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
ASB cut its 1 and 2 year fixed rates. More here. Kāinga Ora/HNZ raised its floating rate by +42 bps to 5.85%, and their 1, 3 and 5 years fixed rates
TERM DEPOSIT RATE CHANGES
WBS (Wairarapa Building Society) raised all its TD rates from 3 months to 2 years.
QV SEES THE RETREAT TOO
According to QV, the average value of homes is down more than -$50,000 nationally since January. Auckland values are down by almost -$100,000. Auckland, Wellington and Palmerston North are experiencing the biggest fall in value.
TRAFFIC WEAKNESS WEIGHTS ON Q2 GDP
ANZ's Truckomer traffic monitoring shows the Light Traffic Index (cars) fell -3.4% in June, while Heavy Traffic (trucks) fell -2.7%. The new public holiday may have caused a bit of noise in the data. Q2 data is now complete; ANZ says the Heavy Traffic Index suggests it’s a line ball call whether GDP managed to grow at all in the quarter. To then that suggests a chance of a technical recession, given the economy shrank 0.2% in Q1. But there are lots more GDP indicators to come.
A MAJOR FOOT TRAFFIC PROBLEM
Retailers say rising operating costs like wages and freight, staff shortages and lack of foot traffic were the key pressure points on retailers in the June quarter. On average, across the sector, prices increased by around +6% in the last quarter with a similar outlook for Q3-2022. More than 70% of retailers increased prices in the last quarter at an average of 6%. Looking ahead more than +80% of retailers will be increasing prices in the next quarter – again at an average increase of +6%. This suggests that high inflation will likely continue through the rest of the year.
UPDATED
We have updated our rent charts with the latest MBIE data to the end of May, here, here and here.
'A MORE ENDURING SOCIAL & ECONOMIC INTEGRATION'
The NZ and AU Governments are talking about our mateship. Apparently the prime ministers discussed changes to the situation of New Zealanders in Australia including ways to streamline New Zealanders access to Australian citizenship, with agreement to identify options by ANZAC Day 2023.
IN LINE
Federated Farmers President Andrew Hoggard has been re-elected unopposed. But they have a new vice-president, Golden Bay dairy farmer Wayne Langford. The VP position is where Fed Farmers find their next President.
FROM 'ACTING' TO PERMANENT
The FMA has confirmed the appointment of Margot Gatland as its new Head of Enforcement, a role she has been in on an acting basis.
GUILTY PLEA
The Serious Fraud Office has got a guilty plea from an Auckland property investor charged with fraudulently obtaining millions of dollars in home loans. They alleged Viki Cotter and three others deceived banks into providing them with loans for the purchase of residential properties. All four originally plead not guilty. The case against the other three proceeds.
STILL DRAWING ON THE FLiP
Another [unknown] bank drew another $350 mln on their FLP (Funding for Lending) credit line at the RBNZ (currently priced at 2% and likely to rise to 2.5% next week). This latest draw takes the total funds lent in the FLP to $12.7 bln, a long way below the $28 bln the RBNZ allocated. But the FLP was an emergency facility, and you could [easily] argue there is no financial or funding emergency any more.
MORE GLOBALLY IMPORTANT STIMULUS
Reports that Chinese officials are working on a NZ$360 bln stimulus package "with unprecedented bond sales" that has boosted sentiment and sparked a recovery in raw materials - especially coal.
ABE SHOT
If you haven't heard, the former Japanese Prime Minister has been shot campaigning. The assailant was detained almost immediately. Abe probably won't survive the assault. The yen fell. Gun crime is extremely rare in Japan.
SWAP RATES FIRM
Wholesale swap rates have risen slightly again today, maybe by about +3 bps, and well below offshore moves in bond rates. The 90 day bank bill rate was up a chunky +5 bps to 2.90% today as the OCR review gets closer. The Australian 10 year bond yield is now at 3.50% and up +7 bps from this time yesterday. The China 10 year bond rate is now at 2.86% and unchanged. And the NZ Government 10 year bond rate is now at 3.66%, up +2 bps from this time yesterday and now just below the earlier RBNZ fix for this bond which was down -2 bps to 3.67%. The UST 10 year is now at 2.98% and up +8 bps from this time yesterday, although in between it did get as high a 3.02%.
EQUITY PRICES MOSTLY FIRM
The NZX50 is ending Friday up +0.5% on the day, up an unusual +3.9% for the week. The ASX200 is heading for a daily rise of +0.5% as well, and a weekly rise of +2.1%, which itself isn't bad. Tokyo is up +1.4% in Friday morning trade, heading for a +3.0% weekly gain. Hong Kong is up +0.3% in early trade and if that holds it will close the week flat. Shanghai is flat in early Friday trade, heading for a -0.5% retreat for the week. The S&P500 ended its Thursday session up +1.5%, and for the three trading days this short week is up +2.0% so far.
GOLD SETTLES
In early Asian trade, gold is up +US$2 from this time yesterday at US$1742/oz. Earlier it closed in New York at US$1740.oz and earlier again in London at US$1748/oz.
NZD LITTLE-CHANGED
The Kiwi dollar is little-changed from this time yesterday, still at 61.8 USc. Against the AUD we are -½c lower at 90.3 AUc. Against the euro we up +20 bps firmer at 60.8 euro cents. That means our TWI-5 is little-changed at 70.5.
BITCOIN RISING
Bitcoin is now at US$21,989 and up +7.2% from this time yesterday. Volatility over the past 24 hours has been extreme at +/-5.4%.
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70 Comments
Our monopoly money is looking a bit weak there. Crikey.
Probably a good time to buy/upgrade electronics.. before old stock sells out and new shipments purchased with a weaker NZ dollar arrive.
I got a bit of a shock looking at this forecast: https://longforecast.com/nzd-to-usd-forecast-2017-2018-2019-2020-2021-n…
Yikes, that's not positive.
Probaby more to do with a strong USD than a weak NZD. The greenback is benefitting from a flight to safety at the moment as risk-off sentiment takes hold.
Of course, "safety" is always relative. You just need to be the least-worst option.
Increasingly convinced we are living in a simulation.
Of all the things to bring down Boris, it was a man by the name of 'Pincher' with a proclivity for - wait for it - being a Pincher.
At least whoever is programming it has a good sense of humour.
Jacinda is riding her broomstick to Japan as we speak to confiscate their guns.
Nah, she is busy squaring up policies affecting New Zealanders living in Australia, including pathways to citizenship, voting rights of residents, and deportations.
Japans policy on guns
Other than the police and the military, no one in Japan may purchase a handgun or a rifle. Hunters and target shooters may possess shotguns and airguns under strictly circumscribed conditions. The police check gun licensees' ammunition inventory to make sure there are no shells or pellets unaccounted for.
But yes shes a women..so must be a witch if that makes you feel better about yourself.
Lucky she's not Maori. That's really set him off bigtime.
I hope you didn't just assume my gender.
A female engineer would not bother with this site..too many old keyboard warriors trying to be the "man".
I think Brock self identifies as a cat......
I just assumed Brock was short for broccoli.
The mafia (yakuza) and ultrantionalists can access guns if they wish. Japan has a big coastline.
Agree..but its a great place to visit, virtually crime free.
But because Jacinda did it people will still grizzle.
I think it has much more to do with Albanese rather than the chippy little Kiwi PM
... so funny that the perky Kiwi PM was visiting Australia for a week when their PM was in Ukraine , offering moral support ... an invite which Ardern had refused ...
Not really. The number of people wanting to leave NZ has skyrocketed under Labour, all Albanese is doing is helping those disenfranchised New Zealanders find a better home. It ultimately starts with Jacinda.
It ultimately starts with perpetuating the high cost of housing and low value of work.
she is busy squaring up policies affecting New Zealanders living in Australia,
Don't you mean "She's busy making it more attractive to emigrate to Australia"? Strewth.
But yes shes a women..so must be a witch if that makes you feel better about yourself.
That's an awful thing to say. Just because all witches are women, does not mean that all women are witches.
What were you learning at school instead of set theory?
Slow clap
You were learning how to slow clap?
Defiantly a bloke with these Dad jokes
Here's a good one Aaron:
Q: What does a witch put on their hair?
A: Scare spray.
What have witches, by way of comparison, done to deserve that?
So Baywatch, which PR company do you work for. If you think Australia are going to change things for Kiwis anytime soon then you are a dreamer! Just because she stamps her foot at Elbow doesn't mean things will change! He is probably using her own response against her - " we are looking into that". Just more media piffle!
It has long occurred to me that Labour Govt would do well to allow Kiwi's to vote, that's potentially 300k votes to be had.
I have a few non-NZ born acquaintances who are annoyingly cheering on the notion of freeing up the path to Aussie citizenship.
so annoying, NZ residency / citizenship as a path to Aussie residency / citizenship.
we are being taken for a ride
Often journalists, and such like, have written that wishful immigrants to Australia can ease that process substantially by first taking up residency in NZ. Bit of an insult to us all actually. Different topic entirely, but remember how the Mr Asia team invariably flew back to Australia via NZ so as to smooth the way through customs.
Then we need a sub-category for new arrivals, like a minimum 10 year pathway to Australian SCV. The quickest way to make life easier for Kiwi's living in Australia now is to restrict the path there from other countries througn NZ. I get that this is an issue for them.
As well even worse, if in Australia they then turn out bad, a criminal, NZ gets them back but they don’t then go back to where they started from. Why are we such suckers for punishment.
Who says history never repeats. Abe’s grandfather Nobusuke Kishi survived a knife attack in 1960. He was though then actually the PM.
Also wasn't there the that Japanese politician who got run through with a samurai sword on TV (or maybe it was just pre-TV, but was definitely caught on camera)?
Yes. Not a PM but if recall correctly a head honcho in the socialist wing of their politics. Think history tells us when they go after it, they absolutely go after it. It was pretty damn gruesome.
You come to NZ's pre-eminent financial news website, and this is your contribution?
I've reported the comment, as it's not Robust, Respectful, or Insightful.
Stick around OB, this is small beer. 3 Waters or the Mahuta's are when it really get's going.
... perhaps you'd like to do a little research , and count the % of comments here @ interest.co.nz which are " Robust , Respectful or Insightful " ...
I'd reckon 10 % ... double that if you exclude the shite I post ...
Politicians know what game they enter… just like the crew looking to hitch onto the gravy train that is apartheid, politicians of all hues with nose in trough must take the slings and arrows that come their way
But the comments section on a financial news website is not the place for such tripe, leave it for Facebook, Reddit or stuff.co.nz.
A real stunner from Chris Joye across the Tassie:
The 2.5 per cent estimate the RBA is bandying around is yet another forecast that is not worth the paper it is written on – much like its view in early March 2020 that the pandemic was not a big deal and then its excessively pessimistic subsequent forecasts for a deep recession.
Australian households responded by boosting their debt to disposable income ratio to a never-before-seen 187 per cent. The value of housing leapt 37 per cent – or to a record 656 per cent of disposable incomes – reinforcing its role at the largest source of household wealth.
https://www.afr.com/wealth/personal-finance/how-the-rba-duped-aussie-ho…
The ol' rat poison from Mt Gox is ready to be returned to its rightful owners. Many of these people were paying <USD400 for a single Bitcoin. The price action could be epic if they all decide to cash in at once.
https://www.bloomberg.com/news/articles/2022-07-07/mt-gox-creditors-inc…
They had better hurry - its going to zero...soon, or next year, sorry no last week ..bugger but it will make no doubts about it.
That's the word on the street and around the water cooler. I think Granny Herald confirmed that it's highly likely.
"Operational costs have exceeded mining revenue for some miners "
Crypto Mining Giant Dumped Most of Its Bitcoin Holdings in June
-
Core Scientific is selling tokens to buy machines, repay debt
-
https://www.bloomberg.com/news/articles/2022-07-05/crypto-mining-giant-…
If everyone stops mining, that mean no new transactions right?
What's the economic / financial relevance of Abe being shot?
Very little. It’s not unprecedented. The mayor of Nagasaki was shot to death in April 2007 by a disgruntled yakuza.
Believe in the background, elder statesman role, he was promoting quite extensive rearmament of Japan. Bringing the population around to notice that there was an increasing threat from an historical enemy perhaps.
Granny Herald should be sidelined. There is nothing of any value what-so-ever amongst its pages. The last time I read it (at the cafe waiting for my coffee) I had to go & wash my hands. They were stained with a charcoally colour.
There's 2 or 3 really good writers, arguably close to the best in the country. Given the dearth of quality journalism in NZ, that's the only reason I've kept Premium.
But yep most of it is populist trash.
I like the comments feature. Only subscribers can comment and it goes through moderation first. It appears few on the left pay subs.
... it goes against the lefties' fundamental belief that all the news ought to be free , and wholly government owned ....
…well done, made me laugh
Or maybe they have better things to do.
Or better bullshit radar?
"Granny Herald" suggests the demographic might be at play there. Old pseudo-conservatives, primarily.
Townhouses for rent in Auckland (as advertised on TradeMe) reach a new high of 527.
https://www.trademe.co.nz/a/property/residential/rent/auckland/search?p…
529 now! That doesn’t seem like a lot though, surely a tiny proportion of all rental properties.
5 is a lot if you're a highly leveraged investor and 4 of your neighbours are trying to rent theirs also.
https://www.trademe.co.nz/a/property/search?search_string=44%20Ventnor%…
You might remember it was the development the locals unsuccessfully tried to stop with court action.
https://www.nzherald.co.nz/business/neighbours-lose-litigation-attempt-…
They should have banded together to show the buyers a spreadsheet with a 0% yield on 6%+ interest rates.
All these new build townhouses that the likes of Propeller/Opes and the other seminar ticket clippers are selling only make sense as investments with sub 3% rates and capital gains.
Take that away and they're a noose around your neck.
My FB page gets bombarded with marketing on new developments, and I can tell you that there is some blatantly misleading information being propagated quite frequently…
HM... I get them too.
Unfortunately because of the algo's, once you watch one, you're feed them constantly whether you like it or not.
Misleading is an understatement
It’s quite a lot and it’s rising.
Was 420-430 in March so it’s a solid 25% rise in listings within 3-4 months.
"Abe shot" shot the wrong leader...
Not even remotely funny.
... he has died ... sadly ... there's nothing funny in that ...
Wasn't meant to be funny, sorry if you got offended, I meant Putin should be shot, I thought you would get that
... I got wotcha meant straightaway ... but , it seemed a rather crass way to frame it ...
Not much of a lateral thinker so I didn’t . He just needs to think beyond what he is thinking, and think more about how others might think. I think that would make sense, if you think about it.
But the FLP was an emergency facility, and you could [easily] argue there is no financial or funding emergency any more.
Couldn't agree more. This facility needs to be ended immediately, regardless of what the Reserve Bank might have promised when it started.
Yes, it might damage their credibility somewhat by doing so, but it's arguable that they don't have a lot of that left anyway.
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