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 raised its floating rate, and for existing clients it will apply from September 1, 2022. The Cooperative bank trimmed tow short fixed home loan rates. More here.
TERM DEPOSIT RATE CHANGES
Rabobank raised a number of its savings account rates, and their 3mth TD rate. The Cooperative bank also raised a couple of short TD rates, along with most savings account rates. And ASB also raised savings account rates, but for some it wasn't the full +50 bps. Xceda Finance raised all rates 5 months to 5 years.
ORR AT JACKSON HOLE
RBNZ Governor, Adrian Orr, will attend the global central banking conference in Jackson Hole, Wyoming, on 26 August. He will not be giving a speech at the Economic Symposium, but will be interviewed by Bloomberg TV at about 4.30pm, US Mountain Time, on August 25, which is 10.30am NZ time on August 26, 2022. (No other RBNZ manager is going.)
SIMPLIFICATION
The Government has simplified its control over Kiwibank, shifting to a direct stake in the way that most people assumed already existed. This is after one Crown shareholder, NZ Super, had wanted the option of private sector investment in the bank to help fund the bank's growing requirements.
PUCHING BACK ON AUTOMATED FRAUD
Visa is moving to force merchants to upgrade their protections against bad actors trying to get past card security systems. Requirements will include Turing tests (CAPTCHA), blocking logins after a specified number of attempts, and limiting the number of transactions per minute. Visa says their research shows more than half of Kiwis have abandoned online purchases, with the top reason that they were concerned about security.
THE NEW WAY
With the Marsden Point refinery now decommissioned and 70% disassembled, the new distribution system is launched with a large refined product ship now due to arrive. The STI LILY is classed as LR2 in size, which is among the largest refined product ships in the world. With a gross tonnage of 63,000 and deadweight of 110,000, the ship is 250m in length and is capable of carrying up to 120ML of refined product. It will be delivering fuel sufficient to fill half a million cars, fuel 9,000 flights between Auckland and Wellington, and keep 35,000 trucks on the road. It will fill nine of Channel Infrastructure’s tanks, including five of its largest, and is sufficient to meet eleven days’ worth of Auckland and Northland’s demand. Obviously, it is going to be a regular visitor, replacing crude oil tankers.
GETTING EXPENSIVE
Manawa Energy (ex-Trustpower) (MNW, #41) is looking for up to $150 mln in bond financing, essentially rolling over a December 2022 $125 mln bond. The new bonds will be unsecured, unsubordinated, fixed rate 5 bonds, and are expected to have a yield of swap plus a margin of 1.4% to 1.6%, set on Thursday, August 25, 2022. (Based on today's 5yr swap rate, that would give them a yield of about 5.45% - but rates are rising so the Thursday fix will be different.) The retiring MNW150 bond had a coupon of 4.01%.
CHINA CUTS RATES
The People's Bank of China cut their one-year loan prime rate by -5 basis points to 3.65% from 3.7%, while the five-year rate was cut by -15 basis points to 4.3% from 4.45%. A cut was expected, but -10 bps for each. Most new and outstanding loans in China are based on the one-year loan prime rate, which is now loosely pegged to the central bank's medium-term lending facility rate, while the five-year rate influences the pricing of mortgages.
SWAP RATES ROCKET HIGHER
Wholesale swap rates are probably sharply higher today on the global influences we noted this morning. There is curve steepening going on too. The 90 day bank bill rate was up +1 bp to 3.38%. The Australian 10 year bond yield is now at 3.57% and up +9 bps since this morning. The China 10 year bond rate is at 2.64% and unchanged and its lowest since May 2020. The NZ Government 10 year bond rate is now at 3.70% and up +13 bps from this morning, and now well above the earlier RBNZ fix for this bond which was up +4 bps to 3.56%. The UST 10 year is now at 2.33% and up +11 bps from this time Friday, but up only +2 bps from this morning.
EQUITIES MIXED
The NZX50 slipped last week -0.4% on some core weakness at FPH which was down almost -4.8% for the week. But today, this market is up +0.5% helped by FPH which is up +2.5% is a good partial rebound. The ASX200 is down -0.8% in afternoon trade today. This week, about a quarter of all ASX companies report earnings. Tokyo is down -0.4% in later morning trade. Hong Kong is flat to start their week. Shanghai is up +0.4% in early trade. The S&P500 futures are down -0.3% ahead of Wall Street's opening. More than 2500 US listed companies report earnings this week.
GOLD HOLDS
In early Asian trade, gold 'risen' +US$1 to US$1,747/oz.
NZD A TAD FIRMER
The Kiwi dollar is up +20 bps from its low this morning at 61.9 USc. Against the AUD we are unchanged at 89.8 AUc. Against the euro we are firmish at 61.7 euro cents. That means our TWI-5 is now at 71 and a tad firmer than this morning's open.
BITCOIN HOLDS
Bitcoin is virtually unchanged from this morning at US$21,432. Volatility over the past 24 hours has been modest at just on +/- 1.6%.
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36 Comments
If you want to see some worked up and betrayed feeling people, go on Reddit NZ and read through the threads reacting to Michael Wood's announcement yesterday re: migrant labour.
Yes, National would be just as bad - if not worse - but at least they are a more honest devil in many respects. Better to be kicked in the teeth than stabbed in the back. It's sad watching a community of people who drank the Kool Aid realise there's something rather unpleasant in the cup.
I guess the one thing the main parties agree on is that nothing must seriously threaten the interests of the business lobby and the property sector. They just disagree slightly on how to achieve this aim.
It's also sad watching good friends and family members basically forced to leave NZ to have any chance of making it in life.
Living up to your profile name with these words.
Do go on …
Is that r/newzealand on Reddit ??
I don't have a Reddit account, but they have popped up in web searches.
Aren't they an extremist group? Every time I've had the misfortune of clicking on an article shared by them, the comments have been horrific..
..like actually beyond nasty or inappropriate - literally comments encouraging and calling for the murder of New Zealanders and people abroad. It would be prudent for the SIS, GCSB and clandestine intelligent agencies to keep an eye on that group. A very concerning group from what I can tell.
UPDATE: Just checked them out again now - seems like a large group, 300K plus.. perhaps people reinventing themselves with additional profiles and/or a large overseas component?
Looking at their 'sub reddit' (if that's the right term) now, they seem to have cleaned their act up, certainly some strange ducks on there, but as the song goes, "people are strange".
If you want insanity, try r/conservativekiwi.
As a general rule I stay away from Reddit, though I did have respect for "the internet's own boy" Aaron Swarts, may he R.I.P.
Plenty of useful sub reddits, plenty of complete dumpster fires too, just avoid anything political or NZ related and stick to subs about your hobbies and interests.
Yes. That sub is run by far left extremists. Best to avoid.
I don’t get it. What was the teeth kicking? Allowing much needed migrant labour?
Yes, keeping the bottom end of the labour market from being able to demand decent wages.
Will many migrants actually come though?
They can probably choose between at least NZ and Australia.. you'd pick Australia surely?.. unless you had a support network or a really decent job opportunity here.
Is Oz as easy to get into as a migrant?
At the moment I'd suggest easier.
I understand Australia is hard to get into source: multiple people who got into here, but has Australia as their first choice
We have the third highest minimum wage in the world, and even businesses paying above minimum are struggling to fill unskilled jobs. There just aren’t enough employees.
We probably have one of the highest costs of living at subsistence level to go with it though.
Jimbo, people have worked out that they simply cannot afford to do a minimum wage job in NZ, you are actually going backwards while working full time. Unless you are under 20 and still living at home, it simply doesn't fly.
From what is said above, it sounds like NZ Super didn't want to put any more money into Kiwibank, itself.
The sad part is that National are nowhere near ready to govern, while Labour fumbles, bumbles & stumbles its way on to... well, I'm not quite sure where actually. They're dismantling democracy anyhow. All the other details they'll tell us about after they've done it.
The sad part is that National are nowhere near ready to govern, while Labour fumbles, bumbles & stumbles its way on to... well, I'm not quite sure where actually.
Agreed. There is no real vision among those who can realistically hold power in NZ. All that can really happen is maintenance of the status quo with tinkering at the edges. OK, there is co-governance, but that is destined to fail in some way. There is no long-term strategy to co-governance that anyone is aware of (except perhaps among the bureaucrats).
I think there is nothing more illustrative of all this is the tourism agenda: attracting high net-worth tourists -- the same tourist that every country in the world is vying for. No research on who these people are or strategy on how to get those people here. Same old media campaign (so goddamn predictable with the wide pan shots of misty alps; intriguing glimpses of the indigenous culture; and psuedo spiritual messages rehashed from the previous campaigns) and shows that the NZ is tired and lacking in innovation and ideas.
PM smiled in interview about "bullied" MP. I don't know anything about being an MP. The thought of being a Congressman in the US vs MP in NZ, makes me smile.
I find her persona patronizing.
Don’t think I would really enjoy living next door to any one politician but have to say the insincerity I have come to perceive in this PM would undoubtedly catalyse construction of an 8ft high fence.
I would enjoy the fresh fish from Clark ..and Jacinda playing some tunes on the decks
And key, Joyce, Brownlee and Co weren't?
Not disagreeing, just sayin'.
How long a list do you want? Where would you start? I would start with Mr Sydney Holland. I witnessed visiting my father regarding urgent arrangements air lifting personnel to combat the wharfie strikes. He was so excited about it, he forgot to take off his hat!
Very very patronising. I switch off the radio / tv whenever she appears.
I watched her interview and Mr Sharma's interview today. Very awkward for both of them. On that evidence, I would lend neither of them $10 'til payday, as i would probably never see it again.
ASB ups the floating mortgage rate, joining all the others. The option of floating and waiting for possible rate cuts will cost those that want to take that route. Also, I see the average IQ of Wellington is going to take a sharp dive tomorrow when the flat earth protesters arrive..........
Especially with all the infants and toddlers they'll no doubt bring with them.
Sourcing from India or China could bring the price down but i can't see the buyers of any NZ fuel company trying that.
IIRC, Diesel was like 1/4 the price of petrol way back in the day when I first started filling a tank. This is why I think Electric will be no cheaper in the long run, they basically whop you what you can afford to pay, it will be all be a road tax and crazy electricity charges for vehicles.
Diesel was 48c when petrol was in the 80c range, I doubt it was ever 1/4, the base product is more expensive, so to be 1/4 the price would imply that taxes on petrol were more than 2/3rds the pump price.
And how will electricity ever be higher for cars? You charge at home 95% of time and it goes through the same meter as all your home electricity. Plus off-peak rates will alway be cheaper than peak if you go for time of use plans.
If not the electricity, then the RUC will hit you. That's why diesel has been so cheap for so long despite its expensive refining- you don't pay fuel tax. Historically this was because farmers with diesel powered tractors objected to paying the fuel tax to build roads they wouldn't use. Hence RUC.
With petrol consumption going down, I can't see how RUC will not be the prime source of revenue and the fuel tax will be reduced to a carbon tax.
Ruc is 8c per km. Less than a third of what I was paying in fuel. Or about the same as a years servicing on an ICE.
And rumors are they are thinking about RUCs on everything, petrol cars and EVs as well as diesels. Either way, the cost of electricity isn't going to be jacked up like Carlos suggested.
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