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
Home loan interest rates are ratched up by two more banks. Kiwibank and TSB, although there are signs wholesale funding costs have stopped rising. More here.
TAP TURNED OFF
ANZ has put a temporary hold on high LVR lending.
DISCOUNT ENDS
The ANZ Personal Loan campaign ends today at 5pm with their rate for this facility rising from 10.95% back to 12.90%,
TERM DEPOSIT RATE CHANGES
Rabobank and Kiwibank both raised term deposit rates today, with the new levels by both topping market comparatives. More here. Update: TSB has also now too.
LAW COMMISSION RECOMMENDS CLASS ACTIONS LAW
The Law Commission is recommending a new Class Actions Act be developed to improve access to justice and efficiency in litigation. The Commission also says regulation and oversight of litigation funding is needed in NZ, citing significant barriers to accessing civil justice.
WELCOME UPTICK, EXCEPT FOR ERD
Last week the NZX50 participated in the global equity market recover, with capitalisation up +2.0%, the sort of rise we haven't seen for some time. F&P Healthcare (FPH, #1) rose +3.3% and Fletcher Building (FBU, #9) rose +6.7%. But the biggest weekly rise was for Skellerup (SKP, #30) which rose 11.2%. At the other end of the scale, ERoad (ERD, #50) is on the skids even further, losing a massive -14.4% in capitalisation last week. Since March 31 when it was added to the NZX50, their share price has fallen a massive -65% over those 90 days. It has been a disaster period for them.
DEFAULT
Russia has defaulted on its foreign debt. It can't pay largely as a result of sanctions inhibiting its ability to shift funds. It's their first default of foreign debt in 100 years. But during Russia’s financial crisis and ruble collapse of 1998, then president Boris Yeltsin’s government defaulted on $US40 billion of its local debt.
PROFIT STRESS IN CHINA
The struggles on China's industrial companies continued into May. In the month, profits were -6.5% lower than the same month a year ago, and it is little comfort that decrease was less than for April. That takes their year-to-date gains back to just +1.0%. The whole situation is actually much grimmer; manufacturing profits are almost -18% lower and utility companies -6% lower. The overall results are only restrained by profit surges in coal and other mining companies.
LIQUIDITY STRESS IN CHINA?
The Chinese central bank injected a total ¥100 bln (NZ$23 bln) into their banking system today, the largest daily injection since March 31, by a seven-day reverse repurchase at a rate 2.1%. to ease pressure from rising cash demand toward the end of the first half of the year. They started pumping more cash into the financial system on Friday. Demand usually surges towards the end of the quarter, when commercial banks also have to shore up cash positions for an administrative quarterly health check by the central bank. But the size of this may suggest more is at play this time.
SWAP RATES FALL
We don't have today's closing swap rates yet but they probably fell, and probably substantially. Treat with caution. The 90 day bank bill rate is up +3 bps at 2.81% today (and its highest in three years). The Australian 10 year bond yield is now at 3.72% and up +1 bps from this morning. The China 10 year bond rate is now at 2.84% and+5 bps higher. And the NZ Government 10 year bond rate is now at 3.89%, and down another sharp -12 bps from this morning and still lower than the earlier RBNZ fix for this bond which was also down -12 bps at 3.90%. The UST 10 year is now at 3.14% and unchanged from this morning's open..
EQUITY PRICES START STRONG
The NZX50 has continued last week's good form, rising +1.2% in late Monday trade. The ASX200 is up +1.6% in early afternoon trade. Tokyo has opened the week up +1.3% and Hong Kong is up +2.3% in very early trade. Shanghai has started its Monday session up +1.0%. The S&P500 futures suggests Wall Street could open tomorrow down -0.2% in a small pullback from the strong Friday close.
GOLD FIRMS
In early Asian trade, gold is up +US$9 from this morning's open at US$1835/oz.
NZD SOFTER
The Kiwi dollar is little-changed from this morning's open at 63.1 USc. Against the AUD we up at 91.2 AUc. Against the euro we are softer at 59.7 euro cents. That all means our TWI-5 is now down -20 bps at 70.9.
BITCOIN HOLDS
Bitcoin is now at US$21,095 and -0.6% below where we started out today. Volatility over the past 24 hours has been moderate at +/- 2.2%.
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45 Comments
Oh to be a public servant. No wonder our productivity is in the toilet.
"This paper outlines our intention to establish a Matariki Advisory Group to decide when and how a Matariki public holiday should be celebrated in Aotearoa, New Zealand, and to appoint to this group, each for an eighteen month term from the date of commencement:
...note our intention to appoint to the Matariki Advisory Group for terms of eighteen months each, from the date of commencement;
...5.1 The Group is classified as a Group 4, Level 1 body under the Cabinet Fees
Framework. The fees are $1,035.00 (plus GST if applicable) per day for the Chair and $780.00 (plus GST if applicable) per day for members, which is consistent with the Fees Framework."
Matariki Advisory Group: establishment, appointments and Terms of Reference (mbie.govt.nz)
Compared to all the selling off of the family silver, from 1984 till recently, chicken-feed. And that was real theft.
But Maori, while they were not a sustainable society as of European arrival, were far closer to that state, than we are or were.
Those who think reverting to their ways can solve our overshoot predicament, are mistaken. But not nearly as mistaken as the unchanging, unthinking types who still cheer 'growth'. Or those paid to cheer it, of course.....
The daily rate is fine, in fact its bloody cheap, there are plumbers that charge more. Its the taking 18months to do so little that's the problem.
Call for submissions from relevant parties, wait a month or two, then form the committee for a week or two to read the submissions. Another month for consultations and they should be pumping out the final recommendation.
Are you sure these comments are race baiting/misogynistic? I feel like there would be questions of nepotism even if she was a white man.
Thank you. Race and gender are irrelevant when it comes to nepotism.
Anyway, here's a good read on the consulting rorts out of Queenie.
We knew it was a lot of money (the council’s annual spend is more than $100 million) and it did have some of the hallmarks of “jobs for mates”. When we chose ZQN7 at random (it was the last on a list of more than 400 QLDC contractors and consultants) we did not necessarily expect to find anything. It had taken more than two years to get the list in the first place.
https://crux.org.nz/crux-news/inside-the-cashed-up-world-of-the-queenst…
Great link. This is what happens when you continue to denigrate public servants. You miss out on talent that doesn't want to put up with all the shit they get handed out only to also get paid less than their private sector counterparts. At the end of the day the work still needs to be done and the public sector ends up having to pay many times more by hiring private sector contractors. All part of the privatisation masterplan. I know as I've worked in both. Now I'm in private sector I charge approx. 4 times more doing exactly the same work I used to do in the public sector, plus the added bonus that I don't have to put up with self entitled pricks who think that because you work for government you are somehow personally accountable to them.
Welcome to neoliberalism.
Just to be clear, cause to me from your posting, this sounded like an ongoing group appointed every 18 months, but actually this is the advisory group that was formed in order to establish the new public holiday, whoose work is now done and dusted.
So before establishing a new public holiday, the government looked into what was needed to do so. I don't see the big deal?
8 The purpose of the Group is to advise on:
8.1 A date for a Matariki public holiday, and provide a forward annual calendar for this holiday for the next thirty years; and
8.2 How best to celebrate Matariki by marking its importance in an appropriate manner.
"Work programme 38. The Group will initially report back to responsible Ministers by 1 February 2021"
"The Group will have an ongoing mandate up to the first celebration in 2022"
I'm afraid that your estimate of $2.7 million for member fees alone is slightly off
The Group will meet at least monthly until the end of the term of appointment. Meetings may occur more frequently as the Group sees fit, within budget constraints
Cabinet should note that the estimated costs for the Group are $0.40 million in 2020/21 and $0.15 million in 2021/22 to fund members fees, engagement and consultation processes and to operate a Secretariat for the Group
The Law Commission is recommending a new Class Actions Act be developed to improve access to justice and efficiency in litigation.
Would that have made it easier for victims of HardiLeak building products, I wonder? Didn't their bid stop when getting to the Supreme Court because of a lack of funds to go further?
So China has just committed to going zero covid for up to 5 years
https://www.theguardian.com/world/2022/jun/27/alarm-in-beijing-after-an…
Yeah, you can do what you want with the OCR, inflation is here to stay.
By keeping manufacturing on semi lock down in china, at the same time Russia is affecting food and oil prices by the ukraine war and its blockades.. they are jointly keeping a vice on high inflation in the west and thus major economic damage is being inflicted on us. The longer they do this the weaker the west economy and greater our social unrest.. all the while whilst they build their dictatorships and militaries.
Along with chinas protracted lockdowns affecting supply chains and prices ukraine war will also be drawn out..
The Institute for the Study of War concluded that the Kremlin "intends to conduct a protracted conflict in Ukraine and is seeking to advance mobilization efforts to support long-term military and political goals in occupied areas of Ukraine."
Given china and russia stated intentions to make it a long period of delays, and thus for us to control inflatoon western reserve banks will surely need to use high interest rates to quell local demand from us peasants for a long time.
It will be an interesting next decade..days of overinflated asset prices, big holidays and throwaway clothes are gone. Back to the good old dqys
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