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
Nothing to report today.
TERM DEPOSIT RATE CHANGES
Nothing to report here either.
BIG BOND TENDERS, UNUSUAL RESULTS
123 bids were received across three very interesting NZBG bond tenders today where $400 was on offer. Bidders offered $1.2 bln in total, by far the largest of the year. The May 2026 offer of $200 mln attracted almost $500 mln in bids. 16 bids were accepted and an average yield of 3.39%. This May 2026 offer is unusual, it was last offered in early December 2021 when the average yield was 2.33%. Even more unusual was the $150 mln offered for their April 2029 bond, last offered almost a year ago. This time a massive $571 mln was bid by 32 bidders, but only one was successful, offering 3.51% to win. On July 29, 2021 that bond went for a yield of just 1.37%. There was a third tender for a May 2051 bond with only $50 mln on offer. $131 mln was bid by 52 parties. But only two were successful, winning at 3.98% which was actually lower than the 4.15% achieved a week ago.
6.95% FROM A BIG BANK
The ANZ preference share offer raised $660 mln. That is far more than the $250 mln they sought. One reason may be because they will pay a pref. share dividend at the rate of 6.95% pa for the next six years. Then that rate resets. The history of pref. share resets is very mixed however. Preference shares rank ahead of regular shares (that win the declared dividend), but behind all debt, including unsecured creditors like depositors.
PARLIAMENTARY FRAUD
A former staff member of the Parliamentary Counsel Office has been charged with fraud. The alleged fraud, obtaining funds by deception, relates to an invoice of $55,200 in 2019.
CARBON EXPORTS PAY OFF HANDSOMELY FOR AUSTRALIA
There was a big surprise in the Australian trade data reported today for May for both goods and services. Most analysts expected a +AU$10.7 bln surplus, but in the end a +AU$16 bln was recorded, and a new all-time monthly record. That takes their annual surplus to AU$135 bln and also a stunning record high and +60% more than for the May 2021 year. Further, the April surplus was revised higher to +AU$13.2 bln. These are very juicy numbers for them, driven by exports, up almost +10% when a +1% rise was expected. Shipments of coal were especially strong - to China.
"EXPANDED ACCESS"
The Americans are easing import rules to allow foreign makers of baby formula stay on their market for the long term, in an effort to diversify the industry after the closure of their largest domestic plant sparked a nationwide shortage.
SWAP RATES BOUNCE
Wholesale swap rates have stopped falling and turned back up today, following international bond market trends. But the moves are minor and nothing like the international jumps. The 90 day bank bill rate was unchanged at 2.85% today. The Australian 10 year bond yield is now at 3.43% and down -2 bps from this time yesterday. The China 10 year bond rate is now at 2.86% and up +1 bp. And the NZ Government 10 year bond rate is now at 3.64%, up +4 bps from this time yesterday and now below the earlier RBNZ fix for this bond which was back up +9 bps to 3.69%. The UST 10 year is now at 2.90% and up +7 bps from this time yesterday.
EQUITY PRICES MIXED
At the end of trading on Wall Street, the S&P500 ended up +0.4% in its Wednesday session. The NZX50 is down a marginal -0.1% in late trade after a set of strong days. The ASX200 is up +0.4% after a set of weak days. Tokyo has opened up +0.8%. Hong Kong is down -0.5%, but Shanghai has opened today up +0.2%.
GOLD DOWN
In early Asian trade, gold is down -US$30 from this time yesterday at US$1740/oz. Earlier it closed in New York at US$1739.oz and earlier again in London at US$1754/oz.
NZD FIRM
The Kiwi dollar is little-changed from this time yesterday at 61.8 USc. Against the AUD we are holding low at 90.7 AUc. Against the euro we up +50 bps firmer at 60.6 euro cents. That means our TWI-5 is now firmer at just over 70.5.
BITCOIN FIRMS
Bitcoin is now at US$20,504 and up +3.4% from this time yesterday. Volatility over the past 24 hours has been moderate at +/-2.2%.
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26 Comments
Blast! Thought that ANZ offer/issue would creep over 7% where it really should be given its low ranking security. Oh well, end result for my modest uptake hardly much different anyway.
You are obviously more interested on the return on your money than its eventual return.
Yea. well some of us saw this coming 2 years ago and it's your own stupid fault if you didn't see what was going on. Its not like you weren't informed. How about we pull the band aid off quickly, suffer a brief amount of severe pain, then get back to work.
Guess I won’t be lonely. Seeing as it has been well over double oversubscribed.But yes, same maxim as usual applies, don’t use it if you can’t afford to lose it.
They are perpetual notes without a redemption date.
Understood. Expect will be tradable on the secondary market, if ever in need. Reasonably optimistic yield will facilitate that.
CARBON EXPORTS PAY OFF HANDSOMELY FOR AUSTRALIA
Coal has ovetaken iron ore as Aussie's most valuable export commod. And iron ore prices now below those of 2019. At the same time, China's PMI has collapsed. AUD is falling. If commod prices keep falling as they are, watch further pressure on AUD and obviously NZD.
During GFC crisis AUDNZD moved towards 1, as we are both screwed and AUD is a more liquid market.... China has built all the appartments required to absorb middle class investment equity....
Im with ANZ on the OCR, one more at 0.50 followed by 0.25s.
Agreed the RBNZ only has the balls for one more 0.5% rise and then it will taper. I don't think the housing market can handle any more than another 1% total.
RBNZ is still sitting on government bonds worth tens of billions and current plans are to taper these at a rate of $5b a year plus not reinvest bonds that reach maturity.
Would be a good time to buy gold with this crazy inflation, pity that my NZDS is so weak
Gold is IMHO more a total collapse hedge..... worth having some for sure....
The XAUNZD chart pennant formation is bullish....
With every asset class collapsing in price... how long can we have inflation?
Would be a good time to buy gold with this crazy inflation, pity that my NZDS is so weak
Gold and silver prices also falling.
This confuses me as well, I still see it as more an ultimate hedge vs an investment.....
Ask yourself why central banks still hold gold.... then get a little bit.
If you take money out of a bank (that they have leveraged about 40 times to lend into housing) and put it in physical
gold.... how deflationary is that to a banks balance sheet... not every going to see a bank economist tell you to own a
bit of gold are we...
It is dropping in usd term so i would be confortable to start buying gold with usd. unfortunately i have nzd and the weakness of it keep the price around 3000 per ounce. At the end of the day gold is gold, and with high inflation i would be confortable to hold gold instead of nzd over the next few years. Just me thinking.
All relative though. How are they tracking compared to equities and property
All relative though. How are they tracking compared to equities and property
Yes, in a real deflationary environment, I would expect gold to go down less. Silver could get punished though. I have exposure to both.
Bad teeth?
Big bond bidding! Yields are clearly topping out and banks are trying to avoid getting stranded with billions in their settlement accounts earning OCR.
Do the banks now know which bonds Treasury is about to purchase from the RBNZ on the 15th.?
Wow. PCO writes our laws.
Boris Johnson announced that he will step down as British PM in the UK autumn ...
... odd , considering how much he covets the role , and that the next general election isn't due until 2025 ...
This year it will be an early autumn in the UK.
What he will do next? Any chance he ends up at the UN alongside NZs own ex-PMs.
Guess its not raining hard enough, yet! "CARBON EXPORTS PAY OFF HANDSOMELY FOR AUSTRALIA"
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