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
The Co-operative Bank raised both its 18 month and two year fixed rates today.
TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here today.
TRANSITIONING LOWER BUT STILL VERY HIGH
Supplier costs for Foodstuffs rose again year on year in June, but momentum in these cost increases is moderating. The Infometrics-Foodstuffs Grocery Supplier Cost Index shows an +8.3% increase in what suppliers charged supermarkets for goods in June 2023 compared to a year ago. That is down from the May increase of +8.8%.
HIPKINS, O'CONNOR SIGN FTA WITH THE EU
Fresh from his trip to China, PM Chris Hipkins has now jetted off to Europe. Over the weekend he and Minister for Trade and Export Growth, Damien O’Connor, signed a Free Trade Agreement with the European Union. They say New Zealand will gain up to $1.8 billion in exports to the EU annually. Meanwhile, as Australia eyes its own EU trade deal, Aussie farmers are telling their government to do better than the kiwis have.
CALL FOR MORE AS 40 YEARS OF CER MARKED
The Australia New Zealand Leadership Forum (ANZLF), a by invitation group of business and government leaders, is calling for the removal of barriers to the movement of people and goods between the two countries, and renewed focus on new areas of opportunity including climate change, the digital economy and indigenous collaboration. This comes as the 40th anniversary of the Closer Economic Relations trade agreement is marked.
SUBDUED & TOUGH
The combination of winter and a very tough housing market is keeping the number of houses selling at auction very subdued. Only 91 sold of the 213 auctions we monitored last week. Only a quarter of them made their rating valuation or more.
FRAUD PROTECTION
BNZ said it will stop sending links in text messages. The move follows Aussie parent NAB after high-profile frauds attract widespread attention. Also see this.
RBNZ READIES CAPITAL INSTRUMENT FOR MUTUAL BANKS
The Reserve Bank says development of a framework for capital instruments for mutual banks such as The Co-operative Bank and SBS Bank is nearing completion. Affected entities have an opportunity to review the documents by July 31 before the framework is finalised. The idea is to give mutually owned banks a capital instrument that could qualify as Common Equity Tier 1 capital.
SFO FILES CHARGES AGAINST LAWYER
The Serious Fraud Office (SFO) has filed charges against a Bay of Plenty lawyer for allegedly falsely claiming almost $450,000 from a legal support scheme funded by the Ministry of Justice. Paulette Main faces 30 charges of obtaining by deception and two charges of obstructing a SFO investigation. She appeared in Tauranga District Court today and was remanded without plea. The SFO alleges Main submitted more than 1500 false claims to the Ministry of Justice’s Family Legal Advice Service (FLAS). The service funds eligible lawyers to give out-of-court advice in Care of Children Act disputes. Lawyers can claim a fixed fee from the Ministry of Justice for providing services under the FLAS. Main is next scheduled to appear on August 3.
CHINA INFLATION FLAT
China's annual inflation rate was unexpectedly flat in June, compared with market expectations and May's figure of +0.2%. This was the lowest reading since deflation in February 2021.
CHINA PPI DROPS
China's producer prices dropped -5.4% in June from a year ago, a faster decline than a -4.6% fall in May and worse than market forecasts of a -5.0% drop. It was the ninth straight month of producer deflation and the steepest fall since December 2015. It comes amid weakening demand and fast-easing commodity prices.
SWAPS STILL RISING
Wholesale swap rates are probably up again today, although more modestly this time. 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 5.70% and now +20 bps above the 5.50% OCR. The Australian 10 year bond yield is up +1 bp from this time yesterday at 4.29%. The China 10 year bond rate is unchanged at 2.70%. But the NZ Government 10 year bond rate is now up +4 bps at 4.94% to a new 12-year high, and still higher than the earlier RBNZ fix which rose +2 bps to 4.82%. That's its highest since December 2013. The UST 10 year yield has edged up +2 bps to just under 4.09%.
EQUITIES MIXED (LOST?)
The NZX50 has started the week down -0.5% while the ASX200 is unchanged in early afternoon trade. Tokyo has opened down -0.6% while Hong Kong has opened the other way, up +1.1%. Shanghai has opened up +0.4%. Who knows how Wall Street will open tomorrow, it is doubtful the S&P500 futures -0.2% will be a key indicator.
GOLD HOLDS
In early Asian trade, gold is holding unchanged from where we opened this morning at US$1924/oz.
NZD HOLDS
The Kiwi dollar is little-changed, now at just on 62 USc. Against the Aussie we are down slightly at just over 92.8 AUc. Against the euro we are unchanged at 56.6 euro cents. That means the TWI-5 is still at 70.2.
BITCOIN SLIPS AGAIN
The bitcoin price has again slipped marginally lower today and is now at US$30,111 which is down another -0.5% from where we were when we opened this morning. Volatility has remained low at just under +/- 0.8%.
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51 Comments
- Australian farmers have urged Trade Minister Don Farrell to walk away from the EU deal if it’s like the one signed overnight with New Zealand.
- New Zealand PM Chris Hipkins inked the agreement in a ceremony alongside European Commission President Ursula von der Leyen.
- New Zealand says the deal will eventually allow its producers tariff-free access for 97 per cent of goods.
- However, there are limits on New Zealand exports of key goods like beef, butter and cheese to the EU.
Headline news over the ditch that NZ got a bit of a dud deal.
https://www.smh.com.au/world/europe/don-t-copy-the-kiwis-australia-urge…
Meh, an Aussie deal would be completely different anyway. Might include bauxite/gas/iron ore etc, its a whole different kettle of fish. For us gaining up to $1.8b in trade each year plus a lot of bonuses coming our way as well, isn't bad at all. So no surprise they would walk away from a similar deal, I wouldn't blame them for a completely different economy.
When did it become our feta cheese? The concern is more because of the non-traditional way we make feta in NZ. Countries other than Greece are allowed to call their feta feta.
For one, there is no such thing as cow feta: the base has to be sheep's milk or a mixture of sheep and goat's milk.
You are joking aren't you?!
The standard of cheeses in supermarkets here is appalling. The fact that that tasteless pale yellow rubber they call "edam" or colby is so popular speaks volumes. It shouldn't even be legal to call it cheese.
Standard greek feta is way better than you can get here. Ditto greek yoghurt (fage). Ditto brie and camembert.
Perhaps you need to change brands. The only cheese I eat is Mainland Nobel and our Camembert and Brie is excellent, try Puhoi or Mainland. Some of the triple cream cheeses are heaven, especially the Blues's. Ours Cheese is outstanding. Brie on Snax crackers with a dob of Branston pickle, total heaven with a glass of Oyster Bay Sav. Bit of a foodie here, cannot cook for shit but can critique food with the best of them.
You can get nice cheese here, but you really have to pay for it. "Standard" cheeses in europe much better. I do buy the nicer stuff because i like proper cheese.
Many kiwis don't know how to do "Brie" properly either, cold and hard out of the fridge inatead of running off the plate.
nz cheese is shockingly bad. we made good milk powder for mass produced cheese though.
i'm okay with their being protection on the term feta. we do the same for greek yoghut (represents the straining method) and other things like extra virgin olive oil (but not quite as well as the aussies do there). in turn we would expect the same over something like honey - which the americans are all too happy to have fake honey be called honey.
Fonterra (FBNZ Eltham)took out a few Champion awards last month at one of the largest cheese awards in the world
https://www.internationalcheeseawards.co.uk/content/icda-results
The West is very silent on this. The BRICS summit should be interesting. Don't think Granny Herald will be sending a correspondent to the BRICS summit.
According to state-run RT news, Russia has reportedly inferred that BRICS is set to create a trade currency that is backed by gold. Moreover, the news arrives after the BRICS New Development Bank confirmed that there are no immediate plans to create a currency alternative for the bloc.
Conversely, there is now expected to be an official announcement made at the upcoming BRICS summit regarding a gold-backed trade currency. Subsequently, the development has arrived with just a month until the official summit takes place. There, it is expected that currency plans, and expansion, will dominate the discussion.
https://watcher.guru/news/russia-confirms-brics-is-creating-a-currency-…
Apparently, you need to offer 10% discount on sticker price to get people to even look and real negotiation doesn't kick in until 15%+.
Luxury homes in Shanghai have come under pressure amid worries about China’s faltering economy, with some rich families cutting prices by 5 million yuan (US$691,140) to attract buyers, according to property agencies and consultancies.
However, would-be buyers remain cautious, with most of them looking to bargain down prices even further amid the weak environment.
“High-priced flats and houses [in Shanghai] have been regarded as safe investments over the past two decades because of limited supply,” said Ding Haifeng, who works for financial consultancy Integrity in Shanghai. “The luxury homes market bucked the downward trend in the local property market earlier this year, but it seems as if it has finally fallen victim to a weak economy.”
https://www.scmp.com/business/china-business/article/3226982/shanghai-l…
China's annual inflation rate was unexpectedly flat in June, compared with market expectations and May's figure of +0.2%. This was the lowest reading since deflation in February 2021.
The high growth era of China is over. In terms of high-productivity Chinese investments it ended 15 years ago but minting debt to build white elephants has extended that period.
Why is Japanese spending down contributing to global demand weakness forcing Saudi Arabia to intervene just to keep oil from falling even more? Japanese incomes absolutely crashed. That's not hyperbole. Nominal HH incomes fell more than 6%...just in May https://buff.ly/3rlyt2v Link
China's Economy Is In Big Trouble And Investors Should Get Out: Miles Yu
https://zerohedge.com/geopolitical/chinas-economy-big-trouble-and-inves…
Fonterra has about 900 million reasons why people should not be investing with them in the first place. Their business culture towards foreigners is a disaster, as the US firms will find out as they shut their Chinese operations to transfer to India, Vietnam, or back home. A shareholder in one of my businesses lost his shirt there over the last 3 years. His "partners" faked debts he owed them, and he was lucky to be allowed out to go back to NZ and start again.
WoW, let's crack a bud light to celebrate
Thai business mogul Anne Jakrajutatip, a trans activist who is also transgender, bought the Miss Universe Organization last year. She has said she's committed to advancing the organization as an inclusive platform and wants to transform the brand for the next generation.
Some goodies for stockmarket bears from ‘Houses and Holes’ David L.S. over at Macrobusiness:
https://www.macrobusiness.com.au/2023/07/ai-bubble-begins-to-burst/
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