Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
Resimac raised its floating rates today.
TERM DEPOSIT/SAVINGS RATE CHANGES
Westpac has tweaked its TD rates for terms 4 to 12 months higher.
THE WORST OVER?
ANZ's latest Business Outlook Survey shows a big lift in confidence and overall sentiment, while cost and inflation expectations have dropped. 'Firms appear to be cautiously optimistic that the worst may be over', says ANZ.
AML BREACHES COST ALMOST $1 MLN
Sharebroker Tiger Brokers pinged in FMA court case after transacting $60.8 mln 'without proper checks and controls in place'. It has been fined $900,000 for these anti-money laundering breaches.
DEPOSIT TAKERS BILL PASSES
Parliament has passed the Deposit Takers Bill, meaning savers will have up to $100,000 of their deposits in any eligible institution guaranteed in the event that institution fails. Finance Minister Grant Robertson says the Reserve Bank and Treasury will now consult with banks and other deposit takes on the funding strategy and levy framework for the Depositor Compensation Scheme, which is intended to be up and running by the end of 2024. See more on the incoming deposit insurance regime here.
HERE'S A GOOD MODEL
The Banking Ombudsman gets fast-track fraud resolution undertakings from NZ banks. 'A nerve centre to disrupt scams' is what NZ can learn from Singapore and use here as fraud and deception crimes rise +77% here annually.
34% OF BIDDERS KEEP YIELDS LOW
There were 199 bids for the $400 mln on offer in the three NZ Government Boibd tenders today. They bid a total of $1.358 bln. Despite this heavy demand, yields were essentially unchanged from two weeks ago. That was because only 39 bids won anything, these bidders prepared to take a lower yield for the risk-free benefit of sovereign bonds.
BIG PROFIT JUMP
Stats NZ data for the 2022 financial year shows net profits for all businesses rose to $104 bln and a new record high - and +24% higher than in 2021, which was also a record high. The +$20 bln increase was the largest one year rise ever, and delivered an extra +$5.7 bln to the income tax take.
'BIG IMPROVEMENT'
Returns in 2023 Census indicate a significant improvement on 2018 figures, Statistics Minister Dr Deborah Russell said. As at 29 June, 4,560,486 people had returned their individual forms. That indicates an estimated individual return rate of 89% nationally, a significant increase from 82% in 2018.
FLYING COLOURS?
The 23 largest American banks passed the US Fed’s annual stress test, clearing a key hurdle for returning billions of dollars to investors. According to these results, those banks showed they can withstand a severe global recession and related real estate market turmoil and will be strong enough to come out intact. According to the Fed, "This year's stress test includes a severe global recession with a 40% decline in commercial real estate prices, a substantial increase in office vacancies, and a 38% decline in house prices. The unemployment rate rises by +6.4 percentage points to a peak of 10% and economic output declines commensurately."
FALLING FROM HIGH LEVELS
In Australia, there were 432,000 job vacancies in May, down -9,000 from February, according to new figures from the Australian Bureau of Statistics. While job vacancies have fallen by around -10% over the past year, they were still high – around +90% higher in May 2023 than in February 2020, just before the start of the pandemic. And staying in Australia, Mainfreight says the Aussie freight industry market has peaked and that conditions will worsen in the coming months.
SWAPS LITTLE-CHANGED
Wholesale swap rates are ending today probably marginally firmer. However, the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is unchanged again at 5.69% and still +19 bps above the 5.50% OCR. The Australian 10 year bond yield is up +3 bps from this time yesterday at 3.91%. The China 10 year bond rate is unchanged at 2.71%. And the NZ Government 10 year bond rate is still at 4.61%, and that is still higher than the earlier RBNZ fix which was down -3 bps to 4.51%. The UST 10 year yield is now at 3.73% and back down -4 bps from this time yesterday.
EQUITIES UNINSPIRING
Wall Street was little-changed on the S&P500 having shrugged off earlier pressures. Tokyo has opened its Thursday session up +0.5%. But Hong Kong is down -1.3% in early trade today, and Shanghai has opened down -0.2%. Worries about the Chinese economy are not fading. The ASX200 is unchanged in afternoon trade. The NZX50 is up +0.3% near the end of trade today.
GOLD RETREATS FURTHER
In early Asian trade, gold is at US$1903/oz and down another -US$12 from yesterday. Earlier it closed in New York at US$1907/oz and earlier still it closed in London at US$1908/oz.
NZD LOWER AGAIN
The Kiwi dollar is down another -½c from this time yesterday and now at 60.7 USc. Against the Aussie we are lower at 91.9 AUc. Against the euro we are softer at 55.7 euro cents. That means the TWI-5 is down to 69.4 and a -40 bps reversal.
BITCOIN DIPS
The bitcoin price has fallen today and is now at US$30,117 which is down -1.3% from yesterday. Volatility has stayed modest at just over +/- 1.0%.
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77 Comments
You'd think Tony would have remembered something. That occasionally, the very unexpected happens, contrary to everything that we see as normal, and whose to say, that's not now?
My father was a home builder in Christchurch.... He unfortunately had to place the business into voluntary liquidation around 1978...Mum naturally got depressed about the situation and sensibly went to the doctor. I asked her what he said. She said he told her to go and read a book. I asked what book? She said the Grapes of Wrath by John Steinbeck. I asked what is that about? She said, go find out for yourself. So, I did. I discovered it was about the experiences of common people during the 1930s Great Depression in the United States and the dustbowl in Oklahoma ...I found stories about the Great Depression to be fascinating and eventually discovered Tony Simpson’s book “The Sugarbag Years” which chronicled the experiences of Kiwis living through the Great Depression.
In all fairness, anyone could see that one coming. I told my partner to go 5 years but she only went 3 years. There is a strange psychological thing with long terms, people cannot face them. they take out 1 and 2 year terms as they see that as being the end of their mortgage, light at the end of shorter tunnel.
In the last 18 months, INZ has issued over 100k permanent visas to migrants under the 2021 Residence Visa scheme.
This should've had an impact on house prices more than temporary migrants flocking into NZ, but it did not.
Migration surge behind looming housing market pick up: ANZ | Stuff.co.nz
Also worth noting that ANZ’s forecast of a 3% rise is based in the HPI, not median values.
I think there’s a chance the median could rise 3-5% by the end if this year, but not the HPI.
The slump in shoebox townhouse sales will changes sales composition quite significantly, putting upwards pressure on the median value. At least in Auckland.
And even *IF* net migration numbers were high, all these economists seem to be missing the point that a large proportion of these low-mid income migrants won’t be able to buy.
People seem to expect figure to act instantly all at once.
If you taken in 100,000 migrants, how many will buy instantly? If they're from somewhere like South Africa or even more Third World like the UK, they possibly won't have the ability to buy immediately. It'll take years.
I think they're covering their asses so they can call the bottom, spur a rally and then point back to "petered out".
Maybe they're wrong and it will be nothing but up from here. I can't see it - but then again I don't rely on suckers rallys to pay my shareholders so what would I know.
Company profits are now only marginally lower than *total* wages and salaries.
Just think about that for a minute... It means that the average worker earns about the same per hour for their employer (and shareholders) as they earn for themselves.
Wage slaves are the peasants of the modern world.
Companies don't just sell labor into the market, otherwise, GST would just be ST. They put a markup on the goods part too. A component of that is they may through turnover get better discounts from suppliers than the single employee would get say they were self-employed.
Let me know when CBs start hoovering crypto!
Central banks | Gold Demand Trends Q1 2023 | World Gold Council
Gold has an inverse price relationship with the level of US Treasury real yields.
Stats NZ data for the 2022 financial year shows net profits for all businesses rose to $104 bln and a new record high - and +24% higher than in 2021
A 24% pa increase in NET PROFITS across all businesses is HUGE !!! Maybe that's why the pain of higher interest rates is not hitting yet.
High profits + high cost of money (interest rates) = higher prices. We are prolonging inflation in NZ through aggressive monetary policy and lax regulation of companies with market power. Other countries with much lower rates and more sophisticated approaches to price management are showing us the way. Denmark is back below 3%!!!
US yield curve inversion continues to deepen. 2/10 is now 100bps. Inversion far more severe than leading into any recession since the early 1980's.
US imports were sharply lower again. After a short-lived rebound back in January (remember soft landing?), imports have fallen sharply again. They dropped almost 3% in May alone, split btw industrial supplies and consumer goods. This is one reason why CNY is plunging. Link
Global trade recession hitting US exports, too. Total values in May were the lowest since Feb '22. Volumes are obviously much worse and it isn't helping struggling manufacturers as worldwide demand continues to weaken. Link
German rates stopped rising late October. ECB says this is "accommodative" contrary to its rate hikes. Yet, lending esp. to households in Europe has been the opposite of accommodative since...right after late October. https://buff.ly/3Nyw6kk Link
The Berejiklian report is tame compared to what's been going on in the NSW govt.
Warning: The following news link is disturbing but 100% fact based. Serkan is one of the better journos at getting amongst the muck in Australasia.
EXCLUSIVE: The state of NSW has experienced another major political implosion over the past few days. With its premier, Gladys Berejiklian, as well as deputy premier, John Barilaro, and high-profile minister, Andrew Constance, calling it quits before they were pushed over their close connection to separate corruption scandals involving dodgy questionable personal relationships and sly backroom deals, including on behalf of alleged child rapists and murderers, that have been raging on for years. Serkan Ozturk with all the wild details.
https://truecrimenewsweekly.com/berejiklians-burden-to-get-bigger-way-b…
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