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
TSB raised its floating rate by +50 bps to 7.55%. Midland Income Fund also raised their floating rates, but by +100 bps.
TERM DEPOSIT RATE CHANGES
BNZ raised term deposit rates today and among the rises their six month rate is now 3.10%. Kookmin Bank and HSBC also raised rates. Cooperative Bank raised its six month TD rate to 3.00%. Update: ANZ has moved quickly to match BNZ's 3.10% six month rate.
PERSONAL LOAN RANGE CHANGE
Cooperative Bank tightened its rate range for personal loans from 6.99%-19.99% to 6.99%-17.75%.
SPRING IS HERE
Today is the last day of Winter, Spring starts tomorrow and banks will be turning their attention to the upcoming Spring real estate selling season. From this vantage point it looks like a lackluster period is ahead, inhibited by highish home loan interest rates, and excessive numbers of houses for sale. But really, who knows? ASB expects house prices to keep falling until mid-next year and interest rates to remain high until 2024.
GONE BY JUST AFTER LUNCHTIME
The Government has dumped the plan to extend GST to funds management fees after criticism & National leader Luxon saying he would unwind it
OFF THE FLOOR, BUT STILL NEGATIVE
Business confidence has climbed off the floor, but expectations of future inflation still remain "far too high", according to the latest monthly ANZ Business Outlook Survey. ANZ chief economist Sharon Zollner said overall business confidence lifted 9 points in August to -48, while expected own activity rose 5 points to -4.
HOUSE BUILDING FADES
July building consent levels for dwellings were little-changed in July from June, at 4100 for the month. This is however almost -3% lower than year-ago levels. Consents were down -25% for houses in July, down -21% for apartments and down -20% for retirement units. But they were up +48% for townhouses from year-ago levels to 1853 nationally in the month. 1514 of them were in Auckland. There were only 311 houses consented in the Queen City in July, the lowest of any month since January 2017 and the lowest of any non-Christmas month since 2012.
FADING FAST
Housing loans rose +$848 mln in July from June the smallest monthly rise in five years (excluding the pandemically affected April 2020 month). Year-on-year they are up +6.2% but the pace is slowing significantly now. However, total housing loans now exceed $340 bln for the first time ever. More here.
ON THE RISE
Bank lending to business is picking up, although it is more lumpy than residential lending. But it is up +8.5% year-on-year to $121 bln.
UP & SHIFTING
Household deposits are shifting out of transaction and savings accounts and into term deposits and the shift is quite large. Term deposit balances rose +$2.7 bln in July, and that was on top of +$2.9 bln in June after the prior three months all grew by more than +$1 bln. They are up +$12 bln in a year. The incentive of rising interest rates certainly motivates savers. Meanwhile savings account balances fell -$700 mln in July from June and are down -$2 bln in the past four months. And household transaction account balances fell -$1.2 bln in July from June. So all up that means household bank account balances only rise +$800 mln in the month but are up +$17 bln in a year.
PRODUCTIVITY IMPAIRED
Ports of Auckland has sailed into the red in the latest financial year thanks to the automated container terminal project their masters forced them to axe. The loss reported was more than -$10 mln. Their inability to complete important productivity improvements will keep them consigned to being the least productive port in the Oceania region (see pg 57).
LOWER SUPPLY, HIGHER DEMAND
Fonterra said its July milk collections were very strong in the South Island, but weak in the North Island. Meanwhile they report that demand is up strongly everywhere - except from China.
NOT JUST HOUSING
Total construction work done in Australia unexpectedly fell by -3.8% on a quarter-on-quarter basis for the three months to June, sharply missing expectations of a +0.9% rise and following a -0.9% fall in the first quarter. It was the second straight of quarter decline in construction work done, due to a fall in building work done (-4.6%), residential (-6.8%), non-residential (-1.1%), and engineering work (-2.7%). Don't move to Australia for a construction job.
UNINSPIRING
The official measure of Chinese factory activity contracted for a second straight month and the fifth decline in the past six months. These signs of weakness are building up now. Meanwhile the official Chinese service sector PMI is still expanding but at a slower pace. They can take some heart from that expansion even if it is their slowest in three months. The extended weakness has some analysts reducing their 2022 growth estimates down to just 3% and for such a large economy, that is a long way from Beijing's target of "about 5½%".
SWAP RATES HOLD HIGH
Wholesale swap rates are probably little-changed today but holding recent rises. Our chart will record the final positions. The 90 day bank bill rate is unchanged at 3.47%. That is its highest since July 2016. The Australian 10 year bond yield is now at 3.62% and down -6 bps from this time yesterday. The China 10 year bond rate is at 2.68% and also down -2 bps. The NZ Government 10 year bond rate is now at 3.98% and up +1 bp from this time yesterday, and now the same as the earlier RBNZ fix for this bond which was up +1 bp also at 3.98%. The UST 10 year is now at 3.11% and up +2 bps from this time yesterday.
EQUITIES WEAK
The S&P500 fell -1.1% in Tuesday trade, staying down all session. Tokyo is down -0.6% in Wednesday trade taking back about half of yesterday's rise. Hong Kong is down another -1.3%, and Shanghai is down -0.8% in early trade. The ASX200 is down -0.2% in afternoon trade after recovering some larger earlier falls, and the NZX50 is level-pegging today, and sort of bucking the worldwide trend.
GOLD FALLS
In early Asian trade, gold is down -US$6 from its level this time yesterday, down to US$1,722/oz.
NZD STAYS LOW
The Kiwi dollar is now back down at 61.3 USc and a dip of -¼c from this time yesterday. Against the AUD we are at 89.4 AUc. Against the euro we are at 61.2 euro cents soft. That all means our TWI-5 is now at 70.5 and down -30 bps since this time yesterday..
BITCOIN WOBBLES
Bitcoin is wavering today, now at US$20,378 and little-changed from this time yesterday after recovering a big dip. Volatility over the past 24 hours has been moderate at +/- 2.6%.
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46 Comments
I see the Aussies are also ruminating over the subsidies and tax incentives surrounding their Super system:
Taxpayers are spending $200 million per year on concessions for Australia’s 100 largest self-managed super funds, with new data showing the 32 biggest accounts each have more than $100 million assets, including one mega-SMSF with $401 million.
They're not assets though are they? I thought they were shares?
Which are, at this stage in human/planetary affairs, belief-backed pieces of paper...
They always were.
All of us are destined for oblivion. You could relive that all day, every day. Or you could fill the time by living.
Relax PDK, everything's out of control.
https://www.nationmaster.com/country-info/compare/New-Zealand/Singapore…
(acknowledgement to Wayne Senior Fairbrother, comment on Bob Jones "Nopunchespulled")
"Singapore, like NZ, was colonised by the British, but for a longer time, and much more harshly. Yet despite that, Singapore’s population don’t seem to use colonisation as an excuse for, and a license to commit crimes? So why is NZ so different? Food for thought. Some interesting statistics from about 10 years ago: NZ versus Singapore. With similar population size. NZ has: 58 times more serious assaults. 57 times more assaults. 57 times more burglaries. 45 times more gun crime. 31 times more drug-related crime. 27 times more vehicle theft. 11 times more drug trafficking offences. 10 times more rapes. 3 times more murders. We are crime central compared to Singapore. However, Singapore has 38 times more Police Officers than NZ"
I was about to note that they will still hang you for certain crimes and cane you for lesser ones. Perhaps quite a disincentive to commit crime in the first place?
Sorry for the repost delay. I also understand that all Singapore males have to spend a couple of years (?) in National service (armed forces) which may instill some discipline & community service ethos.
Everyone gets a govt subsidized house in Singapore. Last time I was there in 2018 I recall a scheme where if you opted to ride a bike to work they gave you the bike and all the kit. Seems kind of pointless to commit crime when the wealth is distributed among society properly ;) .
Everybody ?
https://www.hdb.gov.sg/residential/renting-a-flat/renting-from-hdb/publ…
"Your total household gross income should not exceed $1,500 per month"
"You will not be eligible if any of your children is:
Able to house you in their home
Financially able to provide other housing options for you"
Had a quick google, you refer to the rental scheme for low income earners. Household ownership is 90%, achieved by socialising the land and making profiteering illegal on a basic human need in the 60's. Perhaps someone with feet on the ground can chime in. Seems like you're guaranteed a very reasonable priced home if you simply participate in society in Singapore.
You have to abide by some fairly strict rules and guidelines.
Basically, you can have a higher level of state support and equity if you can achieve something close to a monoculture. It seems to be far rarer in societies that promote individualism over the state.
Singapore is ruled by an explicitly fascist party (Read about Lee Kwan Yew's Cambridge University experience in his Biographies) following the economics of Fredrich List, the national policies for unification and state building deployed by the National Socialist and Italian Fascist Regimes. They combine Anglo common law and law driven culture with a chinese confucianist government, bureaucracy and administration.
They also have a state directed society which forces capitalism to its will and directs its population with will. Those police are largely conscripts too. We could learn significantly from Singapore.
The official measure of Chinese factory activity contracted for a second straight month and the fifth decline in the past six months.
The $ is going up again, not because of rate hikes though that's what everyone will say. Just in time for September, as said in India, "rapidly tightening financial conditions." CNY DOWN = unnecessary confusion https://youtube.com/watch?v=O-6qgQ Link
I got this electricity bill today, how in the name of God is this possible, we're a small coffee shop in westmeath Link
Pity they didn't have a value in the last bill to show if it had gone up. Fake news maybe.
Possibly a substantial meter reading error at some time.
Yep I would say so.
You can see your last bill says none so probably a new connection and last occupiers left the fridge door open and heat pump on 240c..just a guess no data to back that up
Oh dear, I mean that is a 3 month power bill from June to August.
- Iberdrola power in Ireland charge ¢41.69 per kWh during the day and an annual standing charge of €287.85.
- In 3 months this coffee shop used 230 kWh of power (€9836.92-€287.85)/¢41.69
- They're open 6 days per week, 8 hours per day, that's 624 hours operating in 3 months. So they used on average 370 watts per hour of power.
- Newsflash, heating up water and food is quite energy intensive.
It clearly states its a 73 day bill and yes you are right to assume that UK power and gas bills are issued every three months - I lived in London for 17 years. Add this bill to staff and rent costs and any small business will struggle.
Ah yes I glazed over the dates/specified days.
Should someone really be in business if a power bill like this comes out of left field? It's not like the power company thumb sucked a figure. The power rates are on their website, the appliances will generally come with power ratings. "Hey I'm in business lol, but I have no idea what my running costs are". What's next, a linehaul truck driver sharing their fuel card statement?
Your maths is a bit out.
It is 22,904 kWh. At 624 hours that is 36.7 kWh per hour. That is a hell of a usage. Although a lot of things, hot water, fridges/freezers etc... will be using power 24/7. So it is probably fairer to look at total hours. Which is 73*24 = 13kWh per hour. Definitely on the high side, but not ridiculously so for a cafe running 48 opening hours, and probably an additional 12-18 pre/post customers. With the heatwave, I am guessing they are also seeing the impact of aircon running continuously at maximum.
Your message still stands though, Lesson to the Cafe owner, monitor your usage if you want to make a profit.
Personally, it's been a while since I lived in Ireland, but I remember power prices were high as they imported most of their electricity from the UK. We definitely got a bill shock the first bill, and made what changes we could.
Ah I was missing the decimal point. Should have been (€9836.92-€287.85)/0.4169.
300 - 400 watts did seem awfully low (that's one desktop PC's worth of power).
The financial crimes regulator has launched an investigation into Perth Mint, Australia’s biggest gold and silver refiner, over what it has described as compliance concerns, and ordered the appointment of an external auditor under the Anti-Money Laundering and Counter-Terrorism Financing Act.
As one of the first buyers of the Perth Mint Gold Tokens (PMGT), this is of quite high interest. Not sure if there is any connection. If it's all about sale of physical, things could get interesting.
https://www.afr.com/companies/mining/financial-crimes-regulator-probes-…
Suspect it's not checking funds source and not a bookeeping error in matching sales to physical availability.
Suspect it's not checking funds source and not a bookeeping error in matching sales to physical availability.
Possibly. All a bit light on the detail. Perth Mint has been targeted by the hardcore goldbugs before with accusations of being in cahoots with rehypothecation demons JPM. For ex, can they really deliver physical on claims.
Interesting research piece showing that 'There Is No Evidence that Population Growth Drives per Capita Economic Growth in Developed Economies.'
Japan's per capita GDP has grown more than Australia's and Canada's suggesting that the population ponzi is bad for economic growth. On a positive note, NZ has performed better than Japan on per capita GDP growth. Biggest difference is that Japan's GDP has been much more production driven.
https://cis.org/Camarota/There-No-Evidence-Population-Growth-Drives-Cap…
Japan is a funny country IMO. Yes it is quite rich, but considering they make so much stuff including a lot of cars and electronics, they don't seem that much richer than here. I'd definitely take our lifestyle over theirs: I like their population density, public transport, walkability, nightlife, etc but the flipside is the amount of working hours they do with very little holidays.
Japan is a funny country IMO. Yes it is quite rich, but considering they make so much stuff including a lot of cars and electronics, they don't seem that much richer than here. I'd definitely take our lifestyle over theirs: I like their population density, public transport, walkability, nightlife, etc but the flipside is the amount of working hours they do with very little holidays.
Japan has many public holidays by the way, much more than NZ. After living in Japan, I like the lifestyle. Actually the 'great outdoors' of Japan can exceed that of NZ IMO. If you're a winter sports kind of person, Japan is far superior.
By the way, I recently read about a Japanese start-up company offering USD100K salaries for the right talent. Kind of unheard of.
Most of the people I met there were shocked that I could take time off work and afford to fly over. It seemed that overseas holidays were just for the very rich. Catching the train at 9PM with my friend that lives there I commented that it was amazingly busy at that time, he said this is rush hour, people have only just finished work. I loved the place, but I wouldn’t want to work there, I prefer my NZ salary and work conditions.
I love Japan but I definitely wouldn’t want to work there, bar some exceptional opportunity with good working conditions.
But despite the greater number of public holidays, the amount of annual leave that most Japanese workers get / take is pretty miserable.
My brother in law has been pretty much worked to the grave, even getting more than 2-3 days of annual leave in one go is very difficult.
I am sure there are exceptions, and it might be changing, but generally work-life balance is close to non-existent.
In the mid 90s you could earn that much there teaching English with a high school level education.
Really?
I was there for a few years in the mid 90s teaching English on the JET programme. Nowhere near $US100k, was more like $NZ55-60k which was still pretty good money at the time for someone fresh out of uni.
Was the equivalent of $50 an hour, largely private tutoring to individuals and smaller groups, and private schools. That involved sourcing the work yourself, although at the time there seemed to be an abundance of work.
I have seen recently capsule hotels advertising long term stay for $350 a month, includes gym, free food, free drinks and 3 free alcoholic drinks a day. The idea of living essentially for free and walking the streets all day has some appeal.
Did you do it?
Yeah but only part time as was studying there myself. My partner was full time. Mostly central Tokyo.
Im happy to go back to Tokyo for a couple of weeks to visit, but if I were going back long term it'd be somewhere smaller, Fukuoka or Hiroshima or something.
I don’t think many Japanese people have buckets of household money, but the country has a ridiculous amount of infrastructure, which is where a lot of it goes. Small rural villages with fancy public sports and other facilities that barely get used… a weird and wonderful place,
Interest alumni Jenni T has been fiercing up the cosy NZ directors club with some fantastic investigative journalism.
Assuming you mean this (paywall):
https://www.nzherald.co.nz/business/a-resignation-and-an-apology-accomp…
Croaking Cassandra has been all over it for weeks
https://croakingcassandra.com/
Disclosure: I'm a Chartered Member of the NZ IoD for over a decade & have been fairly critical of some aspects from time to time. However this appointment is a RBNZ & Govt issue not a "Directors cosy club". The IoDs Principles require membrrs annual recommitment, including ensuring the avoidance of perceptions of conflicts of interest which are considered as wrong as actual ones
I realise these were Treasury appointments, it is still a very cosy club as has been demonstrated. How a director of a regulated entity was appointed to the Board of it's regulator is embarrassing beyond belief. Cossssyyyyyy
Aotearoa, the land of lots of cronyism (if not explicit corruption)
Up to one-third of all Australian and US companies could be "Zombies"
Since 2019, we have been warning about the rise of "zombie companies" kept alive by perpetually cheap money care of the near-zero interest rate and QE-to-infinity policies of profligate central banks in the period following the GFC. The worry is that as interest rates now normalise, many of these zombies could fail to survive, creating waves of corporate defaults the likes of which has not been seen since the 1991 recession in Australia and during the GFC in the US.
https://www.livewiremarkets.com/wires/up-to-one-third-of-all-australian…
The phrasing of these pieces frames the issue the wrong way. It is not a "worry" that unprofitable zombie companies will fold, it is a good thing. Labour and capital tied up in unproductive enterprises is released back to the market to be put to better use.
Perth Mint...my guess( after a quick surf) is they have no problems supplying physical and that is likely why they have attracted the attention of the regulators....
Oh my
Japan's biggest city gas supplier signs a deal with Russian firm for long-term natural gas contract
Sakhalin had previously halted a shipment of liquefied natural gas to an Asian client due to payment issues and delay in signing a revised contract, Bloomberg reported. The revisions ask buyers of Russian LNG to pay with currencies other than the US dollar if western sanctions result in payment issues.
https://markets.businessinsider.com/news/commodities/russia-natural-gas…
Since it is maori language week (I think), why don't all the maori MPs (especially Marama) use their native tongue for ALL their communications. Marama is soo keen to childishly promote a foodstuff from a company that seized on a couple of token maori words to gain maximum exposure. Well done to them. Speaking in maori and showing us how it is done would be much more positive. Or do MPs think that the journalists can do the job for them when they introduce the news. I better not call the MPs lazy and misguided
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