What happened Monday

Business / news

A review of things you need to know before you sign off on Monday; affordability for existing homeowners still good, power supply on edge, ProdCom sidelines itself, swaps soft, NZD firm, & more

26th Jun 23, 3:59pm by David Chaston

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
HSBC raised its floating rate from today (as announced earlier). Bank of China raised most fixed rates by +10 bps and +20 bps for their 1 year rate.

TERM DEPOSIT/SAVINGS RATE CHANGES
None so far.

TRADING UP STILL AFFORDABLE
What are the prospects like for existing homeowners wanting to upgrade? Moving up the property ladder is still affordable for most existing home owners according to the May edition of our home loan affordability report.

CLOSE TO THE EDGE
So far in 2023 electricity supply has run uncomfortably close to the safety margin almost as often as it did for the whole of last year, which is putting the electricity industry on edge.

ACTING CORPORATE BANKING HEAD FOR ASB
ASB says Gregory Trotter will be its acting Executive General Manager of Corporate Banking from June 30 until a permanent appointment is made. Trotter is currently ASB's General Manager for Global Transactional Banking. ASB announced in April that Nigel Annett, its current Executive General Manager of Corporate Banking, had resigned and would leave on June 30.

BELTWAY CLUB
The Productivity Commission added a fourth Commissioner today. Vicky Robertson will commence a 3-year term in July 2023, joining Chair Dr Ganesh Nana and fellow Commissioners Dr Bill Rosenberg and Dr Diane Ruwhiu. Robertson only has public service credentials. There are currently no Commissioners with any deep commercial credentials.

WIDESPREAD OUTAGE
In Australia, CBA has 15 mln customers, its largest bank by some margin. 7.7 mln of those use its mobile app. Today they suffered a severe service outage that affected the app and debit cards. It is having a widespread impact on commercial transactions across their economy, especially for SMEs.

SWAPS SLIP SLIGHTLY
Wholesale swap rates are again ending today a little softer. 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 5.69% and +19 bps above the 5.50% OCR. The Australian 10 year bond yield is up +2 bps from this morning at 3.96%. The China 10 year bond rate is little-changed at 2.71%. And the NZ Government 10 year bond rate is at 4.54% and down -6 bps, and that is still higher than the earlier RBNZ fix which was down -7 bps to 4.48%. The UST 10 year yield is now at 3.73% and down -1 bp from this morning.

EQUITY START THE WEEK CONFUSED
The NZX50 has started the week on a downer, down -0.8% in late trade. The ASX200 is down -0.4% in afternoon trade. Tokyo has opened its week little-changed but on the upside. Hong Kong is down -0.3% in its early trade. But Shanghai is down sharply at its Monday open, down -1.2% as it returns from holiday. The S&P500 might upen up +0.2% if the S&P500 futures are signaling correctly.

GOLD LOWER AGAIN
In early Asian trade, gold is at US$1925/oz and up +US$5 from morning.

NZD FIRMER
The Kiwi dollar is up +¼c from this morning and now at 61.7 USc. Against the Aussie we are up +¼c as well at 92.3 AUc. Against the euro we are firm at 56.4 euro cents. That means the TWI-5 is up +20 bps at 70.

BITCOIN SLIGHTLY LOWER
The bitcoin price has fallen back slightly today and is now at US$30,201 which is down -1.1% from where we opened this morning. Volatility has been modest at +/- 1.7%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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59 Comments

by Hamish | 26th Jun 23, 4:31pm 1687753913

Government crosses another couple of digits in the form of foodbank funding announcement and hopes inflation starts to fall away soon.

by bw | 26th Jun 23, 4:37pm 1687754267

And another couple of digits to ensure the slopes get used this season. That's if it snows, of course....

by Baywatch | 26th Jun 23, 4:40pm 1687754420

All those Landcruiser's and Subaru's need to get there yearly "off road" work in.

by bw | 26th Jun 23, 4:48pm 1687754938

The optics of this announcement are not good. For good or bad, it's gone broke. Why are we shovelling good money after bad, when at best, it could have gone to the food bank people? Because so many livelihoods depend on it? They are going anyway, by the looks of it, and if 'things' get bad, keeping them on life-support is probably not in the best of ideas.

by blobbles | 26th Jun 23, 5:03pm 1687755830

Yes, classic stupid move from the government. Maybe they should just give NIWA a call and ask why there isn't enough snow there anymore. Idiotic move, unless there's a bigger plan to turn them into more dry weather business cases. For instance a MTB park during the summer is always a good idea and works everywhere else around the world its done. Maybe a bit more difficult in volcanic rock?

by nktokyo | 26th Jun 23, 7:11pm 1687763484

It's been proposed many times and you could put some great biking stuff up there... the issue is Iwi need to support it (ie. get paid) and it's on DOC land. So you have a lot of people whose jobs don't depend on turning a profit who would need to approve of it.

by El Torso | 27th Jun 23, 7:22am 1687807335

I am not sure you have read the detail. It is a $5m dollar underwrite at a period when the Mountain is typically cashflow positive. $100m of local economy relies on the Mountain, so it seems a pretty good move while they look for a buyer to me.

by JohnfromtheTron | 26th Jun 23, 5:09pm 1687756174

RBNZ - We need to engineer a recession, people need to stop spending and unemployment needs to rise.

Labour Government (Ruapehu bale out) - "The season going ahead will save hundreds of jobs and support local tourism, the regional economy...

by nguturoa | 26th Jun 23, 7:27pm 1687764474

RAL does the mismanagement and tax payers have to pay to fix it. Wow.

My taxes used to pay for others mistakes.

Where is the accountability?

by ChrisOfNoFame | 26th Jun 23, 4:42pm 1687754559

And meanwhile ... Onewoof continues to push the narrative that because rental listings are down then they must be in short supply ....

.... Or maybe they are not in short supply at all and maybe renters are just staying put because renting is currently way cheaper than owning and/or buying.

discl: trying to rent out a relative's two-bed unit on Auckland's North Shore that's within a 5 minute walk of the town center that usually goes on the day it is listed. But this time it's still there after a week and a half.

by KH | 26th Jun 23, 5:14pm 1687756461

Overpriced perhaps ?

by malamah | 26th Jun 23, 5:38pm 1687757925

Recently tracked a property sold, rental appraisal was $1100pw, listed for just shy of $800pw on TM, a month later it was $650pw. No longer listed, either delisted or tenanted.

by Nifty1 | 26th Jun 23, 6:40pm 1687761632

Is it funny saying OneWoof?

discl: trying to rent out a relative's two-bed unit on Auckland's North Shore that's within a 5 minute walk of the town center that usually goes on the day it is listed. But this time it's still there after a week and a half.

Lol still there after a week and a half...wow thats terrible. Getting interest I bet though or not going to mention that?

by KH | 26th Jun 23, 7:03pm 1687763036

Odd comment from you Nifty. Maiamah provided some info. Only one example true, and may be an outlier, but a direct experience. But you are convinced it's the other way round.

by Nifty1 | 26th Jun 23, 7:11pm 1687763491

It's not odd at all... just questioning some of the info or lack of info given that's being used to prove some kind of point.

by malamah | 26th Jun 23, 8:01pm 1687766505

I think you meant to reply to the main comment, but I’ll take the hit sure, anecdotal. Just two random stories on the internet which are interesting in their own right. No need to rest your trigger on the comment button.

by Rob Reid | 26th Jun 23, 11:34pm 1687779295

Another anecdote: I have been looking for a 3-4 bedder on North Shore for about a month. Plenty coming up but plenty also looking and have had a number of applications rejected. Had some more luck tonight - preferred candidate - cross your fingers for me - I was priced out of buying long ago so scoring a rental is as good as it gets for me.

by ChrisOfNoFame | 27th Jun 23, 9:47am 1687816026

You probably won't read this but just in case ...

Yes. Getting some interest. (I've just picked it up as my wife's been dealing with it and she is now on holiday.) Feedback is that some tire-kickers are looking for 'new' or 'modern' as they've seen 'new builds' for a 'bit more'. Also want all appliances provided (owner doesn't want to do this, a mistake IMHO).. Recently reno'ed. Rent has gone up by by 3.2% per annum from last rent amount. Given its 'walk-anywhere' location - including to the beach - my view is that they're under-renting and my TradeMe watchlist confirms.

Anyway - my point was a drop in rental listing doesn't necessarily mean what Onewoof's economist suggests (concludes?) it means. People tend to stay put and take less risk in troubled financial times - this is a defining characteristic of a Recession - and can in fact make them longer and deeper.

by Squishy | 26th Jun 23, 4:49pm 1687754995

The Productivity Commission...

It's slightly amusing to me that, because governments ignore their recommendations, they are actually not very productive.

by Advisor | 26th Jun 23, 5:01pm 1687755662

Any advice that forces the government of the day to rethink its neoliberal stance and fix macroeconomic issues with targeted reforms is not welcome.

The recommendations from the PC on NZ's immigration settings made a lot of sense. In fact, the report even blatantly implies our loose migration settings is a quick fix for policy failures across education & training, narrow tax base, etc.

by Grattaway | 26th Jun 23, 5:01pm 1687755717

Power system on edge - Are the lights going to go off when the next cold front arrives?

That will confirm our third world status

Or can we just blame that on colonisation as well

by KH | 26th Jun 23, 5:16pm 1687756613

"....Power system on edge - Are the lights going to go off when the next cold front arrives?....."

If we all had a grid tied solar system it would be no problem. Easier on the grid as well.

by blobbles | 26th Jun 23, 6:18pm 1687760309

Huh?? If we all had grid tied solar we would have exactly the same problem! Especially at this time of year when most of the country is completely dark at 6pm, the solar panels aren't doing anything then but catching dew.

The problem is the time of max power usage, 6pm. We need to be producing as much electricity as possible during the busiest period and power companies aren't exactly incentivised to build more power as when the supply is short, their prices are high. So they like to keep this "almost running out of power" situation the same so they can maximise profits. Let's not be naive, they would absolutely love rolling power cuts due to low supply as prices would be off the charts, they would be printing money for shareholders. Same reason OPEC is slashing output, trying to keep energy prices as high as possible.

by KH | 26th Jun 23, 6:52pm 1687762347

Heard of the house battery Blobbles ? And all they need to do is provide a bit between 6 and 9.

Few hundred thou of those will break the back of the problem. And those panels will be producing in the daytime when demand is high (if not peak)

by Officebound | 26th Jun 23, 8:07pm 1687766849

You know how much solar sucks whe its cloudy right? On the cloudiest days in winter, our 4kw system ($12k worth) produces ~5kw. Every piece of that and more is used through the day.

by blobbles | 26th Jun 23, 9:26pm 1687771607

You didn't say anything about a battery in your original comment which would have changed what I said. Read below.

by Advisor | 26th Jun 23, 6:25pm 1687760739

Solar PV systems are not a standalone solution, especially during cold mornings where solar irrandiance is low.

200k or so households with battery systems installed behind the meter or EVs with V2L charging ability should help reduce some of the excess load during peak winter mornings.

by blobbles | 26th Jun 23, 6:32pm 1687761135

Yes, this is the way. Only a battery backed solar system would work to spread the load, but then it might be better to back it with centralised batteries for better scale and safety etc. I see there is already some batteries being built now by energy companies in NZ to make money off supply price arbitrage.

by JimboJones | 26th Jun 23, 6:44pm 1687761867

Or just do what we do and leave the heat pump on all night, that way it does bugger all at peak. The right pricing would easily fix the problem as it always does.

by gnx | 26th Jun 23, 5:01pm 1687755717

weather doesn't look good out over the gulf.....coromandel to get hit again??

by Cur8or | 26th Jun 23, 5:04pm 1687755866

Moving up the property ladder will soon be even more affordable.

by J.C. | 26th Jun 23, 5:13pm 1687756425

Janine Grainger, CEO of Easy Crypto recognised as High Tech Inspiring Individual at the IBM High Tech Awards. Few mutterings about Sam Bankman-Fried, Ponzis, and scams around the water cooler when I bought this up.

https://www.hitech.org.nz/awards/winners/year/2023

by HouseMouse | 26th Jun 23, 5:37pm 1687757828

NZX50, wow. Really weak.

Now only up 0.44% YTD.

ASX200 not that much better.

by J.C. | 26th Jun 23, 5:52pm 1687758779

FNZ is really the only proxy the hoi polloi can get to NZX50.

Past 4 years - Flat. Not incl the 2% divi.

Past 5 years - +15%

From inception in 2005 +107%.

Nothing to write home about.

by Nifty1 | 26th Jun 23, 6:35pm 1687761320

You know it's easy to invest outside of NZX50 aye HM...

by HouseMouse | 26th Jun 23, 6:44pm 1687761895

Yep

Buy it’s an indicator of the general state of the market - which is weak

by J.C. | 26th Jun 23, 6:49pm 1687762148

Buy it’s an indicator of the general state of the market - which is weak

NZX50 was one of the better performing indexes in the world in the 10 years up to Covid.

by HouseMouse | 26th Jun 23, 6:52pm 1687762377

Yes I know that. As I have said many times before I sold a number of high performing stocks just before the covid slump, which I had held for 6 or 7 years and did very well off.

by Nifty1 | 26th Jun 23, 6:56pm 1687762608

That's the key isn't it, long term investing...

by IT GUY | 26th Jun 23, 7:05pm 1687763142

buy distressed assets

Business collapses have hit the highest monthly level in more than seven years, as failures spread beyond property construction to retail, healthcare, childcare and mining.

Higher interest rates, weaker consumer spending and directors throwing in the keys after a temporary pandemic reprieve are the main reasons for the jump in insolvencies.

Baker McKenzie partner Maria O’Brien says insolvencies are hitting some unexpected sectors. Oscar Colman

Insolvency and restructuring appointments hit 868 last month, the highest monthly result since November 2015, according to analysis of Australian Securities and Investments Commission data.

While some of the spike is attributed to a “catch-up” of struggling businesses that delayed folding during the pandemic, insolvency practitioners say momentum is building after a quiet few years.

by J.C. | 26th Jun 23, 7:09pm 1687763389

That's the key isn't it, long term investing...

Depends. As I illustrated above, FNZ would not have beaten inflation over 18 years.

by IT GUY | 26th Jun 23, 6:04pm 1687759493

Can anyone else sense the desperation in the Spruikers on this site..... its a long cold wet winter......

by HouseMouse | 26th Jun 23, 6:17pm 1687760269

The Comb reckons prices are going up 3-5% this year, and 10% next year 😂

by IT GUY | 26th Jun 23, 6:40pm 1687761631

The comb is a clown who has no record of price forecasting.....

by HouseMouse | 26th Jun 23, 6:50pm 1687762257

I reckon this latest one is another shocker

by Nifty1 | 26th Jun 23, 6:37pm 1687761461

The anti spruikers seemed to worried this could be the end of price falls...

by IT GUY | 26th Jun 23, 6:41pm 1687761671

HW2 you are so shallow

by Nifty1 | 26th Jun 23, 6:49pm 1687762167

You're obsessed with HW2 as much as TA... this winter, let it go like Frozen.

by IT GUY | 26th Jun 23, 6:51pm 1687762311

he was a racist clown, its a clown show of spruikers

by Flying high | 26th Jun 23, 10:22pm 1687774972

As part maori I'm glad the white supremists are banned

by kiwikidsnz | 26th Jun 23, 10:54pm 1687776883

How does your other part feel about the Maori supremacists ?

by Flying high | 27th Jun 23, 3:38am 1687793922

Are there any on here

by J.C. | 26th Jun 23, 6:23pm 1687760635

¾ of Aussie small business owners taking home less than the average wage according to the Aussie Small Business and Family Enterprise Ombudsman. According to the ABS, 97% of Aussie businesses have less then 17 employees.

https://twitter.com/solo_dio_/status/1673126788556546050

by J.C. | 26th Jun 23, 6:32pm 1687761161

Quelle surprise.

BlackRock CEO Larry Fink said he's no longer using the term "ESG" (environment, social and governance) because it is being politically "weaponized" and he's "ashamed" to be part of the debate on the issue.

"I never said I was ashamed," he said, incorrectly. "I'm not ashamed. I do believe in conscientious capitalism."
"I'm not going to use the word ESG because it's been misused by the far left and the far right," he added.

https://www.axios.com/2023/06/26/larry-fink-ashamed-esg-weaponized-desa…

by HouseMouse | 26th Jun 23, 7:34pm 1687764884

Hamilton By the Sea - worse traffic than Auckland:

https://i.stuff.co.nz/bay-of-plenty/300909599/worst-city-in-new-zealand…

by HouseMouse | 26th Jun 23, 8:23pm 1687767816

Good that we have MacroBusiness across the ditch to call nonsense on things. Leith nailing the nonsense that is The Economist’s’Most Liveable City’:

https://www.macrobusiness.com.au/2023/06/brisbane-is-the-real-most-live…

by Palmtree08 | 26th Jun 23, 9:01pm 1687770115

Electricity demand close to safety margin? Good thing our political overlords and the team of unaccountable lobbyists that set policy aren't stupid enough to create more unnecessary demand then. The surge in immigration must be from people not needing anywhere to live, food to eat, or any other products or services? Obviously not needing a place to live, no energy will be needed for heating either?

https://www.interest.co.nz/economy/122698/asb-economists-say-current-in…

by IT GUY | 26th Jun 23, 9:36pm 1687772165

for this situation I have firewood and a 6kw genset

by Palmtree08 | 27th Jun 23, 11:34am 1687822484

Ultimately, when there are particulate rules applied to the whole country, to "protect" our growing 100 000 000 population, you will be relegated to using your heat pump, like everyone else. Although only on days when intermittent elec supply allows, i.e above 10degC. Growth means freeedooommmm......