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
No changes here yet.
TERM DEPOSIT/SAVINGS RATE CHANGES
First Credit Union, Heretaunga Building Society, and Christian Savings all changed TD rates today. Christian Savings also raised their call rates.
NO RECESSION YET
The Monthly Employment Indicator from StatsNZ shows that the number of filled jobs rose +0.6% in April and more than analysts were expecting. Filled jobs are up +3.8% from a year ago, the fastest pace of growth since January 2022. The annual pace of jobs growth suggests that hiring is outstripping the growth in the working-age population. This acceleration has no doubt been helped by the resurgence of migrant arrivals. Net inward migration has risen to more than +65,000 people over the last year, and recent months have been running at a pace equivalent to more than +100,000 a year. This is the most timely data on the labour market and it is not flashing any recessionary signals yet, if anything just the opposite, observes Michael Gordon at Westpac
'NOT DOING THAT AGAIN'
Today's release of the RBNZ disclosures about their foreign currency holdings (F5) reminds us that it has been almost eight years since the central bank last made a [half-hearted] attempt to influence the NZD rate with direct market intervention, and 16 years since them made a real effort, risking significant funds. Those were experiences that have kept it away from trying it since.
MARKET ADJUSTING IN FAVOUR OF FHBs
Our First Home Buyer Report shows there are early signs that first home buyer activity could be starting to stabilise with an improving outlook for them.
RARE BIPARTISAN DEAL SCRAPPED
Meanwhile, Christopher Luxon’s National Party has scrapped a bi-partisan housing agreement that Willis and Bishop had previously negotiated and will instead allow cities to choose where and how to build 30-years of growth.
ANIMAL SPIRITS SURGE
The Japanese share market tear is extending, hitting new record highs today. The Nikkei225 is now at an index level of 31,350 which is +7.7% higher than a month ago and +22% higher than at the start of 2023. (The record high in the previous up-cycle was 26,477 in 1991.)
FORCED INTO AN INDEPENDENT INVESTIGATION
SkyCity Entertainment (SKC) said it will hire an independent expert to review its anti-money laundering and counter-terrorism programs as it waits for a South Australian investigation into whether it should hold a casino licence in that city. No such independent investigation into its NZ casinos have been undertaken. Casinos and money laundering, what could go wrong?
JOINT & SEVERAL LIABILITY
In Australia, the turmoil at PwC is getting ugly. There are about 900 partners an many of them will be very angry at what a few of their tax partner colleagues have wrought for the firm. And partners are jointly and severally liable for the huge costs which are inevitably coming. Many good people are about to be hurt significantly. The firm has stood down the nine partners at the center of their troubles and the Chairman has been jettisoned. But none of this is going to save them. Now the Australian Prime Minister wants those partners at the center of all this named. And the MNCs who took the PwC tax advice will be sweating their situation.
SWAP RATES BECALMED
Wholesale swap rates are likely unchanged today with international investors on the other side of these transactions on holiday. However, the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is up +1 bp at 5.70%. The Australian 10 year bond yield is now at 3.71% and down -5 bps from this time Friday. The China 10 year bond rate is little-changed at 2.74%. And the NZ Government 10 year bond rate is at 4.43% and down -2 bps, and still above the earlier RBNZ fix at 4.41% which is down -1 bp from Friday. The UST 10 year yield is now at 3.81% and a minor -1 bps lower from Friday.
EQUITIES MIXED
The NZX50 is up +0.9% in late trade in a strong start to the week. The ASX200 is up +1.1%. Tokyo is up +1.3% in early trade today (see above). Hong Kong is struggling, down -0.4 in their early trade. Shanghai started higher but quickly lost any gains. The S&P500 futures indicate Wall Street will open +0.4% higher when they return on Wednesday NZT. But there is a long way to go, and the uncertainty of the Congressional debt-ceiling vote still to play out.
GOLD ON HOLD
In early Asian trade, gold is at US$1945/oz and unchanged.
NZD HOLDS
The Kiwi dollar has held from this morning's open, now at 60.6 USc. Against the Aussie we are little-changed at 92.7 AUc. And against the euro we are also little-changed at 56.5 euro cents. That means the TWI-5 is still at 69.4. Markets closed for the weekend in Europe and the US, and the US on a long weekend holiday has taken all the impetus out of currency markets.
BITCOIN RISES
The bitcoin price is firmer today, now at US$28,123 and up +2.8% from this morning's open. Volatility over the past 24 hours has been moderate at just under +/- 2.5%.
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27 Comments
Golly! A lot of tempting fate in the above.
"The Kiwi dollar has held from this morning's open" + "the RBNZ...reminds us that it has been almost ....16 years since they made a real effort to influence the NZD rate with direct market intervention "
Is a swan dive from the high board, with double twist and tuck about to arrive? Given that even the bank commentators are starting to mumble about the OCR needing to go higher; could be.
Filled jobs are up +3.8% from a year ago, the fastest pace of growth since January 2022. The annual pace of jobs growth suggests that hiring is outstripping the growth in the working-age population.
That jobs data is fascinating - all of the real jobs growth is on the South Island and in Auckland. These are same areas that are also seeing increases in real terms retail spending (others are seeing decreases). I would love to look at it in more detail, but I suspect that what we are seeing here is:
a) One off impact of some return of tourists (South Island) and migrants (Auckland)
b) Some areas of the country suffering disproportionately from interest rate hikes. I am only guessing here, but it is possible that there are far more winners from higher rates in the South Island (savers, older families) than there are losers, whereas in Wellington where you have the double whammy of public service wage constraint and families with crippling mortgages, we are seeing real drops in aggregate demand (lowering demand for jobs).
Also worth noting that the the number of jobs filled by under 20s, which were up 20% year-on-year a few months ago are now cooling quickly.
Number of young people not in education, employment or training is at an all time low. It looks to me like a lot of under 20s are working part-time to either contribute to family expenses or feed themselves whilst at college. It will be another 9 months before we get the detailed data to have a proper look.
Of course Luxon was in there saying how terrible it all is. Obviously an opposition leader is going to say that, but it would be nice to hear the Nats costed analysis of how they would combat inflation. Cutting little bits of government spending are not going to make a big impact. And Australia also have inflation, they had it under a conservative government too.
They know the basic gist. Govt is demolishing heritage villas and forcing people to live like sardines in 3 story apartments that are being built right next to you, blocking out you sun and views and tenanted by gang members. It doesn't matter that none of this is actually true.
You'd be surprised how many people know about the 3 story rule, especially in the leafy suburbs in Auckland
Hardly exists at all in Auckland, nor between Auckland and Hamilton. In the rare scenario it does, the land ownership is extremely fragmented. Good luck coordinating that.
I guess the likes of Winton are lobbying Luxon and co hard. Winton’s ‘Sunfield’ is guaranteed to get fast-tracked if National win the election.
The Japanese share market tear is extending, hitting new record highs today.
You can see why JPY is being closely connected to CNY. Japanese trade is really started to get hit. Even though Q1 GDP was finally positive, the future is far from good or bright. Even nominal exports are now falling while volumes are way down (like Germany if not nearly as bad). Link
Oh yes.
As the Bitcoin mantra goes: "not your keys, not your coins." I've seen several folks push back against this line of thinking by making the comparison to ownership of other assets. One particularly incredulous person recently posted something along the lines of:
"This perspective of ownership is ridiculous; almost no one takes possession of stock certificates from their brokerage. Are you claiming that no one owns stock?"
Yes, this is exactly what I'm claiming. While you may have a legal claim to an asset that is controlled by a third party, if you don't actually control it then there are innumerable events that could result in your ownership claim being rendered moot.
https://blog.lopp.net/how-the-sec-nearly-destroyed-my-retirement-accoun…
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