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
ICBC cut its 2-year fixed rate today. They were matched by the same change by China Construction Bank.
TERM DEPOSIT RATE CHANGES
Nothing here so far.
STILL LEAKING PEOPLE
There was a net permanent migration loss of -800 people in May (about the population of Kaitangata). For the year to May, the loss was -10,700 (about the population of Hāwera). The yearly shifts include +20,300 NZ citizens arriving permanently, -22,600 citizens leaving permanently, +27,100 non-citizens arriving, and -35,500 non-citizens departing permanently.
WHERE ARE THE WORKERS?
A recent survey of Auckland EMA members showed that 100% of responding employers with vacancies were struggling to fill them, with almost 40% of employers advertising for more than six months. The survey had 335 businesses respond, mostly from the manufacturing, transport, construction, health, and retail sectors, including 50 different sectors and industries. EMA members say there is a serious shortage of New Zealanders to fill vacancies, recruits are costing more, and staff poaching is on the rise.
ONLY A THIRD HAVE RETURNED SO FAR
In May 72,755 visitors arrived for a short stay, up from 54,300 in April, and up +26% from year-ago levels. But the May 2022 levels are still -146,000 lower than the May 2019 levels, so full recovery is a very long way off yet.
A POST-PANDEMIC LOW
Spiraling costs for a host of key farm inputs, including fuel, fertiliser, feed and labour, have driven a sharp drop in sentiment among the nation’s food producers, and farmer confidence is now at its lowest level since the start of the Covid-19 pandemic in early 2020, the latest Rabobank Rural Confidence Survey has found. The survey which was completed late last month found net farmer confidence was significantly lower from last quarter. The proportion of farmers expecting conditions in the agricultural economy to improve in the coming 12 months had fallen to +13% (down from +24% last quarter) while the percentage expecting conditions to worsen rose to -48% (up from -27%). A total of 38% were anticipating the agricultural economy to remain stable (down from 46% previously).
WHAT TO EXPECT
Tomorrow at 2pm the RBNZ will advise the results of its latest OCR review. A +50 bps is almost universally anticipated taking the OCR to 2.5%. If there is any 'surprise' it will be in the outlook. Westpac (Imre Spizer) notes that a “neutral” scenario (the least likely to disturb the market) comprises a +50 bps hike, and a statement signaling that the economy is evolving as expected. A dovish scenario comprises a +50 bps hike, and a statement which emphasises the downside risks to the global economy. The 2-yr swap rate could fall -15 bps in response. A hawkish scenario comprises a +50 bps hike, and a statement which emphasises its concerns about high inflation and that inflation expectations could remain elevated. The 2-yr swap rate could rise +15 bps in response.
CONFIDENCE SLIPS IN AUSTRALIA
The widely-watched NAB business confidence survey shows it fell to a below-average +1 index point in June, as global uncertainty, looming interest rate hikes and inflation continued to cloud the outlook in Australia. Fears over these impacts on Aussie household consumption were particularly evident with confidence in the retail sector taking a significant hit. This business confidence slip is mirrored in a Westpac consumer confidence survey also out today for June.
EARTH'S DEMOGRAPHIC DESTINY
The United Nations says the world population will hit 8 bln in November and grow to around 8.5 bln by 2030 and 9.7 bln by 2050, before reaching a peak of around 10.4 bln people during the 2080s. The population is expected to remain at that level until 2100. Two-thirds of the projected increase through 2050 will be driven by the momentum of past growth that is embedded in the youthful age structure of the current population. And part is from declining death rates - birth rates are falling too.
PROTEST PUT DOWN WITH VIOLENCE
Check this record of the Chinese bank protests, and the official response. The police didn't hold back. You have to be brave (or desperate?) to protest in China.
SWAP RATES HOLD
Wholesale swap rates may be on hold today. The 90 day bank bill rate was up +4 bps to 2.97% today as tomorrow's OCR review gets closer. The Australian 10 year bond yield is now at 3.43% and down -13 bps from this time yesterday. The China 10 year bond rate is now at 2.84% and down -1 bp. And the NZ Government 10 year bond rate is now at 3.71%, unchanged from this time yesterday and still just above the earlier RBNZ fix for this bond which was up +1 bp to 3.70%. The UST 10 year is now at 2.96% and down -13 bps from this time yesterday.
EQUITY PRICES MOSTLY LOWER AGAIN
The S&P500 ended its Monday session down -1.2%. Tokyo has started its Tuesday session down -1.7%. Hong Kong is down -1.3%. And Shanghai is down -0.6% in early trade. The ASX200 is up +0.2% in early afternoon trade. The NZX50 is down -0.2% in late trade.
GOLD DOWN
In early Asian trade, gold is down -US$6 from this time yesterday, now at US$1735/oz.
NZD LITTLE-CHANGED AGAIN
The Kiwi dollar is about -½ USc lower from this time yesterday at 61.2 USc. Against the AUD we are +-½ firmer at 90.9 AUc. Against the euro we firm at 61 euro cents. That means our TWI-5 is little-changed at 70.4.
BITCOIN SLIPS AGAIN
Bitcoin is now at US$19,931 and down -2.8% from this time yesterday. Volatility over the past 24 hours has been moderate at +/-2.4%.
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70 Comments
I shit you not this was the subject of an email a prominent REA sent me this morning:
Lower interest rates = another investment property?
Mind boggling.
Real estate agents. LOL.
Maybe they're a boomer RE agent and comparing interest rates to what they had back in the day...
I just saw an add on Interest for a property, being sold by James Marshall, one half of the former NZ Cricket twins.
What a funny old country.
Geez, still got the silly hair do
Would you buy a house from Sideshow Bob?
Haha
And his twin.
There is a few "celebrity" agents out there. Troy Flavell, Logan Swan and Sally Ridge come to mind (big asterisk on the last one). Let's not forget Manu dabbled his hand in it as well...
How'd you not mention Paula Benefit...biggest celeb out
“What to Expect, as captioned. Last sentence “a hawkish scenario, ” that describes the reality in fact. But the powers that be won’t be making any statement to that effect. Too damn damaging politically.
Pleasing about the immigration slowdown.
Immigration is a short term benefit for disorganised industries. And a long term disaster to New Zealand.
Answer. Get organised.
Funny how Business NZ itself uses its powers as an organised group to block the bill that allows similar rights to their counterparties.
1972 populations: NZ 3 million, Singapore 2.5 million
2022 populations: NZ 5 million, Singapore 6 million
A disaster for Singapore? Not!
Certainly a disaster for Nature ...
Singapore has long-term industrial plans that inform its skilled migration programme. Their locals have very high skill levels, universities are esteemed, government is efficient and rules with an iron fist.
Those migrants not bringing high value to those priority sectors (might I mention heavily subsidised) find it impossible to gain PR.
All we say is you get paid a median wage in any job and we will hand you a PR.
Singapore is a doomed city. All the inputs - real stuff like energy, food, materials - need to be imported, and it cannot deal with its wastes so they'll be being ejected to 'somewhere else'. That adds up to much more footprint - more acreage demand - than they have. By some orders of magnitude.
NZ, ex fossil energy, will be hard put to support 2 million; the prior arrivals fought each other at much lower numbers.
Perhaps try counting real stuff?
Agree. Overall population is less important than small and steady population increases which can help economic growth IF managed correctly, and not saying NZ has done this. But we do have headroom for another 5-10m if we start to manage things properly.
Singapore just doesn't have any more space. And many Asian and European countries are now navigating a post-growth world, where their populations are declining but they still need economic growth to keep the system running.
Biggest challenge for the next century (apart from all the others) is how to keep the economies of countries growing even when their populations are declining. I don't have confidence in productivity increases to offset that.
Can you chicklen littles learn nothing from Erhlich?
"...by the year 2000 the UK will be simply a small group of impoverished islands, inhabited by some 70 million hungry people".
“Most of the people who are going to die in the greatest cataclysm in the history of man have already been born. Experts feel that food shortages will have escalated the present level of world hunger and starvation into famines of unbelievable proportions. Other experts, more optimistic, think the ultimate food-population collision will not occur until the decade of the 1980s."
or Rachel carson's book, The Silent Spring, published in 1963. The world will grind to a halt by 1970, drowned in it's own pollution. The amazing thing is that some clowns still thought she had some sort of credibility after 1970 came and went uneventfully, except for Let It Be, of course.
I'm guessing someone took notice and DDT production declined dramatically? The only clowns are those believing human pollution is mana from God, while cashing in!
The government could start by limiting new visas to occupations on the green list (medical professions, construction tradespeople, engineers, etc.) for a few years to rebuild our health, housing and physical infrastructure. Or at least put quotas on how many non-green listers can enter per 100 or so.
Importing 1000 GPs won't be enough if there are 150k non-medical workers entering the country alongside.
No we don't have room for more. The problem is that, via the use of fossil fuels, we are taking more sunlit acres than we have too. They were acres which were sunlit before humans turned up, and we use them (as per gas-to-fertiliser) to extend our own. We are overshot, here.
Work it out, long-term, no fossil energy, no draw-down, and you'd be lucky to support 2 million.
It surprises people, does the idea that fossil energy is acreage...
Growth Growth always the focus -- We dotn need ot grow -- we could even decline in popu;ation -- economic growth could easily come from being more productive - getting more outputs from less inputs - but we would need less in total not more -- reorientate our industries to higher paid and higher value outcomes -- 4 million people -- with greater productivity =- less global footprint higher $ per pop providing better services
Singapore will solve their own problems, unlike NZ.
Now, their housing policy...
30% stamp duty for foreigners wanting to buy property.
And a massive amount of supply built by the state (as NZ used to, funnily enough).
Time limits on public servants and a health funding system that rewards you for staying healthy are polices we should adopt.
Migrants = Progress of Economy, openness and diversity. But Kiwis don't like that. They think we are invaders! 2050 Singapore = Population 10 Million and GDP 1.5 Trillion. 2050 NZ = 6 Million and GDP may be 750 Billions.
Depends if your only definition of progress, is devaluing digits sitting on a finite resource guzzling server somewhere, I guess?
Economic progress?
Show me some economic stats on per-capita or per-hour basis where NZ has fared better than its peers with its high population growth rate since 2014.
All the data suggests otherwise. Maybe there is some secret stash you're quoting from.
Same ol' story. Nothing will change. The fines will be chump change and then BAU. A small few "may" face jailtime. Jamie Dimon will not be accountable in any way or form.
The precious-metals business at JPMorgan Chase & Co. operated for years as a corrupt group of traders and sales staff who manipulated gold and silver markets for the benefit of the bank and its prized clients, a federal prosecutor told jurors in Chicago.
“This case is about a criminal conspiracy inside one of Wall Street’s largest banks,” said Lucy Jennings, a prosecutor with the Justice Department’s fraud section. “To make more money for themselves, they decided to cheat.
https://www.bnnbloomberg.ca/jpmorgan-traders-ripped-off-gold-market-for…
Oneroof talking about ...
That was thoroughly fleshed out this morning. You need to get out of bed earlier.
Interesting to see, in that anecdote, that Adelaide is popular.
I lived there from 2010-2014, great place, although Friggin’ hot summers!
Aussie’s most underrated city, in my opinion.
And comparatively very affordable
They were away ahead of everyone else:
https://www.dunstan.org.au/wp-content/uploads/2019/08/TIR_Reports_2003_…
Smart. Compare that to almost anywhere/anything.
Adelaide is the Meth capital of the planet, with cold winters and hot summers. It is the murder capital of Australia, isolated from most of Australia. If you want to live life in a homogenous anglo saxon city devoid of any culture and sport (AFL aside), knock yourself out. I think it's fairly priced.
https://www.abc.net.au/news/2019-10-24/adelaide-had-highest-meth-use-in…
The winters are not ‘cold’. They are fairly similar to Auckland, maybe just slightly cooler, and short. From September to December the weather is great, typically between 25-35 degrees. There’s about 4-5 weeks in summer when it’s uncomfortably hot, late 30s to early 40s. You cope - stay indoors a lot, go to the beach etc. It’s not widely known but there’s great beaches in Greater Adelaide and the water is cool, good for cooling down on the hot days.
no culture? Rubbish. Fantastic arts and fringe festivals, good music scene, vibrant food and wine culture, very good art gallery.
yes it’s got a fairly high bogan content, but not much worse than most NZ cities.
great hinterland too, Adelaide Hills etc.
Yes, I was generalising and probably a little unfair. It could tick a lot of boxes and I know people who live there and it has all they need. Still, you need to catch a plane to pretty much do anything, it can be a harsh climate and it's not as temperate as Auckland. You are very isolated.
Also the flies, no one ever mentions the flies. I've watched hard core You Tube overlanders abandon trips midway unable to be outside during daylight hours. Australia is a harsh environment, fires, floods plagues (google mice). The tropic's are totally unforgiving, there is a reason Australia has limited inbound tourism apart from the Gold/Sunshine Coasts.
StateAverage Electricity Usage Rates (per kWh)
VIC 19.77c/kWh
QLD 19.97c/kWh
NSW 22.74c/kWh
SA 31.52c/kWh
https://www.energymatters.com.au/renewable-news/south-australia-leads-t…
Fair enough.
I never had an issue with flies in Adelaide.
as I say it does have a fairly high bogan and ‘weirdo’ factor.
Ah, don’t forget the beautiful cricket ground nor its history. Lovely tram service to Glenelg. I remember at primary school being taught about the mediterranean climate & South Australia was shown up as such, more or less on its own, on that particular map for say Australasia as was used to be called then for the region. Wondered what that meant. Found out when I got there.
The redeveloped Adelaide Oval is brilliant. Really enjoyed the Ashes test match back in 2013
Is Anglo-Saxon some kind of bad thing now?
Yeah it’s shameful isn’t it…
goodness me
Of course not, but it is a conservative religous culture. I mean, let's go out for an Anglo Saxon meal tonight said nobody ever.
The ultimate conservative religious culture
is economics.
It's a crock of shyte (beautifully described as driving by looking out the rear window) and requires full belief, no questioning.
Well i tend to agree that medieval food is a bit bland. The Anglo-Saxon period ended in 1066AD with the Norman conquest though.
Do you mean British? Britain has a very rich culture and culinary tradition.
I am pretty sure that in the late 1700s, early 1800s members of the race that shall not be criticized went out for the odd Anglo Saxon meal. Just saying.
What is "roast lamb". Didn't that work for decades for most people?
Racist tag only applies to majorities… Te Koots is educated, he knows this.
Anglo Saxons in Adelaide. !! That would be cool. People from the dark ages, 600AD to 1000AD But how did they get to Adelaide and maintain their culture mud huts and all.
WHERE ARE THE WORKERS?
The new Accredited Employer Work Visa policy has recently opened, allowing migrants offshore to apply to work for an accredited employer. As part of the policy, employers need to have completed a Job Check before they can hire a worker from overseas and must pay at least the median wage of $27.76 per hour.
But the survey found that a third of respondents did not pay the median wage, meaning that vacancies could not be filled with overseas workers. McDonald said the median wage barrier meant there were a lot of people who would earn below that mark that could not come and fill gaps in sectors like trucking and hospitality.
Jeez, I remember reading a sob storey from the transport industry about how they couldn't get workers even though the pay was marvellous. Interesting how cracks appear in the facade when lower bound wage thresholds are set.
The protests in China are interesting from a number of different perspectives. From the linked Twitter thread:
Henan authorities have just thwarted a protest planned by rural bank depositors across the country by turning their app-based health code red.
China is using its vast COVID surveillance infrastructure to stifle dissent.
Rights are never handed down from the top. They're hard won and fought for, and very difficult to get back once taken away. We'd do well to remember this fact here in the west, without needing to be reminded as the Chinese unfortunately are right now.
I think that there has to be a right not to own a cellphone.
A bit like Kwisaver: until its compulsory the govt cannot bring in means testing of it. Because as long as its voluntary, people could choose not contribute to it.
A review of things you need to know before you sign off on Tuesday; minor rate changes ahead of the OCR review
Today, RBNZ issued $400m, 4 week RB Bills at 2.49%.
A hawkish scenario comprises a +50 bps hike, and a statement which emphasises its concerns about high inflation and that inflation expectations could remain elevated.
In the US:
#Inflation is transitory narrative revived? NY Fed published latest expectations survey. 1y inflation expectations shot higher to +6.8% in June from 6.6% in May, a fresh record. BUT 3y inflation expectation fell to +3.6% from +3.9%. https://newyorkfed.org/newsevents/news/research/2022/20220711 (via @knowledge_vital)
Sounds like russia upped the ante today by turning off the gas to germany, potentially permanently (in a couple months germany/EU would need to ration its energy). Iran is now supplying drones to ukraine...
So potentially ukraine war has a long way to run with potential for more inflation not less if china/russia et al keep pushing back on the west economically.
Crux point will be if energy isnt looking like it will be free'd up by the northern hemisphere winter.
Vlad is obviously schooled on peak energy, even if the wests economic gurus still believe in the tooth fairy, and ffs are just another substituteable commodity.
Agreed - I just 'called' Bernard Hickey on the other thread. One who had it all put right under his nose - and look what he just wrote!
How do these brains operate? Plug in a permanent 30% optimism bias and add a 20% avoidance surcharge?
Auckland EMA members showed that 100% of responding employers with vacancies were struggling to fill them, with almost 40% of employers advertising for more than six months. The survey had 335 businesses respond...
There's never a shortage of labour in a capitalist economy, offer them the wages and they will come.
Shambolic from the government and Kainga Ora:
https://www.nzherald.co.nz/nz/government-faces-60-year-debt-blowout-aft…
they have been hiring hard out for the last 18 months and paying a good 20K + for similar roles in teh NGO health and social care sector -- something that currently the MOH have been doing as they seek to maintain their power and relevance with the new HealthNZ chronc leadership and values issue
They could of, indeed should of, being doing prefab en masse. Then they wouldn’t be facing ‘cost blowouts’.
I am not going to vote for these clowns, nor National. Who do I vote for? Bugger it, maybe TOP??
Christ we are so badly served by our governments and bureaucracy…
Heard on Radio NZ this morning that a seaweed feed for cattle is now available in Aus that can reduce methane emissions from cattle by 90-95%.
A lot of unquestioning folk grasp this or that straw. Think about it. Right now, the nutrient streams in any given u/w habitat, are fully spoken for. If you are going to extract, then you are gatecrashing some organism's party. And there will be repercussions. Like fish further up the foodweb either leaving, or dying. Sure, one person can cut one seaweed plant, and the great scheme of things is essentially unaltered. But done at meaningful scale, that is not so. Alle same lab meat.
And of course there is the primary predicament - milk and beef are dependent on fossil energy. To which they're going to add? Fossil energy (harvesting, transport). So more CO2 per kilo of produced food. Excellent. And that's before the temporary nature of the energy-source is accounted.
We never seem to learn
In the US 5% of car sales are now Electric, and like the Internet in 1990's that is a launching off point. I would expect before the decade is out most farmers will be powering their electric tractors off the PV system mounted to the top of their Milking Shed or barn complete with large Tesla like storage batteries. ..... The night is always darkest before the dawn.
The seaweed thing is a boomer. Just wait til we learn how to smoke it.
Oi.. Kai Rulz, for your information
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