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 to report again today. No other bank has followed ASB up yet.
TERM DEPOSIT/SAVINGS RATE CHANGES
NBS raised its 6, 9, and 12 month TD rates today.
LOW & FLAT IN JUNE
Dominant Auckland realtor Barfoot & Thompson reported flat sales volumes, and prices that edged up in June. They said the current housing market cycle 'probably one of the hardest Aucklanders have been through in recent years'.
DROPPING LIKE STONES
Meanwhile CoreLogic reported that nationally, average house values were down -11% year-on-year in June, and in Auckland that fell almost -$40,000 in the month.
LOWER DAIRY PRICES
Dairy prices fell -3.3% in the overnight auction from the prior one two weeks ago, taking the year-on-year fall to -26%. It seems rising milk production worldwide (and that includes in New Zealand) is easing buyer concerns that future prices might be higher. Volumes sold came in under the "minimums" offered
LOWER COMMODITY PRICES
Lower dairy prices will add to a sinking feeling across many of our rural exports. The ANZ World Commodity Price Index fell -2.3% in June from May to be almost -15% lower in a year. Beef and lamb prices fell sharply in June, and forestry prices also retreated, while apple prices improved.
SUCCESSFUL MISSION
The recent top-level trade visit to China looks like it has helped our trade with the Middle Kingdom, shoring it up and distinguishing us from our Western allies. I recommend this independent review of the mission. (Interest.co.nz received no support or subsidy for our coverage, other than being on the PMs airplane.)
DEEPER DEFICIT
Weakening corporate profits are now flowing through to lower tax revenue for the Government, adding $2 billion to the deficit and taking it to -$6.5 bln in the eleven months to May.
VALIDUS STOPPED
The Financial Markets Authority has made a permanent stop order applying to Validus International LLC, a Singaporean company. The Order prohibits Validus and Validus-FZCO and associated persons from taking steps that will result in repeat unlawful behaviour that may cause material financial harm. The stop order was actually issued in February but was not made public because Validus appealed it in the NZ courts. That challenge failed today.
NEW GOVT BANKING CONTRACTS UNVEILED
The Ministry of Business, Innovation and Employment (MBIE) says Westpac New Zealand will continue providing the Government's core Crown transactional banking services for another four years, until the end of June 2027. MBIE also confirmed ANZ NZ and Citibank as government bank service providers for the next four years, and says it expects to conclude contract negotiations over a banking services agreement with ASB soon. Other services the banks will provide include foreign exchange services, payment services and card services.
SWAPS RISE
Wholesale swap rates are probably up today again. 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 down another -1 bp to 5.68% and now +18 bps above the 5.50% OCR. The Australian 10 year bond yield is down -2 bps from this time yesterday at 4.00% after the RBA decision. The China 10 year bond rate is unchanged at 2.70%. And the NZ Government 10 year bond rate is now up +7 bps at 4.72%, and still higher than the earlier RBNZ fix which also rose +7 bps to 4.67%. The UST 10 year yield is now at 3.85% and unchanged from this time yesterday.
EQUITIES LOWER
Wall Street was closed today for a public holiday. Tokyo has opened its Wednesday trade down another -0.4%. Hong Kong is down a sharpish -1.1% in early trade, and Shanghai is down -0.4%. The ASX200 is down -0.3% in early afternoon trade. The NZX50 is down -0.1% in late trade.
GOLD LITTLE-CHANGED
In early Asian trade, gold is little-changed at US$1923/oz and up +US$1 from yesterday. There has been no trading in New York and earlier in London it closed at US$1928/oz.
NZD FIRMER
The Kiwi dollar is up +½c from yesterday, now at 62 USc. Against the Aussie we are also up +½c at 92.7 AUc. Against the euro we are +½c firmer at 57 euro cents. That means the TWI-5 is also up about +50 bps, now at 70.5 and a two month high.
BITCOIN SLIPS
The bitcoin price has slipped marginally today and is now at US$30,859 US$31,257 which is down -1.3% from where we were this time yesterday. Volatility has remained modest at just on +/- 1.0%.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
53 Comments
Launch of 14 April 2033 Nominal Bond Syndicated Tap Announced
The Treasury announces the syndicated tap of the 3.50% coupon 14 April 2033 nominal bond. Given the timing of the launch, the Treasury also announces the cancellation of the tender scheduled for 6 July 2023.
The Treasury expects to issue at least NZ$3.0 billion of the 14 April 2033 nominal bond and the transaction will be capped at NZ$5.0 billion. Initial price guidance is 4 to 7 basis points over the 15 May 2032 nominal bond.
The issue will be priced on Thursday 6 July 2023 NZT, and further issuance of the bond will not occur prior to October 2023.
ANZ Bank New Zealand Limited; Commonwealth Bank of Australia; UBS AG, Australia Branch; and Westpac Banking Corporation, New Zealand are Joint-Lead Managers for the issue.
Japan's market is a perfect example of depression economics, or how low rates are NOT stimulus. They are and have always been about tight money/deflation. That's why rates/mkts keep rejecting rate hikes & "inflation" CBs claim to fear. https://buff.ly/46fOvL3 Link
Umm . . . HouseMouse
You still thinking this or was it just another of your wild baseless guesses:
by HouseMouse | 20th Jan 23, 5:39pm
Sub 70 yen to the NZD by year’s end me thinks
At least you are consistent (as in wrong).
Cheers :)
HouseMouse
Don’t get triggered and irrational.
At the time I noted you were calling 70 yen to dollar whereas the weekly bank reports I read were indicating 85.
You are continually slagging-off teams of bank economists, RBNZ, Treasury and most economists as fools and inept, and put yourself as the all knowing and what are really unsubstantiated guesses.
So, it’s quite simple; it’s simply about accountability of you and your ego . . . and despite your often stated comment that you get things right, you don’t.
You are continually slagging-off teams of bank economists, RBNZ, Treasury and most economists as fools and inept, and put yourself as the all knowing and what are really unsubstantiated guesses.
I don't think it's wrong to suggest that experts related to Forex make 'unsubstantiated guesses' as much of their work is based on assumptions. You know as well as me that if their foresight were infallible, they wouldn't even need to hedge their bets. And remember that JPY is a strange beast for most people to understand.
Who is to say it won’t be circa 70 by year’s end?
You had a go at me for being bearish on shares in early 2023. Actually, I have been right - NZX50 and NZX200 both mediocre performers in first half of the year. Lol
And your love for bank economists is suspicious. I reckon you were a regional bank manager for ANZ or something.
No other bank has followed ASB up yet. Depends on 20% deposit or not. In the 'standard' over 80% LVR, ASB is lower in many terms than ANZ, KB, and WPC. ANZ had moved in advance a few weeks back. KBs 'standard' rates are the highest?, looks like they arent keen on low deposit loans right now.
I want to say it is driven by a well-intentioned plan to introduce more competition into the NZ banking landscape.
Why is a gradually shift over multiple years to Kiwibank never the solution? Even MBIE bureaucrats don't think retaining some of the basic bank fees in NZ is a good idea.
Commsec reports Aussie luxury vehicle sales hit record highs in June 2023.
New vehicle sales for June 2023 is the biggest number of monthly sales since June 2018. Sales increased by 25% on a year ago and 8.2% in the first half of 2023.
Party on.
https://twitter.com/CommSec/status/1676426978172481536
The recent top-level trade visit to China looks like it has helped our trade with the Middle Kingdom, shoring it up and distinguishing us from our Western allies. Indeed:
Beijing cancels visit by EU's Borrell next week. No explanation given. This follows European Council conclusions on China (below) - EU harmonising with US on Indo-Pacific, dashing Beijing’s hopes of Europeans maintaining independent foreign policy. https://consilium.europa.eu/en/press/press-releases/2023/06/30/european-council-conclusions-on-china-30-june-2023/? Link
The current extension has always been scheduled to end in April 2024. Today's "news" is just that it still is?
EVs in NZ still only about 2% of fleet. Personally I predict that they will kick the can and extend it again, but equally running both the EV and PHEV will still be cheap even when RUCs do (eventually) come for them.
It would suck if a PHEV with a 30km electric range pays the same RUC as one with a 100km range though. And would the rate be lower than a fully electric car to offset your fuel tax? Meaning a PHEV is cheaper than a full electric if you only drive short distances (buy an additional petrol engine just to save tax!).
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.