of course it would have been closer than whatever we get from the current bunch of clowns.
As for chips on shoulders - those on the right tend to have more; usually the wasting of time (life) chasing money denotes lack of comfort with self, after a certain level at least. And the need to orchestrate their continued superiority, likewise suggests maybe a lack complascence with just being themselves. But both right and left are running unsustainable - meaning un-maintainable - regimes. Pots and kettles...
Pots on the left kettles on the right. Have met more politicians, including a handful of PMs, that I ever sought to. With the exception of only one. that being Mike Moore, I would suggest that all of ‘em, local or national, have buried in their psyche, at a variety of depths, a compulsion and enjoyment at telling other people what to do. Have the joy of a granddaughter, last year at high school and heading for dux, who declined to be a prefect. Why, because I don’t like being told what to do, so it would be dishonest for me to tell others what to do. Very rewarding when you find soulmates in your younger family.
It's not the compulsion or the enjoyment - it's the being able to lead.
As things break down - and she will live to see the whole morph in long hindsight - they will become more and more local. That requires leadership. It can be from a stage behind (read Raynal's Wrecked on a Reef, about the Grafton self-rescue on the Auckland Islands - the real leader, an amazing MacGuyver, chose to stay 2IC). But local young leadership is what will be needed - we oldies are too assumption-muddied. Both qualified with 'on average'; there will be duds and diamonds in both.
Clear thinking - systems thinking or at least lateral, and a strong grasp of relativities, will be helpful - but again, a smart leader can find a Merlin, Getafix, etc.
Leadership is a double edged sword.Not all leadership has been glorious. In fact it is so subject to the circumstances that requires it to actually feature that you could fill an encyclopaedia of its examples, workaday, brilliance, salvation, failure, pathos and tragedy.to list just a few. Cometh the hour, cometh the man, or lady, best to leave it at that.
yeah Foxy, and who are these so called wealthy people. A lot are farmers trying to make a living from a bit of ground.
Already people are complaining about high food prices. Many say "why are we paying so much for meat and dairy "
The other thing that is often said is "we have so much of this resource".
So do "they" expect farmers to provide for nothing in return?
If the present government has not removed that legislation then they need a kick up the arse. It makes them complicit with the previous government in so much that a well founded and vital law that all citizens are entitled to rely on, by way of protection, has not only been ignored, but defeated.
Uber DGM / investor Mark Spitznagel reckons the stock market will go down 80% ‘when this is over.' Spitznagel believes we haven’t entered the main event and the recent stock-market plunge is just a ‘trap’.
In 2024, he warned investors about not getting caught off guard when the stock market does turn for the worse, and end up being the “sucker” that sells when the market is down and buys when it’s up. He advocated having positions agnostic to market turmoil — a difficult ask for the average person.
“We’ve had our clients riding this bull market for years,” Spitznagel wrote on Monday. “All the doom and gloomers think it’s over and they have this figured out. Take it from a professional doomer, they don’t. And they definitely don’t have the right position for it.”
https://www.marketwatch.com/story/the-stock-market-will-go-down-80-when…
wow that guys next level DGM
Heard a crazy story this week. Colleague reckons he approached a local glassworks but their price was too so he went through a broker in Auckland who sourced the glass out of Sydney for about 20% less. When it arrived for construction it turned out to be originally from Whangarei. It went to Sydney then back to Northland cheaper than directly from local.
Possibly the number & rates of NZ middlemen clipping the ticket?
IIRC around Covid building material shortage/profiteering there were similar claims from people sourcing containerloads of framing timber & plasterboard from Oz
Possibly the number & rates of NZ middlemen clipping the ticket?
Sounds more like economies of scale. Large Aussie firm is going to do way more volume than a mom and pop in a small town.
Did the Aussies get a discount for a bulk order?
No shortage of panes in Australia
The People’s Bank of China set its reference rate at 7.2038 yuan against the dollar, the first time since September 2023 that the rate made the yuan weaker than 7.20 to the dollar.
Currency devaluation in full swing.
https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-0…
It's already devalued.
Economy has grown by thousands of percent in 30 years
Currency is worth about the same
Yep J.C that is how they will deal with it. They have always worked like this. Not sure devaluation will be the answer this time.
I think stopping rare minerals will have a greater impact.
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