What happened Thursday

Economy / news

A review of things you need to know before you sign off on Thursday; business sentiment makes surprise jump, Tiger pinged, Banking Ombudsman pushes banks, swaps and NZD stable

[updated]

29th 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
Resimac raised its floating rates today.

TERM DEPOSIT/SAVINGS RATE CHANGES
Westpac has tweaked its TD rates for terms 4 to 12 months higher.

THE WORST OVER?
ANZ's latest Business Outlook Survey shows a big lift in confidence and overall sentiment, while cost and inflation expectations have dropped. 'Firms appear to be cautiously optimistic that the worst may be over', says ANZ.

AML BREACHES COST ALMOST $1 MLN
Sharebroker Tiger Brokers pinged in FMA court case after transacting $60.8 mln 'without proper checks and controls in place'. It has been fined $900,000 for these anti-money laundering breaches.

DEPOSIT TAKERS BILL PASSES
Parliament has passed the Deposit Takers Bill, meaning savers will have up to $100,000 of their deposits in any eligible institution guaranteed in the event that institution fails. Finance Minister Grant Robertson says the Reserve Bank and Treasury will now consult with banks and other deposit takes on the funding strategy and levy framework for the Depositor Compensation Scheme, which is intended to be up and running by the end of 2024. See more on the incoming deposit insurance regime here.

HERE'S A GOOD MODEL
The Banking Ombudsman gets fast-track fraud resolution undertakings from NZ banks. 'A nerve centre to disrupt scams' is what NZ can learn from Singapore and use here as fraud and deception crimes rise +77% here annually.

34% OF BIDDERS KEEP YIELDS LOW
There were 199 bids for the $400 mln on offer in the three NZ Government Boibd tenders today. They bid a total of $1.358 bln. Despite this heavy demand, yields were essentially unchanged from two weeks ago. That was because only 39 bids won anything, these bidders prepared to take a lower yield for the risk-free benefit of sovereign bonds.

BIG PROFIT JUMP
Stats NZ data for the 2022 financial year shows net profits for all businesses rose to $104 bln and a new record high - and +24% higher than in 2021, which was also a record high. The +$20 bln increase was the largest one year rise ever, and delivered an extra +$5.7 bln to the income tax take.

'BIG IMPROVEMENT'
Returns in 2023 Census indicate a significant improvement on 2018 figures, Statistics Minister Dr Deborah Russell said. As at 29 June, 4,560,486 people had returned their individual forms. That indicates an estimated individual return rate of 89% nationally, a significant increase from 82% in 2018.

FLYING COLOURS?
The 23 largest American banks passed the US Fed’s annual stress test, clearing a key hurdle for returning billions of dollars to investors. According to these results, those banks showed they can withstand a severe global recession and related real estate market turmoil and will be strong enough to come out intact. According to the Fed, "This year's stress test includes a severe global recession with a 40% decline in commercial real estate prices, a substantial increase in office vacancies, and a 38% decline in house prices. The unemployment rate rises by +6.4 percentage points to a peak of 10% and economic output declines commensurately."

FALLING FROM HIGH LEVELS
In Australia, there were 432,000 job vacancies in May, down -9,000 from February, according to new figures from the Australian Bureau of Statistics. While job vacancies have fallen by around -10% over the past year, they were still high – around +90% higher in May 2023 than in February 2020, just before the start of the pandemic. And staying in Australia, Mainfreight says the Aussie freight industry market has peaked and that conditions will worsen in the coming months.

SWAPS LITTLE-CHANGED
Wholesale swap rates are ending today probably marginally firmer. 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 again at 5.69% and still +19 bps above the 5.50% OCR. The Australian 10 year bond yield is up +3 bps from this time yesterday at 3.91%. The China 10 year bond rate is unchanged at 2.71%. And the NZ Government 10 year bond rate is still at 4.61%, and that is still higher than the earlier RBNZ fix which was down -3 bps to 4.51%. The UST 10 year yield is now at 3.73% and back down -4 bps from this time yesterday.

EQUITIES UNINSPIRING
Wall Street was little-changed on the S&P500 having shrugged off earlier pressures. Tokyo has opened its Thursday session up +0.5%. But Hong Kong is down -1.3% in early trade today, and Shanghai has opened down -0.2%. Worries about the Chinese economy are not fading. The ASX200 is unchanged in afternoon trade. The NZX50 is up +0.3% near the end of trade today.

GOLD RETREATS FURTHER
In early Asian trade, gold is at US$1903/oz and down another -US$12 from yesterday. Earlier it closed in New York at US$1907/oz and earlier still it closed in London at US$1908/oz.

NZD LOWER AGAIN
The Kiwi dollar is down another -½c from this time yesterday and now at 60.7 USc. Against the Aussie we are lower at 91.9 AUc. Against the euro we are softer at 55.7 euro cents. That means the TWI-5 is down to 69.4 and a -40 bps reversal.

BITCOIN DIPS
The bitcoin price has fallen today and is now at US$30,117 which is down -1.3% from yesterday. Volatility has stayed modest at just over +/- 1.0%.

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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77 Comments

by Yvil | 29th Jun 23, 8:23pm 1688027018

T Alexander's title of his TView today "FOMO's back"… we shall see by the end of the year...

by JimboJones | 29th Jun 23, 4:08pm 1688011696

Fear Of Misinformed Opinions ?

by Flying high | 30th Jun 23, 6:34am 1688063642

Yvil: 1

Jimbo: 30

Edit

by Retired-Poppy | 29th Jun 23, 4:08pm 1688011738

LOL!

by bw | 29th Jun 23, 4:30pm 1688013058

You'd think Tony would have remembered something. That occasionally, the very unexpected happens, contrary to everything that we see as normal, and whose to say, that's not now?

My father was a home builder in Christchurch.... He unfortunately had to place the business into voluntary liquidation around 1978...Mum naturally got depressed about the situation and sensibly went to the doctor. I asked her what he said. She said he told her to go and read a book. I asked what book? She said the Grapes of Wrath by John Steinbeck. I asked what is that about? She said, go find out for yourself. So, I did. I discovered it was about the experiences of common people during the 1930s Great Depression in the United States and the dustbowl in Oklahoma ...I found stories about the Great Depression to be fascinating and eventually discovered Tony Simpson’s book “The Sugarbag Years” which chronicled the experiences of Kiwis living through the Great Depression.

by sit23 | 29th Jun 23, 4:53pm 1688014399

One would wish that you would actually read what TA actually said . He qoutes what other people say. If they are right or wrong it is probably best not to shoot the messenger. Except that his columns historically have been quite accurate.

by Albert2020 | 29th Jun 23, 5:00pm 1688014825

He surveys real estate agents... do I need to explain the conflict here? Yeah sure, he was only out by 20% in his prediction of a 5% rise in national house prices last year

by Flying high | 29th Jun 23, 10:05pm 1688033159

Its so pathetic when Tony the Comb claims to have 20/20 vision that he could not see what was about to happen to inflation and interest rates in the 3rd quarter of last year.

Never trust this guy! He wants to stir the FOMO (fear and greed) dragon

by NZGecko | 29th Jun 23, 10:20pm 1688034022

You must be deluded??? Or not read any of his complete crap and dross he spruiked out in 2021, 2022 and 2023.

The guys been a walking disaster, as one call after another fell flat on its face. TA is about to be run out of town??

by nktokyo | 29th Jun 23, 10:39pm 1688035175

TA suggested people lock in mortgage rates at 2.85% 6 months before they went up. I did so. Long live TA.

by Zwifter | 30th Jun 23, 4:41am 1688056906

In all fairness, anyone could see that one coming. I told my partner to go 5 years but she only went 3 years. There is a strange psychological thing with long terms, people cannot face them. they take out 1 and 2 year terms as they see that as being the end of their mortgage, light at the end of shorter tunnel.

by Pa1nter | 30th Jun 23, 6:04am 1688061846

I think it's more greed and people assumed they'd get even lower.

When you see a once in a lifetime deal, take it.

by MATM | 29th Jun 23, 4:52pm 1688014353

TA is a shameless joke now.

by JimboJones | 29th Jun 23, 4:55pm 1688014522

I wouldn't rule it out. We are probably at the interest rate peak, so potentially at the house price decline peak.

by Advisor | 29th Jun 23, 5:50pm 1688017802

Also depend on how long interest rates remain at or near peak. House values will have to come down from current levels for new buyers to buy at higher for longer mortgage rates.

by NZGecko | 29th Jun 23, 10:23pm 1688034216

Not when these painfully high rates stays high till well into 2025 and the OCR hits 6% during the November 2023 TO MID 2024 period.

INFLATION IS OUT OF CONTROL IN NZ!

by Zwifter | 30th Jun 23, 4:36am 1688056561

I think you are half right. The OCR will stay the same BUT the banks will likely move up anyway. The petrol tax going back on tomorrow is going to be a killer for starters.

by Flying high | 29th Jun 23, 8:28pm 1688027331

Your predicting a fall in the calendar year of 20percent. And so am I.

Tony is outnumbered 😁

by morepork | 29th Jun 23, 4:07pm 1688011665

The first official release of census data will be in May 2024

Looks like government departments are as efficient as usual

by Advisor | 29th Jun 23, 4:09pm 1688011770

In the last 18 months, INZ has issued over 100k permanent visas to migrants under the 2021 Residence Visa scheme.

This should've had an impact on house prices more than temporary migrants flocking into NZ, but it did not.

Migration surge behind looming housing market pick up: ANZ | Stuff.co.nz

by JimboJones | 29th Jun 23, 4:14pm 1688012050

Haven't we already proved over and over that house prises are almost 100% driven by interest rates (in a constrained supply market)?

by HouseMouse | 29th Jun 23, 4:23pm 1688012589

What’s a ‘constrained supply market’? Are you talking about the supply and labour constraints during the covid lockdowns.

by JimboJones | 29th Jun 23, 4:43pm 1688013804

Nah I mean a housing market that isn't Houston or Detroit. When supply is less than demand, people will pay as much as they can afford, and that is dictated by interest rates.

by Roelof | 29th Jun 23, 4:57pm 1688014638

I'd suggest demand is a function of population growth/decline ....

and "bidding power" is a function of interest rates and easy credit.

That's how I see it

by Slapheid | 29th Jun 23, 8:40pm 1688028035

I'd suggest demand is a function of population growth/decline

That is true to an extent, but stops being strictly the case when people start owning/leveraging multiple properties for capital gain.

by malamah | 29th Jun 23, 4:23pm 1688012580

Overall, the ANZ economists expected a brief market flurry, which would drive a 3% lift in house prices in the second half of the year, before things petered out again.

So they're expecting a dead cat?

by HouseMouse | 29th Jun 23, 4:26pm 1688012768

So a similar view to TA.

I reiterate a point I have previously made - the so called migration effect is being completely overplayed.

I guess time will tell, let’s see in 5-6 months.

by MATM | 29th Jun 23, 5:21pm 1688016060

In fact, the immigration for this calendar year is negative, is that cheating or misleading the "economist" still quote the out of date data?

by malamah | 29th Jun 23, 5:23pm 1688016229

They rely on the assumed net migration figure from stats nz, which is an assumption based on immigrants who intend on staying, and emigrants who left at least 12 months ago. Have you left NZ recently? Nobody asks you if you'll ever come back.

by HouseMouse | 29th Jun 23, 5:26pm 1688016367

Yes.

And even *IF* net migration numbers were high, all these economists seem to be missing the point that a large proportion of these low-mid income migrants won’t be able to buy.

by HouseMouse | 29th Jun 23, 6:00pm 1688018455

Also worth noting that ANZ’s forecast of a 3% rise is based in the HPI, not median values.

I think there’s a chance the median could rise 3-5% by the end if this year, but not the HPI.

The slump in shoebox townhouse sales will changes sales composition quite significantly, putting upwards pressure on the median value. At least in Auckland.

by Pa1nter | 29th Jun 23, 9:10pm 1688029807

And even *IF* net migration numbers were high, all these economists seem to be missing the point that a large proportion of these low-mid income migrants won’t be able to buy.

People seem to expect figure to act instantly all at once.

If you taken in 100,000 migrants, how many will buy instantly? If they're from somewhere like South Africa or even more Third World like the UK, they possibly won't have the ability to buy immediately. It'll take years.

by HouseMouse | 29th Jun 23, 9:27pm 1688030865

Exactly.

Also need to develop a credit record.

by Retired-Poppy | 29th Jun 23, 4:30pm 1688013049

"So they're expecting a dead cat?" - It would be naive to expect this ride wouldn't involve one or two small suckers rally's.

by malamah | 29th Jun 23, 4:31pm 1688013115

I think they're covering their asses so they can call the bottom, spur a rally and then point back to "petered out".

Maybe they're wrong and it will be nothing but up from here. I can't see it - but then again I don't rely on suckers rallys to pay my shareholders so what would I know.

by sit23 | 29th Jun 23, 4:58pm 1688014703

It is spelt arses.

by Foxglove. | 29th Jun 23, 5:21pm 1688016069

There was a young lady from Madras, who had a most magnificent ass, not pretty and pink as you probably think, no it was grey had long ears and ate grass. You see, such confusion is not uncommon.

by Flying high | 29th Jun 23, 8:50pm 1688028614

The problem is that 'grass' rhymes better with arse than with ass

by DMC45 | 30th Jun 23, 2:38am 1688049480

it is also spelled "asses."

by Jonny.Foe | 29th Jun 23, 4:19pm 1688012382

Company profits are now only marginally lower than *total* wages and salaries.

Just think about that for a minute... It means that the average worker earns about the same per hour for their employer (and shareholders) as they earn for themselves.

Wage slaves are the peasants of the modern world.

by Eschaton | 29th Jun 23, 4:28pm 1688012901

Is their living standard better?

by Jonny.Foe | 29th Jun 23, 4:49pm 1688014181

Better than they would be in the 15th century or better than they would be if workers kept more of the fruits of their labour?

by Juzz | 29th Jun 23, 4:35pm 1688013356

Companies don't just sell labor into the market, otherwise, GST would just be ST. They put a markup on the goods part too. A component of that is they may through turnover get better discounts from suppliers than the single employee would get say they were self-employed.

by rastus1 | 29th Jun 23, 4:32pm 1688013136

Wow... can gold go any lower?

by Whatwillhappen | 29th Jun 23, 4:43pm 1688013805

#st0re0fvalu3

by Yvil | 29th Jun 23, 4:54pm 1688014495

I've started buying gold since it dropped under USD 1,950, I'm not winning so far, but I don't expect to sell it for at least 12-18 months

by Yvil | 29th Jun 23, 5:09pm 1688015377

Can anyone tell me why the spread between buy and sell of physical Gold is so high (about 7%) and if there are ways to reduce it ? (apart from buying shares). Thanks.

by RossoCorsa | 29th Jun 23, 6:16pm 1688019416

That seems odd.. Here in Aussie I'm paying around 2% premium (1oz physical hold in your hand) on entry and sell @ spot. Obviously pay more for fractionals.

by J.C. | 29th Jun 23, 5:20pm 1688016058

Wow... can gold go any lower?

Yep. Much lower. Word being bandied around on ConspiracyTheory dot com is that Bitcoin has usurped gold.

Might be a good idea to have exposure to both.

by RossoCorsa | 29th Jun 23, 6:18pm 1688019534

Let me know when CBs start hoovering crypto!

Central banks | Gold Demand Trends Q1 2023 | World Gold Council

by KH | 29th Jun 23, 8:32pm 1688027530

Yes. We have seen you bandering it about JC. Far far too often.

by Audaxes | 29th Jun 23, 5:40pm 1688017211

Gold has an inverse price relationship with the level of US Treasury real yields.

by Audaxes | 29th Jun 23, 4:43pm 1688013826

First FLP RP agreement expired on 28/06/23 - amount $200m.

by Yvil | 29th Jun 23, 4:56pm 1688014595

So, are we at the beginning of QT in NZ ?

by Audaxes | 29th Jun 23, 5:50pm 1688017841

Whoa - FLP was a repurchase agreement between the RBNZ and qualifying banks financing ~$19.021 billion of RMBS at RP rates not much different from the market rate.

by Yvil | 29th Jun 23, 5:02pm 1688014979

Stats NZ data for the 2022 financial year shows net profits for all businesses rose to $104 bln and a new record high - and +24% higher than in 2021

A 24% pa increase in NET PROFITS across all businesses is HUGE !!! Maybe that's why the pain of higher interest rates is not hitting yet.

by HSL | 29th Jun 23, 5:29pm 1688016585

I would suggest tax minimisation I.e. company rate vs personal marginal rates.

by Jonny.Foe | 29th Jun 23, 6:35pm 1688020541

High profits + high cost of money (interest rates) = higher prices. We are prolonging inflation in NZ through aggressive monetary policy and lax regulation of companies with market power. Other countries with much lower rates and more sophisticated approaches to price management are showing us the way. Denmark is back below 3%!!!

by agnostium | 29th Jun 23, 7:01pm 1688022065

I thought Labour were bad for business?

by LASSET | 29th Jun 23, 9:54pm 1688032475

I've never understood the 'business communities' support for National, given historically they perform better under Labour governments. The same for farmers.

Disclaimer: I'm part of said community.

by Nzdan | 30th Jun 23, 7:25am 1688066747

I think it has something to do with gravitating their association to the similarly minded political party and keeping up appearances. If people found out they supported Labour they'd be labelled dead beat supporting losers.

by Nzdan | 30th Jun 23, 7:03am 1688065424

People alternate when it suits. If profits were down they'd be bad for business, but profits are up they're bad for consumers.

by Independent_Observer | 29th Jun 23, 5:08pm 1688015320

US yield curve inversion continues to deepen. 2/10 is now 100bps. Inversion far more severe than leading into any recession since the early 1980's.

https://fred.stlouisfed.org/series/T10Y2Y

by Audaxes | 29th Jun 23, 5:49pm 1688017778

US imports were sharply lower again. After a short-lived rebound back in January (remember soft landing?), imports have fallen sharply again. They dropped almost 3% in May alone, split btw industrial supplies and consumer goods. This is one reason why CNY is plunging. Link

Global trade recession hitting US exports, too. Total values in May were the lowest since Feb '22. Volumes are obviously much worse and it isn't helping struggling manufacturers as worldwide demand continues to weaken. Link

by Audaxes | 29th Jun 23, 5:57pm 1688018265

German rates stopped rising late October. ECB says this is "accommodative" contrary to its rate hikes. Yet, lending esp. to households in Europe has been the opposite of accommodative since...right after late October. https://buff.ly/3Nyw6kk Link

by cjmain | 29th Jun 23, 5:16pm 1688015780

profits for all businesses rose to $104 bln and a new record high - and +24% higher than in 2021, which was also a record high

but yet we are told it is wages that are driving inflation not profits. pah!

by HouseMouse | 29th Jun 23, 5:20pm 1688016059

https://www.macrobusiness.com.au/2023/06/the-evidence-is-clear-company-…

by JimboJones | 29th Jun 23, 6:59pm 1688021965

Yet every business survey since labour were elected has been negative hasn’t it?

by Nzdan | 30th Jun 23, 7:20am 1688066443

I'll throw a dart in the dark and suggest maybe the crop of businesses conducting these surveys are true blue blooded National supporters?

by Grattaway | 29th Jun 23, 7:46pm 1688024802

so tax take up this year - books balanced, poverty driven out and everything is sweet leading into the election

Whats missing?

by IT GUY | 29th Jun 23, 5:19pm 1688015946

Even Mike Hoskings has trouble reading the Spruikers adverts , that the bottom is in...

by Yvil | 29th Jun 23, 5:45pm 1688017510

So, you like listening to Mike Hoskins IT GUY !

by IT GUY | 29th Jun 23, 5:56pm 1688018176

It was an obvious placement add from the Herald re the comb,.....

by Yvil | 29th Jun 23, 8:23pm 1688026981

So, you like reading the Herald, IT GUY !

by Albert2020 | 29th Jun 23, 5:59pm 1688018387

Yeah Granny Herald and SkyNews are his source of information.

by J.C. | 29th Jun 23, 5:54pm 1688018094

The Berejiklian report is tame compared to what's been going on in the NSW govt.

Warning: The following news link is disturbing but 100% fact based. Serkan is one of the better journos at getting amongst the muck in Australasia.

EXCLUSIVE: The state of NSW has experienced another major political implosion over the past few days. With its premier, Gladys Berejiklian, as well as deputy premier, John Barilaro, and high-profile minister, Andrew Constance, calling it quits before they were pushed over their close connection to separate corruption scandals involving dodgy questionable personal relationships and sly backroom deals, including on behalf of alleged child rapists and murderers, that have been raging on for years. Serkan Ozturk with all the wild details.

https://truecrimenewsweekly.com/berejiklians-burden-to-get-bigger-way-b…

by Yvil | 29th Jun 23, 8:24pm 1688027050

Who gave me a thumbs up ? I was on a perfect "0"