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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