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A review of things you need to know before you sign off on Friday; few retail rate changes, weak consumer confidence, weak lending demand, strong rise in term deposit saving, swaps fall again, NZD firm, & more

Business / news
A review of things you need to know before you sign off on Friday; few retail rate changes, weak consumer confidence, weak lending demand, strong rise in term deposit saving, swaps fall again, NZD firm, & more

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
Only two minor changes to report today, both rises from the Midland Income Fund, and Bluestone. And HSBC said it will be raising its floating rate by +45 bps to 6.34% on August 11, 2022. But with falling swap rates, we may see some banks trim home loan rates next week.

TERM DEPOSIT RATE CHANGES
Nothing to report so far. But TDs are back in favour, big time. See note below. Savers have responded to higher rate offers. However, unless lending demand picks up very soon, banks won't have much reason to keep paying these higher rates.

CONSUMERS AREN'T CONFIDENT
Hard on the heals of yesterday's scary business confidence report, today's July consumer confidence report from ANZ-Roy Morgan shows the down mood is hanging in there, but at least it isn't getting any worse. It's been dragging now for six straight months and is becoming normalised. Inflation expectations eased to their lowest rate in a year. You do have to wonder what these surveys will show if the unusual full employment and tight labour markets eased back a bit

DEFLATING APPETITE
Housing debt rose +$1.1 bln in June from May, and that was its lowest rise since September 2018 (ignoring the April 2020 pandemic shock). Year on year it is now up +6.9% or +$21.9 bln and that is a 19 month low.

TDs BACK IN FAVOUR
Household deposits rose almost +$2.3 bln in June from May to be +$16.6 bln higher than a year ago and now total more than $222 bln. (S40) Household term deposits rose almost +$3 bln in June from May to $91.1 bln and back to November 2017 levels when they first hit that level. They subsequently rise to almost $104 bln before sliding. Now they are on the upswing again and June's +$3 bln rise was its fastest one-month gain ever recorded and double the gain we saw in May.

INSURANCE PREMIUMS - WHERE CLIMATE CHANGE WILL COST YOU
New claims data released today by the Insurance Council shows total insurance payments for extreme weather events closing in on $200 mln for the half year to the end of June. Calendar 2021 set a new annual record for such payments at $324 mln.

STRONG INVESTMENT INFLOWS
China said it had an inflow of foreign investment in June of +US24.5 bln in the month. This was their best monthly result in more than a year. (If that happened in New Zealand, in proportion it would be a monthly inflow of more than +NZ$500 mln - we would notice that and think it was strong.)

JAPAN'S FACTORIES LEAP INTO ACTION
The easing Chinese lockdowns, as tentative and uncertain as they have been, supercharged Japanese industrial production in June. After taking a heavy hit in May, this June rebound more than made up for the earlier shortfall and was way better than expected. It was the first rise in industrial output since March and the steepest pace on record. But Japanese retail sales growth slowed in June.

AUSSIE PPI RISE MODEST IN THE CIRCUMSTANCES
In Australia, producer prices rose +5.6% over the past year to June, slightly faster than in the year to March, but lower than their CPI rise of 6.1%. The equivalent New Zealand data for the June quarter isn't due out until August 17, 2022.

SHOVELING IT OUT
Staying in Australia, the latest APRA data shows moderating growth in loans to owner-occupiers, but loans to investors are picking up sharply - in anticipation of more migration. Overall, private sector lending was up more than +9% year-on-year (and rising much more than New Zealand - see above).

TOO SMALL TO BE BOTHERED
The IMF has been reviewing how Asian economies are handling China's slowdown. They see Australia's expansion fairly hard-hit over the next two or three years. But some others won't miss a beat. Their analysis didn't bother with New Zealand - we don't count for the IMF in this region, it seems (but Nepal and Laos do).

SWAP RATES SLIDE FURTHER
Wholesale swap rates may retreated today again as bond markets have continued drive yields lower. The 90 day bank bill rate was down -2 bps to 3.14%. The Australian 10 year bond yield is now at 3.11% and down another -10 bps from this time yesterday. (A week ago it was at 3.49% so it has been sharply re-rated.) The China 10 year bond rate is now at 2.79% and unchanged. The NZ Government 10 year bond rate is down -6 bps at 3.42%, and now above the earlier RBNZ fix for this bond which was down -10 bps to 3.40%. The UST 10 year is now at 2.69% and down -9 bps from this time yesterday. Recall it was at 2.90% a week ago.

EQUITIES UP STRONGLY
Wall Street surged after a dovish Powell spoke following the Fed's +75 bps hike. It ended up +2.6% for the day. Tokyo is up a more restrained +0.2% in their Thursday trade so far. Hong Kong is up +0.4% and Shanghai is up +0.7%. The ASX200 is up 0.6%, but the NZX50 has got the Wall Street bug and is up +1.8% in late trade.

GOLD RISES
In early Asian trade, gold has risen +US$20 from this time yesterday, now at US$1,755/oz. For the week, that is closing in of a +US$38 gain.

NZD FIRMS
The Kiwi dollar has risen another +30 bps from this time yesterday to 62.9 USc and heading for a +½c weekly rise. Against the AUD we are up +30 bps too at 89.9 AUc. Against the euro we are up at 61.7 euro cents. That means our TWI-5 is now at just over 71.3.

BITCOIN FIRMS
Bitcoin is now at US$23,764 and up another +4.5% from where we were at this time yesterday. For the week we are up 'only' +2.5% so today is only making back some recent retreats. Volatility over the past 24 hours has been high at +/-3.5%.

Daily exchange rates

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End of day UTC
Source: CoinDesk

Daily swap rates

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Opening daily rate
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This soil moisture chart is animated here.

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35 Comments

Interesting take on ol' ratty as an inflation hedge or a 'CDS on the Fed.' Not sure if it's just me, but the relative strength of BTC relative to USD is a surprise as we see institutions default to safety positions.  

But has something snapped? Even JPY is strengthening against USD, which intutitively doesn't make sense given the interest rate differential. 

https://bitcoinmagazine.com/markets/why-bitcoin-is-a-cds-on-the-fed 

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But has something snapped?  Yes!

Economy nowhere near hot being more than $6T (yes, trillion) behind the pre-2008 pace. Do they not know what the term "hot" means? The words "strong", "robust", and "inflationary" don't belong here, either This is the dirty little secret no one will admit Link

RRP today up to 2.30%, 4w, 8w bills way less. 3m bill barely above. Collateral is the biggest threat we face, bigger than gasoline prices (even if most people feel the latter and have no idea about the former). Link

 

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If BTC did bottom out at 20k and does do its usual climb to say 100k I'll be pretty annoyed as I thought 20k would be the bottom and almost bought some. Of course it is better if you actually have some money to invest, in my case it would have been borrowed money. 

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The opinion I linked to is just that. An opinion. And it's not some kind of price projection. The sell offs in gold and silver make sense to me as institutions incrase cash positions. And possibly JPY as Japanese institutions move to their own cash positions.  

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I seem to recall there were a few Gayford haters on here back in the day: https://i.stuff.co.nz/national/politics/300649590/clarke-gayford-receiv…

 

Wonder if any of them would be brave enough to repeat the slander now?

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Fake news right?

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Just my opinion, but the guy does seem to be 'entitled' if you remember the DJ sagas. I would suggest that any transgressions surrounding him would be much easier swept under the carpet compared to the transgressions of an ordinary member of the public.  

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Sheesh J.C.  let go of the conspiracy theories.An ordinary member of the public wouldn't have such lies circulated in the media.

Has there ever been a partner of a politician before exposed to so much vitriol and nasty lies.People should take a long look at themselves before spreading this shite...imagine if it was your child.The scary part is these people walk amongst us,work with us,then get behind an anonymous keyboard and try to destroy folks lives and probably their mental health,shame on them all.

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Has there ever been a partner of a politician before exposed to so much vitriol and nasty lies

Probably Donald Trump. What about the Clintons? 

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Oh please. "Has there ever been a partner of a politician before exposed to so much vitriol and nasty lies."

Are you too young to remember the kill John Key and rape his daughter "song"? Our kind PM has a history of DMing this pleasant chap.

http://nominister.blogspot.com/2014/08/public-service-announcement_27.h…

https://www.nzherald.co.nz/entertainment/avantdale-bowling-clubs-tom-sc…

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There are some rappers who can pull this off. For ex, Too Short. But some of his explicit content was not directed at real-life people. Then there was Machine Gun Kelly who rapped something about Eminem's daughter. Crass. 

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Has there ever been a partner of a politician before that was

a) so heavily involved in the media, and

b) leveraged their position to increase their media profile

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There's a whole Facebook page (Where is Clarke Gayford?) dedicated to him.  Was great for a while.  The usual "What's that bulge on his ankle, is that a bracelet?"  "A mate of mine knows a cop, and the cop said this"  and a few nanny memes. 

But it's now turned into a pit of desperation as attention seekers post screenshots of their attempts at humor on NZ Herald Facebook posts, that garnished no likes because everyone else has moved on from the joke.  

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The NZ govt sycophants need to get over it. It was obvious that it's a p_s take. 

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Haha, all the Facebook Angries now trying to pretend they never really fell for it. 

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Worrying thing is it seems the youth getting trained in journalism think that facebook murmurs or water cooler gossip is actual news and should be printed...
Wait until they are editor in chief .

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Is it time for our 8hr reminder that despite the fact Russia can't maintain its domestic air fleet, manufacture a vehicle with ABS or airbags, or even replace lost military hardware more advanced than an AK-47, that Putin is a master strategist who will bring the west to its knees?

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Too much Vodka, not enough beer. 

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Hah, spirits are a sure fire way to go from 0 to thinking you can solve all the worlds problems in 20 mins.

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“Soaked with spirits, and in vastly superior numbers, these men hurled themselves furiously on the feeble remains of the unfortunate 14th.” Thus entered Baron de Marbot in his diary, post the battle of Eylau 1807. The Russians relied on heavily fortifying their troops with vodka as much as the Royal Navy their sailors with rum. Perhaps there in lies a solution, destroy, contaminate,nobble Russian vodka stocks on which much of  Russia, military, civilians and on, seem to be absolutely reliant?

 

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The Exploits is a great read.

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Napoleon himself agreed with that I read somewhere, some time ago. Left him a bequeath if I remember rightly?

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Where is Carlos67?

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Alias, The Jackal?

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Apparently they’ve run out of keyboards.

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Who has been running the space station?

Not the US.

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I am waiting with baited breath to see Russia's new and improved version they're doing on their own.

But hey, at least they've got lots of go juice.

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Correct! 

Less H & S burden is also correlated with innovational breakthroughs!.

Chinese tech (will attempt) to fill voids left by the West. 

Gas is cheap and plentiful. 

Must not discount Russian professionals. 

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CIRCUNSTANCES

Bloody interns on the Friday beers early again?

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I get orbital for the first syllable, positions for the third.

The middle one speaks for itself.

:)

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Interesting word.

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Oh look over here.

The RBA’s big mistake is hiding in plain sight: Effectively using housing as the main tool to stimulate the economy and in the process generating a debt-fuelled property boom that vastly worsened inequality and is likely to be in the process of ending with an almighty bust.

The RBA is not the only government body responsible for this: APRA applies a generous risk-weighting to banks’ real estate lending, which turbocharges the effect of low interest rates, funnelling cash into higher land prices.

Neither the RBA nor APRA takes any responsibility for the distortions the combination of these policies has caused. The inequality and a dire lack of housing affordability – not their problem

https://thenewdaily.com.au/finance/finance-news/2022/07/28/reserve-bank…

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Nothing to see here, well-run country free of the sort of shenanigans you get in NZ.

Quick everyone, to the airport.

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Juvenile crime, brazen and audacious, is in the news.

What's not in the news, drug abuse.

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