Talk Money with Tony Field – September 1, 2015
Higher petrol prices look likely in New Zealand thanks to rocketing oil prices and the falling kiwi dollar.
Crude oil prices have soared 8 percent this morning and are up a total of 27 percent in the last three trading sessions.
The latest spike in prices came after new figures showing US production is weaker than expected.
OPEC also said that it is "ready to talk to other producers to achieve fair prices".
New Zealand does not import crude oil, but instead buys refined fuel traded on the Singapore market.
But the higher crude prices will impact the cost of refined fuel.
On top of that, the cost for New Zealand importers will rise because our dollar is falling.
The kiwi is down almost 2 percent overnight to 63.38 US cents.
There is little good news to support the Kiwi. The ANZ survey of business confidence was very weak, with the headline confidence index falling to -29.1 in August, the lowest level in six years. That outweighed the positive news of a 20 percent rise in building permits.
The sell-off in the kiwi accelerated overnight. It is down against all the other major currencies. That includes a 1.5 percent fall to 89.06 Australian cents.
The kiwi is 1.6 percent down against the pound at 41.29. It is 2.4 percent lower against the euro at 56.47. The kiwi is 2.35 percent down against the yen, at 76.83.
The New Zealand dollar's next move is likely to be governed by tomorrow morning's latest Global Dairy Trade auction. The futures markets suggest a rise of more than 10 percent is possible. But the volatility in the financial markets means that is not certain.
US stocks finished lower to end what has been their worst month in three years.
The Dow Jones Industrial Average fell 114 points, or 0.69 percent. The broader S&P500 lost 16 points, or 0.84 percent.
They both finished the month down more than 6 percent.
The tech-heavy Nasdaq slipped 1.07 percent today.
A survey has found many people approaching retirement are unsure about how to manage their KiwiSaver funds when they reach 65.
The survey has been released as part of Money Week by the Commission for Financial Capability and the Financial Markets Authority.
Forty-eight percent said they intend to keep their money in KiwiSaver; 26 percent said they would withdraw their money. Of that group, 10 percent said they intended to spend it.
The remaining 26 percent did not know what they would do with the funds when they reached retirement age.
Only around half of those surveyed felt the information available from their KiwiSaver provider was useful for making decisions about their retirement savings and for working out how much they will have when they are 65.
Only 44 percent felt they had enough information to work out what level of income their lump sum was likely to generate when they retire.
The FMA says it will work with providers to ensure there is good, accessible, information.
The study found three quarters of those interviewed, who had savings or investments, were interested in a product they could use to invest their lump sum and receive a guaranteed weekly or fortnightly income during their retirement.
The Commission's David Boyle says: "There seems to be a genuine view from this survey that some certainty of income is important to people's financial wellbeing during their retirement years.
"One of the most important factors for KiwiSaver members today is for them to determine what income they are going to generate from their KiwiSaver balance tomorrow."
The survey also showed those who either had a financial plan, or had worked out what they needed as an income on top of NZ Superannuation, were more likely to choose more diversified investments with a higher allocation to growth assets.
The survey found that more women than men had signed up to KiwiSaver in the over-50s age group. However women were less likely to choose higher risk options, with more growth assets, for their funds.
For people looking for more information about how to manage their finances, the commission's website is a good starting point.
New and brighter-looking bank notes come into circulation today.
The $5 and $10 notes will start to replace the existing designs, which were introduced by The Reserve Bank back in 1999.
New $20, $50 and $100 notes will be introduced in April.
They feature the same people, animals and plants that are on the existing notes. But the colours are brighter, the fonts are different and the security features have been improved.
The bank says the notes will feature more Te Reo Maori, and will contain more sophisticated security features that will greatly enhance the overall design. They will be the same sizes as the current notes, and be made of the same flexible, durable plastic.
The bank says New Zealand has very low counterfeiting rates by international Standards. But the technology that is used to counterfeit notes has improved, so the RBNZ says it needs to strengthen its security features.
The RBNZ says the existing notes will remain in use after the new notes are introduced and both the current series and new notes will be legal tender.
But the older notes will be automatically withdrawn when they are returned to the Reserve Bank as part of the normal cash processing cycle.
The bank says it may take a few weeks or months for you to see one of the new notes when they first start circulating.
The bank says the new design features larger, bolder print showing the note's value. It has also introduced greater colour contrast between notes to help visually impaired people tell one note from another. The different denominations will still be of different sizes.