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
Heartland Bank cut its fixed rate out to two year by between -15 bps and -25 bps. But it cut its three year fixed rate only marginally (-4 bps). Then Westpac chimed in with rate hikes for fixed terms 18 months to 4 years.
TERM DEPOSIT/SAVINGS RATE CHANGES
None to report today.
UNDER THE WEATHER
Perhaps confirming the GDP retreat, the BNZ-BusinessNZ PMI contracted further in May. But the weakest region was the central NI areas that bore the brunt of the storms. However, Auckland expanded, and nationally new orders rose.
NZGB YIELDS RISE AGAIN
This is a day late, but should note that the latest NZGB tenders offered $400 mln and were met with 100 bids worth almost $1.2 bln. From the equivalent tender two weeks ago, yields rose across all maturities by +25 bps, with the May 2028 bond yielding 4.48% for 5 years, the May 2034 yielding 4.53% for 9 years, and the May 2051 yielding 4.60% for 28 years. It is a remarkably flat long yield curve now.
FAKE TD COMPARISONS
The FMA is warning of a 'phony' interest rates comparison site that is likely harvesting information for fake investments. There is no need to use an intermediary in New Zealand. There are no fees on bank or non-bank term deposits, and comparison sites like ours are free for you to find institutions you can contact directly.
NO NEW GEAR FOR CLEANUP
It might be 2023 Fieldays but more farmers are closing their wallets for new tractor purchases. May 2023 new tractor registrations were -10% lower than a year ago. And for the second rolling twelve month in a row, fewer tractors were sold, confirming the down trend and ending a 24 month period of expanding demand. You might have thought the bad weather would have seen a spike in demand for the extensive cleanup work required, but the opposite is happening. Maybe the resulting losses are large enough that lenders are wary of being exposed to these rural businesses.
NOT YET
Despite getting a new Governor who was thought to be ready to declare victory over deflation, the Bank of Japan under its new leader today kept its key short-term interest rate unchanged at -0.1% and that of 10-year bond yields at around 0% by a unanimous vote. It said it didn't move because of the high risks it sees in international economies.
SWAPS LITTLE-CHANGED
Wholesale swap rates are likely ending the week little-changed again today. 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 unchanged at 5.68% and +18 bps above the 5.50% OCR. The Australian 10 year bond yield is up +1 bps at 4.01%. The China 10 year bond rate is has recovered +4 bps at 2.71%. And the NZ Government 10 year bond rate is at 4.54%, and down -1 bp, but that is still very much higher than the earlier RBNZ fix which is down another -4 bps to 4.45%. The UST 10 year yield is now at 3.74% and down -7 bps from this time yesterday.
EQUITIES IN STRONG BULL RUN
Wall Street ended today's session strongly with the S&P500 up +1.2% and so far this week it is up a strong +2.9%. Tokyo has opened its Friday session down -0.5% but that still means it is up +2.8% for the week. Hong Kong has opened up +0.5% for a weekly gain so far of +2.5%. Shanghai is up +0.3% in its opening Friday session, heading for a +1.1% weekly rise. The ASX200 is up +0.7% in its afternoon session on the way to a +1.7% weekly gain. The NZX50 hasn't got the bull memo, and is only up +0.3% so far today and it will likely end its week also up only +0.3% with more uninspiring trade.
GOLD GAINS
In early Asian trade, gold is at US$1955/oz and up +US$22 from where we were this time yesterday. Earlier, gold closed in New York at US$1958/oz and in London earlier again at US$1952/oz.
NZD MARGINALLY FIRMER
The Kiwi dollar has risen further today, up more than +½c and now at 62.3 USc. Against the Aussie we are little-changed at 90.7 AUc. Against the euro we are also holding at 57 euro cents. That means the TWI-5 is up to a bit less than 70.
BITCOIN FIRMISH
The bitcoin price has recovered a bit today and is now at US$25,481 and up +1.7% from this time yesterday. Volatility has been modest at +/- 1.9%.
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