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/LOAN RATE CHANGES
WBS trimmed its 2 year rate slightly today (-5 bps). Nothing else to report.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.
MOST BUSINESSES <20 EMPLOYEES
New data out today shows that almost three quarters of all the 49,000 businesses with six or more employees have less 20. But regulators assume they are like the 4% who have 100 or more. (That is probably because the regulators themselves are very large organisations and assume everyone is like them.) The only industries where more than 10% are "large" (ie 100+ employees) are the utilities, financial services, and "Administrative & support services" (lawyers, accountants & consultants)..
LOTS AVAILABLE, FEW BUYERS
Auction rooms just had their third busiest week in more than a year last week so there were plenty of properties on offer. But still only a third sold under the hammer.
WE NEED YOUR HELP
This is the last week you can take our insurance survey. We are very keen for you to participate if you can and haven't already. More here.
UNLIKELY TO WIN
The Insurance Council wants you to know that they are upping their game on 'transparency'. Of the 1.2 million claims made each year, only around 150 complaints are referred to external dispute resolution schemes to make a decision, they say. In 2022, only five of 143 complaints were upheld in the dispute resolution processes in the customer's favour.
YOU ONLY NEED TO WATCH 4 THINGS
Measuring inflationary pressure from the labour market can be improved by watching a narrow set of four high-quality indicators, an RBNZ research paper shows. They are: 1) the job transition rate (the share of workers switching between jobs), 2) the job vacancy-to-unemployment ratio, 3) the unemployment rate, and 4) a survey measure of labour as a limiting factor for business production.
HOLDING FAVOURED
Despite relatively high issuance and holdings ($191 bln), trading in NZGBs is modest, averaging less than $30 bln/week. That is in contrast to the over $40 bln/week traded early in the pandemic, and $50 bln/week in October/November 2022.
SWAP RATES LITTLE-CHANGED
Wholesale swap rates are likely to be little-changed today. Our chart below records the final positions. The 90 day bank bill rate is down -1 bp to 5.63%. The Australian 10 year bond yield is unchanged at 4.02%. The China 10 year bond rate is unchanged 2.32%. The NZ Government 10 year bond rate is down -4 bps from this morning at 4.60% and the earlier RBNZ fix was at 4.55% and down -6 bps. The UST 10yr yield is little-changed at 4.21%. Their 2yr is now at 4.60%, so the curve is now inverted by -39 bps, little-changed.
EQUITIES RISE LOCALLY
The NZX50 has followed up last week's good gains with another +0.7% in late trade today. KMD, FPH, AIA and FBU are all booking outsized gains. The ASX200 has started its week up +0.7% in afternoon trade. Tokyo has opened down -0.7%. Hong Kong has started up +0.2% while Shanghai is down -0.1% at its open. Singapore is down -0.3%. The S&P500 futures suggest that Wall Street will open little-changed from Friday's close.
OIL PRICES FIRM
Oil prices have risen +50 USc today to US$81/bbl while the international Brent price is now at US$85.50/bbl.
GOLD FIRMS
In early Asian trade, gold is up +US$9/oz from this morning at US$2174/oz.
NZD HOLDS
The Kiwi dollar has firmed slightly since this morning's open, now up to just over 60 USc. Against the Aussie we have stayed down at 91.9 AUc. Against the euro we are unchanged at 55.5 euro cents. This all means the TWI-5 has remained at 69.3.
BITCOIN FIRMS
The bitcoin price has firmed since our morning open, now at US$66,671 abd up +1.9%. But volatility of the past 24 hours has been high at +/- 3.0%.
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42 Comments
The red tape and bureaucracy lumped on these small businesses is a massive burden, DS needs to get rid of this management overhead.
Re Housing, the market is trying to form a base, but buyers not prepared to make an offer unless its under their terms, I cannot understand why more property is not traded in chains like the UK..... It may well become a more common form of sale, that said not much is actually selling...
Given the lack of agreed value (ie sales), perhaps actually a lack of purchasing ability (ie ability to finance at 9% test rates), the base may well be lower then current stats suggest (ie the crash continues).
The mighty Chris Joye on how central banks delayed rate increases after the pandemic on the basis they could not forecast the future, but now use rubbery projections to rationalise rate cuts.
Well worth a thorough read. Few easily digestible snippets:
And I get it: there are many folks who drank the low-rates-for-long Kool-Aid – zombie borrowers and investors in growth equities, venture capital, private equity, commercial real estate, private debt and junk bonds – that are petrified by the high-rates-for-long alternative that is becoming an ineluctable reality.
There are few credible arguments as to why rates here [Aussie] should be much lower than our peers, such as Britain, Canada, New Zealand and the US, other than a dovish desire not to offend the sensibilities of those who seek unnaturally low unemployment.
The concern is that history rhymes, and we find that central banks have once again underestimated the durability of this inflation cycle with adverse consequences for many assets.
https://www.afr.com/wealth/personal-finance/central-banks-may-be-repeat…
Fit the narrative and the data to the institutional behaviors that the sheeple want.
Mind you, any sane Australian should be outraged what Mad Albo is doing with migration. People are too busy to do anything about it. Pauline Hanson seems to be the only person making any sense.
Joye is one of the few commentators that understands the harsh reality of high interest coupon payments on a highly leverages borrower... and having a mis-matched cashflow to support said payments.... it always ends badly as the buyer of the asset wants positive cashflow, ie 35-50% asset price reduction.
Agreed. Those slowly waking from their drunken debt binge are about to find that "Catching Fire" is not just a movie. Talking to several accountant friends over the weekend. They both mentioned that their respective firms had groups of property developer clients that are a less polite word for... "buggered".
Cash is about to be king again...finally.
Normally last in, gets proper f^%^ed
We teach our kids this with musical chairs, also known as Trip to Jerusalem. Not sure why its also called this, maybe its the Come to Jesus moment..... when you realise there is no chair left. Or no one turned up to your auction / open home !
Only 30% sales is one thing, many had a single bid to sell, but the number of properties which got no bid NOT EVEN A CHECKY LOW ONE shows the market is doomed to gap lower.
This time a year ago, the same auction success rate was being witnessed, but currently 25% more are selling above valuation (don't know why we need to put things in bold, makes no difference if you're shouting the words or saying them).
Thats not to say there's no dip coming, because we don't know how bad the recession we're entering is, or how long.
But there's also trying to overlay each and every headline with what you're wishing will occur.
Actually from day dot, while the masses here were thinking high rates would instantaneously cause prices to crash (highly improbable), I attested we'd get a bad recession first. At no point have I ruled out a recession, I've been claiming the exact opposite.
We now have the recession before we've seen a significant fall in prices. Just as I said. Once sales, margins and jobs erode enough, house prices will follow.
The high rates are there to destroy demand, and kill off the marginal borrowers across the entire economy. A better question for you would be how long a recession do you think we'll have, while retaining the high cost of borrowing? Years?
Of course that’s what we should do, or should I say should have done (long ago). Labour had their big chance and wasted it. Hipkins ranting on NOW about tax reform really annoys me.
I think it’s unlikely over the next few years, but if things really turn bad you never know
never waste a crisis
Despite relatively high issuance and holdings ($191 bln), trading in NZGBs is modest, averaging less than $30 bln/week.
RBNZ has pre-extinguised $879 million ahead of the imminent redemption of the $13.950bn 0.5% 15/05/24 issue.
Link - Government bond repurchases.
Some good observations from former employees
In his experience, employees had to ‘stay in their lane’. Suggestions or contributions beyond that were generally unwelcomed.
’Increasingly, staff are managed by people calling themselves’leaders’ who only want the outcomes that have appeared in previous documents. Senior leaders are often not interested in good ideas, connections to other issues or innovative thinking’.
Not often I agree with Steven Joyce, but I agree staff numbers there should be halved
Thought Leaders are rarely capable of thinking on their own HM
FFS Like I need someone to lead how I am thinking least I disagree with their ideology or thinking...... normally they have no domain knowledge either.....
I cannot imagine how many people NACT need to remove from MBIE to restore health to that operation.
You've described the culture of just about every large organisation on the planet. What get's measured get's done.
We can take this offline House Mouse, you're not in the wheelhouse so don't know the painpoints. I'm happy to whiteboard it with you but there are a lot of moving parts so please stick to the low hanging fruit.
Many Government organizations are suffering from mission drift. They should really have a deep dive into their core competencies and focus on rightsizing their models. Drilling down into these pain points can ensure they're addressed effectively and these organizations should leverage their synergies to help move the needle.
Corporate buzzword bingo never gets old.
Check very carefully that the email is genuine.
Absolutely do call them but using a number from their main i-net page and not from any number in the email.
If the email contains a link to the bank's web site - do not click on it - unless you've ICT savvy enough to pre-check where it is taking you.
Even if you're ICT savvy and the link takes you to a logon page - be extremely suspicious - and do not log on.
Banks should be providing access to the functions you require once you've independently logged on from their main i-net page.
Missed this the other day. House builder Selah in liquidation. I don’t buy that’s it’s a health issue as you’d surely finish what you had started.
https://www.stuff.co.nz/nz-news/350220022/upmarket-building-company-fails-leaving-homes-unfinished
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