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
SBS Bank has cut some fixed home loan rates very sharply. Their three year fixed rate is now 5.99%. More here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Nothing here today.
'RESILIENT & 'STABLE'
Ratings agency Fitch says they expect New Zealand’s GDP growth to remain subdued during 2024 and joblessness to rise as a result, although the unemployment rate should remain resilient. As a result, they judge that the standalone credit profiles of New Zealand's four largest banks - ANZ, ASB, Bank of New Zealand and Westpac (all rated A+/Stable/a) – continue to be resilient amid this challenging economic backdrop. This reflects those banks’ stable financial profiles, underpinned by their entrenched market positions, which allows them to operate simple business models, they said.
RISING STRESS
In Australia, ASIC released data that showed 1131 businesses went bust in March, the most since they started collecting these statistics in 1999. The latest March data is up from 830 in March 2023, and just 439 nationwide in March 2021.
CPI STAYS ABOVE 2%, BUT EASES MARGINALLY
Japan's March inflation rate eased to 2.7% from 2.8% in February. This was what markets were expecting. Their core rate, excluding food and energy, dipped to 2.6% and a shift lower by a bit more than was expected.
SWAP RATES HOLD
Wholesale swap rates are likely to be little-changed again today, perhaps on the soft side. Our chart below will record the final positions. The 90 day bank bill rate is little-changed at 5.64%, a level it has hovered around for 30+ days. The Australian 10 year bond yield is back down -7 bps at 4.29%. The China 10 year bond rate is still at 2.27% and an all-time low. The NZ Government 10 year bond rate is down another -7 bps to 4.90% and the earlier RBNZ fix was at 4.93% and up a minor +1 bp. The UST 10yr yield is down -3 bps at 4.55%. Their 2yr is holding at 4.92%, so the curve is now -37 bps and -3 bps more inverted.
EQUITIES SIGNAL "BUY THE DIPS" (!!?!!)
The NZX50 is heading to a -0.9% retreat near the close of trading which will mean it has lost -1.6% for the week. But that is tame compared to the ASX200 which is down -1.3% in early afternoon trade and heading for a -3.1% weekly rout. Tokyo has opened its Friday trade down -3.1% and heading for a more than -5% drop for the week. Hong Kong opened today down -1.3% and if that holds it will be down -2.0%. Shanghai is down -0.4% at its open but they may end the week higher. Singapore opened down -0.7%. All this comes after Wall Street closed its Thursday session with the S&P500 down -0.2% building its four-day retreat to -3.1%. Tomorrow's trading could get ugly.
OIL GIVES UP RECENT FALLS
Oil prices have risen +US$1.50 to just on US$84/bbl in the US while the international Brent price is now just on US$88.50/bbl. An Israeli retaliation on Iran directly today is shifting this dial. These levels only take us back to week-ago levels however.
GOLD FIRMS WITHIN RECENT RANGE
In early Asian trade, gold is up +US$12 from yesterday, now at US$2385/oz.
NZD DEVALUES
The Kiwi dollar has retreated from this time yesterday to 58.7 USc and down -½c. Against the Aussie we are up +20 bps at 92 AUc. Against the euro we are down more than -¼c at 55.2 euro cents. This all means the TWI-5 is now at 68.6 and down a bit more than -30 bps.
BITCOIN FALLS UNDER US$60,000 THEN RECOVERS
The bitcoin price has fallen today from this time yesterday, now down to US$61,844 and a minor -0.3% net retreat. But in between it got down as low as US$59,665 before recovering. Volatility of the past 24 hours has been high at just under +/- 3.8%.
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18 Comments
Actually it's worse than that
Australia's corporate insolvencies have hit their highest level in at least 25 years
The monthly number of insolvencies has reached the highest level since ASIC began compiling statistics in 1999.
https://www.livewiremarkets.com/wires/australia-s-corporate-insolvencie…
Oil prices have risen +US$1.50 to just on US$84/bbl in the US while the international Brent price is now just on US$88.50/bbl. An Israeli retaliation on Iran directly today is shifting this dial. These levels only take us back to week-ago levels however.
2009 US Policy Paper Planned Current Israeli-Iranian Tensions
Crux of the situation as explained in one tweet (or whatever a post on X is called now)
The construction industry remains a key driver of rising insolvencies.
There is an unprecedented backlog of construction work at present, but builders that offered fixed-price contracts during the pandemic have been squeezed by high inflation
If this were true, at least in Australia for the time being, it is only the zombie businesses meeting their overdue demise.
Independent economist Justin Fabo said the spike in insolvencies probably reflected a long-expected catch-up after a slump during the pandemic when the Australian Tax Office stopped pursuing debts and the government doled out hundreds of billions of dollars in subsidies.
Mr Fabo noted while the total level of corporate insolvencies was at a record level, insolvencies as a percentage of total companies was still below long-run trends (though on a strong upward trajectory). Insolvencies as a portion of companies registered is at about 0.3 per cent.
“A lot of what we’ve seeing at the moment is still back-up from COVID,” he said. “The ATO stopped chasing businesses, the government handed out money, both of these things are reversing and waning.
“At least some of those businesses would have been bankrupted over the past few years in normal circumstances, so it’s a bit of a delay.
https://www.oneroof.co.nz/news/lucky-first-time-buyers-pick-up-wellingt…
Bought in 2013 for 600,000.
Renovated and heavily marketed.
At peak estimated to be $1.6M
Put up for sale for $1.1M. sold for at least 10% less than asking price.
What crash?
Bought 2013 for $600. Sold 2024 for $1m(?)
Gross r.o.i per annum: 4.75% ... Take off reno costs. Probably less.
Not a stand out example of a crash.
But an excellent example of a quite special property that can not fulfill the promise of 'doubling every 10 years' (which requires a gross r.o.i per annum: of 7.2%).
I wonder how many of these houses actually sold at their ridiculous peak estimates though. Our Wellington property peaked at $1.6M too and there's no way anyone would have paid that much for it.
FWIW the various sites currently put it at between $1.04M and $1.21M, and personally I'd say it's toward the lower even though its a more broadly appealing property than the one above (villa closet to the CBD).
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