Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Westpac has raised all its fixed rates. More here. HSBC raised its floating rate from 4.99% to 5.49%. The Police Credit Union also raised its floating rate, and its fixed rates. Bank of China raised almost all its fixed rates.
TERM DEPOSIT RATE CHANGES
Westpac has raised all its term deposit rates by between +10 bps and +20 bps. The Police Credit Union did too. And the Cooperative Bank also raised all their TD rates.
LONG-LASTING
CoreLogic says housing sales are the weakest they have been in a decade. They say the key drivers for this housing market slowdown are 'fundamental and longer-lasting'.
FONTERRA GETS A TICK
The Government says it will change Dairy Industry Restructuring Act to support Fonterra's shareholder-approved capital proposals. They say the updated law is to strike a balance between supporting Fonterra plans while introducing strengthened conditions on matters such as milk price setting.
TOO EXPENSIVE TO DO WITHOUT TAXPAYERS FUNDING FOREIGN OWNERSHIP
The NZ Green Investment Fund is providing a $20 million finance facility to support the deployment of electric bus fleets under long-term lease agreements with major operators in New Zealand. A further $30 million is being held in reserve to support additional uptake. The deal is designed to smooth the transition from combustion engine (ICE) to electric for operators, removing technological and financing risk through competitive pricing. By supporting a leasing pathway, these fleets will end up essentially in foreign (British) ownership.
INFLATED INFLATION
Aussie headline inflation jumped to 5.1% in the year to March, the highest annual level in more than 20 years. Economists said a May election campaign rate hike was now in play because it came in far above the 4.6% rate expected. Worse, the March quarter rate was 2.14% so the recent jump in prices is running far higher than the annual rate suggests. Even their "trimmed mean" rates came in higher than expected. This data will probably have an echo in New Zealand yields, keeping them elevated.
LIVINGSTONE RETIRES ON TOP
Giant Australian bank CBA (owner of ASB) said its chairman, Catherine Livingstone was retiring after six years on the board, five in the Chair role. She is being replaced by Paul O’Malley who was the CEO of BlueScope Steel until he retired.
GOLD HOLDS
In early Asian trading, gold is essentially unchanged from this time yesterday at just over US$1901/oz.
SWAPS HOLD
We don't have today's closing swap rates yet. They are likely to be just slightly higher today at the short end. The 90 day bank bill rate is unchanged at 1.97%. The Australian Govt ten year benchmark bond rate is up +1 bp from this time yesterday, now at 3.06%. But watch out for bond market reactions coming as the Aussie CPI data sinks in. The China Govt 10yr is unchanged at 2.85%. And the New Zealand Govt 10 year bond rate is up +4 bps at 3.60% but still above the earlier RBNZ fix for that 10yr rate at 3.55% (up +1 bp). The US Govt ten year is now at 2.73% and down another -8 bps from where we were at this time yesterday.
SINKING
Wall Street ended sharply lower with the S&P500 down -2.8% at the end as the day's sell-off built. Tokyo has opened down -1.9%. Hong Kong has opened down -0.5%. Shanghai has opened down another -0.3%. In the past five days, the Shanghai equity market is now down -8.3%. For the last month it is down more than -10%. The ASX200 is down -0.7% and the NZX50 is down a sharpish -1.2%. Pushpay gave up some of yesterday's gain. Fletcher Building and A2 Milk also have fallen sharply.
NZ DOLLAR LOWER
The Kiwi dollar is now at 65.7 USc and more than -½c lower than this time yesterday. Against the Aussie we are lower at 91.8 AUc on the same basis. Against the euro we are unchanged at 61.7 euro cents. That means the TWI-5 is now at 72.6, and down a net -30 bps from this time yesterday.
BITCOIN LOWER
Bitcoin is -5.3% lower than this time yesterday at US$38,373. Volatility in the past 24 hours has been very high at just on +/-4.0%.
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51 Comments
I thought I would share some news.
Since 1 April (tax year end) I've been selling off my crypto. First for taxes (big tax bill yikes), then started to get a bad feeling and a person who I admire in the crypto / market space told me this is a year to protect your capital. So I have sold 90% or so of my crypto (have been acquiring since 2017). A lot is in stable coins soon (ironically gaining value as its USD based). A huge chunk went to repay all my mortgages so no more debt, and I have an emergency reserve as well.
For the first time ever (well except maybe once) I have been losing sleep over crypto. I ran the numbers and what I have left (-35% from the top) is 31 years of savings for me in a fairly high paying job. Don't want to lose that!
Bullish long term so will be DCAing back in with my pay cheque. Might take time off work too. Its been a fun ride but I need a rest from this market!
In terms of the level of stress I was under, the worst day in crypto I lost over NZD $1M. (The best day was up $660k and there were more good days than bad but that ratio has been changing recently)
Got cocky and made a few (expensive) errors which made me think my cognition and rational was off.
Ran the numbers. I'm financially independent but only just. Lose anymore and I potentially lose my freedom. More fun being at work when you can leave permanently after a bad day :)
Still made x12 on my original investment but its been surprisingly stressful selling out.
Actually I'll change my response.
Basically I was up all night, couldn't sleep, heart pounding, bathed in sweat as to whether I called it quit. I decided at that point the feeling I was going through meant I was over-exposed and I needed to sell (at least half) if I ever wanted to sleep again.
Thanks for sharing Wolfie. The crypto space is maturing. I've slowed down my accumulation (dca) and mentally prepared for BTC to go well under usd20k. Still not selling BTC in particular even below my break even point. Now that I'm in the 1-10 segment, I want to keep my position as a long term hodler. Re tax, I'm fortunate enough to have arranged my affairs so that I'm not liable for anything. On that note, going through some serious KYC for a corporate account in Japan. The FSA in Japan is so far ahead of any jurisdiction. It can be a bit nerve-wracking making sure all the details match but I'm glad I'm set up legally and independently.
Thanks! Yes it did really well. Life changing really (well sort of).
But the loss / stupidity of not selling closer to the top is making me kick myself. Not BTC so much but all the other crazy coins I had.
Will be back to accumulating if I can though. I'm very bullish for a 2-3 year outlook.
This is me, lmao. I've just signed on to recapitalise a project and help out a dev team relaunch! Could be a turbulent market for a while, but I'm betting this is the chance to make new connections. I could have had quite a comfortable year on what I was up by, but now I'll take a haircut if I sell, so I might as well keep going!
Besides, eat work and sleep gets boring and I enjoyed the community aspect of it all. Why not try something a little different? You never know, something really dumb might happen.
It’s highly addictive, i can totally relate. Also re the sleepless nights. To get out is terrible difficult. Fear of missing out. However, I got my life back and peace of mind and attention for the people around me and also focus on those things I reckon are important in life. There’s a lot in life that is more important Than (potentially) making more money ;)
Funny how Crypto suddenly came up I was about to comment on how stable it has been for weeks and it was starting to look like a "Currency" then all of a sudden it tanks along with the stock market. Looks to me its still highly speculative like shares and once people realize they cannot play with it and make money on the ups and downs its going to lose all of its appeal.
Lonewolf
From what you say regarding estimating your tax and having it in NZD when required by IRD:
Either: Won't you know what your profits from sales/net trades during the year are, therefore your expected tax liability at the end of the year, and putting that money in interest bearing until due,
Or: Due to amount and frequency of your trades, do IRD consider that you are acting in the business of trading in cryptos and as such you are subject to provisional tax although some of that profit may not be realised?
If yes to the later; I see the difficulty in estimating your profit/income and having the money in NZD when due . . . or arguing the case with them.
Cheers
P.S. Calculating income and provisional tax on rentals was straight forward . . . maybe you should look at property investment as a less stressful alternative? :) :) ;)
Most of it, I still have a bit in there.
Long term I see it going up and up vs fiat. Short term its tied to tech stocks and algo-trading.
I certainly want to hold NZD long term.
I'm pretty comfy now so will still be buying (just want a smaller size). Ironically I haven't bought any BTC since last year sometime.
Makes total sense to me I would be pulling out the lot if I had made good money and putting it in something "Real" especially if it was something like a house and wiping out the remaining mortgage seeing as we are certain to see interest rates rise. Why a huge number of people didn't pull the plug when it peaked at like $67k is beyond me. Greed I guess you always think its going to go higher.
Yeah you could say the same of any market - shares, real estate, crypto, bullion, whatever - nobody can ever know in advance what the peak will be, they only know in retrospect. Last year there was a lot of expectation BTC was going to US$300k and more, with many of the big institutional investors piling in, not to mention Elon.
JimboJones "Isn’t it ironic to be taking your money out of crypto considering it’s meant to be the safe haven saving us from the printing presses of fiat?"
I was also thinking this. I have about 2% of my portfolio in crypto and have always seen it as pure speculation; most of my investments are elsewhere. But converting your crypto to fiat means you're now losing about 7% pa due to inflation, so really it should be invested in something else...but what? Bullion has been disappointing in this high-inflation time. Sharemarkets are looking shaky (and crypto unfortunately has become correlated with tech stocks). Residential real estate looking to take a big hit, with eye-watering increases in mortgage rates. Industrial real estate is still holding up well, but for how long? When are the businesses that lease the warehouses and offices going to start feeling the pressure of massive inflation and start laying off staff or going bust? Strange times.
And the fairytale of low inflation came to an end in Oz today, joining the rest of the globe. Cash rate will rise now, 18 months ahead of 'experts' at RBA. Well done posters here for calling it right. I see ATM hit 4.70 today. Discretionary stocks are a place you dont want to be.
if you believe in a softish landing -- OCR topping about 3 3.5% max --- banks look good --- but an OCR of say 5.5% - thats a fairly hefty write down of banks asset sheets -- and probably significant repayment stressors -- mortgagee sales etc --- but wipe 25% off the balance sheet in property would make for a very nasty balance sheet at all our major banks-- would the increased margins compensate for that ? not sure
I am hoping that RBA hold their rates low if we carry on hiking. At some point we will look over the pond and realise that our inflation is tracking up with the OCR, whilst theirs is subsiding more quickly. Maybe then economists might realise that the world does not work how they think it does. Although history would suggest that they will just come up an explanation that enables them to carry on using their flat earth models.
The answer to that Gummy is obvious. The RBNZ are protecting the property market (yet again) by giving all those on fixed mortgages that come out this year a chance to refix for 3 to 5 years at lower rates. This will kick the can down the road for another 3 years and by then all the current suspects will have left their current positions and someone else will get the blame.
A real mixed bag as well in Australia with transport and education both leading rises. However many other heavily weighted items, like rents, remained subdued.
Typically RBA refers to the trimmed mean as the "inflation rate."
Gee, more weakness in NZ shares. Think it was a good call to sell in October. Will look to pounce again sometime in the coming year.
https://www.nzherald.co.nz/business/market-close-nz-shares-fall-to-19-m…
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