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
ASB led today's home loan rate cuts, but there were also reductions from the Bank of China, ICBC, and Kookmin Bank. Details here. The Cooperative Bank cut all its fixed rates too. As did Westpac. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
There were many more term deposit rate cuts from many institutions today. We have summarised them here. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
THE DCS IS ALMOST HERE
We have a detailed explainer about the Deposit Compensation Scheme (DCS) with comes into force on July 1, 2025, just 74 days from today, and well within the expiry date of most term deposits.
NO TRADABLE INFLATION, BUT NON-TRADABLE INFLATION AT 4%
Annual inflation rose to 2.5% in the March quarter. That is up from 2.2% in the December quarter, and up from the expected rise of 2.3%. Stats NZ says the proportion of large price increases have fallen to a five year low, even as quarterly inflation pushes higher due to petrol prices and tertiary education.
THE POWER OF MONOPOLY
Deep within the CPI data is a series that tracks central and local government charges, These rose +10.7% in the year to March 2025, far outpacing everything else. Data on this series goes back 35 years to 1989 and in that time these official charges have never jumped as much as that before. It is a bit ironic that this surge is coming as the Coalition is saying it is running New Zealand's version of the DOGE initiative.
JOB ADS YET TO GIVE POSITIVE SIGNALS
Seek says job volumes were flat in March but rose on a quarterly basis. And that qualifies to be the 'best' outlook in over two years.
EYES ON THE PETROL PRICE
A fall in the US$ cost of crude, and a rise of the NZ dollar should be making the petrol pump prices lower. But not noticeably yet. In NZD the cost of Dubai crude is now its lowest since late 2021. Pump prices are +6% higher than that 2021 benchmark. But in the meantime, government charges & taxes have risen, so 'we' aren't getting that benefit.
NZX UPDATE
As at 3pm, the overall NZX50 index is up +0.4% today. That means it is down -0.7% for the past week, and down -7.3% since the start of the year, and up +2.1% from this time last year. Heartland, Vista, Stride, and Serko lead the gainers as Tourism Holdings, Kathmandu, Hallensteins, and Contact all drop.
THE COST OF A BAD REPUTATION
Tourism Holdings has a significant business related to visitors travelling to the US. Sadly for them, the reputation for travel to the US is in the Trump toilet. They say business in this sector is down about -50%. Their share price has tanked. They expect very much lower profitability.
STRONG DEMAND, LOWER YIELDS
There was $500 mln in NZ Government bonds put up for tender today in two maturities. In total they received 108 bids worth $1.6 bln of which 29 bids were successful. The May 2028 bond came in with a yield of 3.29%, down notably from the 3.85% at the prior equivalent event six weeks ago. The May 2034 bond came in with a yield of 4.53%, little-different to the 4.59% at the oprior equivalent event four weeks ago.
THE PAIN IS ALL AHEAD OF US
Ratings agency Fitch has make a sharp cut to its global growth forecasts due to the Trump-inspired tariff war. It says the US expansion will slow to a crawl as a result. And that because China's growth is a third dependent on global trade, they will be hit too. Spillovers will be felt far and wide, they say.
SWAP RATES STILL ON HOLD
Wholesale swap rates are probably little-changed again today. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -1 bp at 3.48% on Wednesday. The Australian 10 year bond yield is down -5 bps at 4.29%. The China 10 year bond rate is up +1 bp at 1.65%. The NZ Government 10 year bond rate is down -9 bps at 4.57% from this time yesterday while today's RBNZ fix was at 4.54% and down another -6 bps from yesterday. The UST 10yr yield is now just on 4.31% and down -2 bps from this time yesterday. Their 2yr is down -1 bps at 3.81%, so that positive curve is still at +50 bps.
EQUITIES MIXED
The NZX50 is up +0.5% in late Thursday trade to end the week. The ASX200 is also up +0.5% in afternoon trade. Tokyo has opened up +0.9% in early Thursday trade. Hong Kong is up +1.1%, while Shanghai is up just +0.1% at its open. Singapore has opened up +1.3%. On Wall Street, the S&P500 ended its Wednesday down -2.2% in a tough tech-inspired selloff.
OIL RISES IN USD
The oil price is up +US$2 from yesterday and now just over US$63/bbl in the US, and just under US$66.50/bbl for the international Brent price. Sellers are tiring of having its price tied to a depreciating greenback. It's not rising viz-a-viz other currencies (like the NZD).
CARBON PRICE DROPS
The carbon price is -50c lower today, now at NZ$49.50/NZU. That is its lowest since July 2024. 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 HITS YET ANOTHER HIGH
In early Asian trade, gold is up +US$67 from this time yesterday, now at US$3333/oz, a new high.
NZD SAYS UP
The Kiwi dollar is up +20 bps from this time yesterday, now at 59.2 USc. Against the Aussie we are unchanged from yesterday at 93.1 AUc. Against the euro we are also little-changed at 52 euro cents. This all means the TWI-5 is now at 67.7, up +10 bps from this time yesterday.
BITCOIN ON HOLD
The bitcoin price is up an insignificant +0.3% from this time yesterday, now at US$84,190. Volatility of the past 24 hours has been modest at just under +/- 1.3%.
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17 Comments
Tourism Holdings has a significant business related to visitors travelling to the US.
Is this business relevant in 2025? I'm assuming the business is similar to what travel agents (used to) offer. It is a space that I've long thought should have gone the way of the Dodo.
There's still a monied chunk of the population that like interacting with other humans.
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Could be a lot of tourism rental equipment going cheap in the States
Then again the locals might be living in them.
they do it in communities off grid in the desert, no tax, no rates, and protect themselves with guns
Aye, protect each other with guns, but on a whiff and a whim, kill each other with guns. The violence and mayhem in America, drug fuelled and rampant, has turned the whole damn shooting box into what was once secluded to the Wild West.
You can also go camping in downtown LA
Doubles as a haunted house with a Walking Dead theme.
I could show you similar places in NZ, no guns but real scary dogs.
Wow. Things appear to be blowing up while people remain oblivious to what's going on. Game of mates and absolutely zero accountability.
UBS: If we report these swaps we inherited from Credit Suisse, the financial system will collapse.
A CFTC staff no-action letter is a written statement issued by the staff of a division of the Commodity Futures Trading Commission (CFTC) or its Office of the General Counsel. In such a letter, the staff states that they will not recommend the Commission take enforcement action against a particular entity or individual for failure to comply with specific provisions of the Commodity Exchange Act or CFTC regulations, provided certain conditions are met.
The CFTC staff issued a no-action letter regarding the transfer of legacy swaps as part of the UBS Group and Credit Suisse Group merger. The letter clarifies that the staff will not recommend enforcement action against certain UBS AG London Branch swap dealer counterparties for failing to comply with uncleared swap margin requirements, nor against UBS AG or its counterparties for failing to comply with swap clearing requirements for these transferred swaps.
AFR takes on the Aussie banks and their shenanigans blocking their own customers' use of their own money. In this case, moving funds to a crypto exchange.
“Once funds are transferred into a crypto exchange, they are virtually untraceable and the chances of recovery are very low”
- Anna Bligh, chief executive of the Australian Banking Association
What Bligh is saying is complete nonsense. Fiat funds sitting on a reputable Aussie crypto exchange like Independent Reserve are not really any different to funds sitting in a bank account and fully visible and traceable.
“It’s an approach that treats everyday Australians like criminals, and it’s costing us innovation, investment and basic financial freedom. Less than 1 per cent of digital asset transactions involve fraud or money laundering, far lower than fiat currency at 7 per cent. There should be no reason that legitimate web3 businesses should be treated differently to any other sector."
“Many of the very same banks are trading crypto through their institutional desks, recognising the legitimacy and opportunity of the asset class, while retail and business customers are penalised for doing the same.”
- John O’Loghlen, who runs the Aussie operations of Coinbase
https://www.afr.com/technology/bank-crypto-crackdown-leaves-customers-s…
'and in that time these official charges have never jumped as much as that before'
I've told you why that was going to be, and is, DC.
And it's not because they are 'monopolies'- they were always that and more than they are now. And they are public service, not profit-takers.
No, David - we are cresting the Limits to Growth, and from here on in, 'costs' will outpace 'incomes'. What a pity no NZ scribe is brave enough to broach that subject - maybe that's why trust in the MSM is at an all-time low, and dropping.
Ray Dalio - we're facing breakdown of the monetary system on top of recession.
https://www.youtube.com/watch?v=Topa3LKgolw
Scarfie passed me the link, I agree with him if we can get us Deficiets down to 3% its possible we get through.
But that's a lot of milk sucking to remove from the teat.
China also faces similar breakdowns, lets hope they do not invade Taiwan as a distraction as our export markets will close overnight
lets hope they do not invade Taiwan as a distraction as our export markets will close overnight
I'd have thought the increased chance of a thermonuclear exchange would be more concern but if it's just the economy that's optimistic.
Dalio is a mile away.
Sorry - he may know more than he projects, but what he projects is falsely-based.
Edit - he seems nearly incoherent. Not logical/sequencing, that's for sure.
AFR -Australia’s housing crisis is about NIMBYs not negative gearing
Behind their headline appeals to young home buyers, the Labor and Liberal housing plans recognise that NIMBY supply constraints are the biggest problem.
so once they build lots of townhouses no one wants...
they are indeed a few years behind NZ...
Read this. Seemed like a takedown of Steve Keen. Stevo often the butt of institutional trolling.
"...so once they build lots of townhouses no one wants...
they are indeed a few years behind NZ..."
Indeed. I have just returned from a week in Christchurch.
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