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). This version is updated to record the fall in swap rates. See below.
MORTGAGE RATE CHANGES
BNZ raised most fixed rates today, but not by as much as some of their rivals. More here.
TERM DEPOSIT/SAVINGS RATE CHANGES
No changes to report here today.
BLUEPRINT TO BUILD EXTENDED BUT ALSO WATERED DOWN
ANZ advised that they have withdrawn their 'Blueprint to Build' special mortgage interest rate, which was 5.88% floating. They have replaced it with a broader program that offers 'discounts' to their standard mortgage rates, which means that borrowers in this program can choose fixed rates now. The floating rate discount is -1.25%, so given their current standard floating rate is 8.64%, the BtB floating rate now becomes 7.29%. Access to fixed rates is also discounted, and by -0.6%. But that just makes the BtB fixed rates the same as their Special LVR under 80% rates which are also a -0.6% discount to their standard rates.
HOUSE PRICES VALUES STILL FALLING
The QV House Price Index (HPI) fell another 1.8% nationally in the three months to June. Since the peak in values at the beginning of 2022, the national average value is down $172,180, and the average value in Auckland has declined by $299,332.
GROCERY COMMISSIONER NAMED
Pierre van Heerden, the former Mojo Coffee and Sanitarium executive, is New Zealand’s first Grocery Commissioner. Van Heerden will monitor the state of retail supermarket competition and whether consumers are getting a fair deal, keep an eye on how retailers are treating suppliers, and investigate whether competitors are getting a decent offer from the newly-opened wholesale networks. He will also take charge of a range of potential enforcement actions, including fines.
GOING SOFT
Household spending was up just +3.3% in May in Australia compared to the same month a year ago. That is way less than inflation. And discretionary spending is now going backwards, falling for a second month in a row. It hasn't done that since the start of the pandemic.
AUSSIE SENTIMENT STAYS LOW
In Australia, the Westpac-Melbourne Institute Consumer Sentiment index rose by +2.7% in July from June to a 3-month high. That matched matched the market consensus for this marker. The latest result followed a +0.2% gain in June as inflation eased and the RBA skipped further monetary tightening. But it was a minor gain and overall sentiment remains very low.
TURKEY CHANGES ITS TUNE
Not really something for this summary. But it is a surprise worth noting: Turkey has agreed to Sweden joining NATO.
SWAPS FALL
Wholesale swap rates are probably very little-changed today ahead of tomorrow's RBNZ rate review at 2pm. However, the real action in swap rates comes near the close. Our chart will record the final positions. (Update: they actually fell quite sharply. See chart below.) The 90 day bank bill rate is down -2 bps at 5.68% and now +20 bps above the 5.50% OCR. The Australian 10 year bond yield is down -6 bps from this time yesterday at 4.23%. The China 10 year bond rate is down a bit more than -1 bp to under 2.69%. And the NZ Government 10 year bond rate has eased back -4 bps to now at 4.90% to a new 12-year high, and still higher than the earlier RBNZ fix which rose +2 bps to 4.84%. That's its highest since December 2013. The UST 10 year yield has fallen back, and by -9 bps, to just on 4.00%.
EQUITIES MOSTLY HIGHER (EXCEPT THE NZX)
The S&P500 ended its Monday session on Wall Street up +0.2% managing to overcome small early session losses. Tokyo has opened its Tuesday session up +0.5%. Hong Kong has topped that at its open, up +0.8%. Shanghai is up +0.2% in their early trade. The ASX200 is the best of this buch, up +1.0% in afternoon trade. The odd-man-out is the NZX50 which is down -0.3% in late trade
GOLD HOLDS
In early Asian trade, gold is holding essentially unchanged from where we were this time yesterday, at US$1925/oz.
NZD HOLDS FIRM
The Kiwi dollar is marginally firmer, now at just on 62.2 USc. Against the Aussie we are up slightly at just over 92 AUc. Against the euro we are little-changed at 56.5 euro cents. That means the TWI-5 is also up slightly to 70.3.
BITCOIN FIRMS SLIGHTLY
The bitcoin price has risen today and is now at US$30,597 US$30,111 which is up +1.6% from this time yesterday. Volatility has been modest at just on +/- 1.7%.
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44 Comments
If anyone has switched banks recently I'd be interested to hear about your experience. You can contact me via email; gareth.vaughan@interest.co.nz
Thanks.
Haven't switched however we keep 3 banks on ropes as a going concern, currently our home loan is with westpac but everything else is with Kiwibank or ANZ, loved the westpacs dudes face when we renewed a few months back. "It seems like all you have is a basic account and eftpos card alongside your mortgage with us".... Correct, we spread our services between 3 banks so we can easily switch, you'll probably get our credit cards if we move the mortgage elsewhere.
Not sure why you would "Switch Banks" entirely, most people would prefer to keep multiple banks these days especially as we get closer to that promised depositors insurance. Got two here but 99% of the money is in only one of them currently. Could get crazy if the insurance is not for a decent amount, people might be tempted to open more accounts to give themselves cover.
Interesting to see someone has their mortgage with Westpac. What's the experience been like? I'm being forced to change bank.
Have had an account with Westpac (and its forebearers, starting with those little bags we'd deposit our pocket money into at primary school - post bank?) but don't really like them, though I do have a credit card with them (again, laziness).
Had a recent experience with ANZ that wants me want to switch banks.
Accepted a rate offer on their website to renew a fixed rate term. It went right through the process, and gave me a page showing my new end dates and fortnightly payments. great.
About a fortnight later, i get a email saying my floating rate is going up . WTF???.rang them immediately. The help person was pretty good , however she said there was no record of any attempt to fix a new rate. Did i get a email confirmation letter? no I did not. she then asked could i remember the rate and date etc. I told her the rate , but could not recall the date. no problem she , said she would contact the "back office team ", and see if they would backdate the rate to June the 13th.( rates had risen 0.5% in the meantime). huh , i said , where did that date come from ? there is apparently no record of me trying to fix a rate. no answer , but she seemed confident they would backdate it , so i didn't push it .
A few hours later , she rang back to say no , they wouldn't backdate it, i would have to fix from today at today's rate. I said i wasn't happy with that , and would look at changing banks . She said sorry , and that was that . i should have asked for it all to be put on email, but didn't.
ANZ advised that they have withdrawn their 'Blueprint to Build' special mortgage interest rate
Different teams within ANZ appear to be working in silos.
ANZ pulling the plug on this special rate regime sounds to me that their risk managers perceive higher risk on lending for new construction, which could render these projects infeasible creating further stress in the sector.
Yet economists at the bank assert that house prices have bottomed out and will likely grow despite one of NZ's largest employing industries suffering a bitter downturn potentially dragging a few other sectors down as well.
If banks are increasing their mortgage rates but not their savings and term deposits, or not by the same amounts, does this mean they are increasing their margins on each dollar they lend? They probably aren't lending anywhere near as much these days due to the house price crash
Standard Chartered suggesting ol' ratty has another 50-60% + in 2023.
OK. Whatever.
The value of top cryptocurrency bitcoin could reach $50,000 this year and $120,000 by the end of 2024 Standard Chartered (STAN.L) said on Monday, predicting the recent jump in its price could encourage bitcoin "miners" to hoard more of the supply.
Standard Chartered published a $100,000 end-2024 forecast for bitcoin back in April on the view the so-called "crypto winter" was over, but one of the bank's top FX analysts, Geoff Kendrick, said there was now 20% "upside" to that call.
https://www.reuters.com/technology/standard-chartered-bumps-up-bitcoin-…
I think thats kinda optimistic tbh, I personally think the chances of going below 24-25k are slim, there is a solid level of support around there and with all of the crap that has been thrown at the industry this year, I honestly dont know what news could come out to cause it to drop significantly.
What any proper market needs is stability J.C. People want certainty as to where things are heading. I'm fully expecting no OCR rise tomorrow. As soon as rates stop rising the house prices will stabilise. RBNZ still have their fingers crossed and are now like mortgage holders, hoping inflation will fall next year. Its all balanced on a knife edge for many people now.
As soon as rates stop rising the house prices will stabilise
You might want to read that article from the other day about how many mortgages are still to roll over on to higher rates...
Agreed Colin. Basically Orr is in Robertsons back pocket and hence its no rises before the election. Post election all hell could break loose, Orr and Labour wouldn't care as long as they are back in for another 3 years of Chaos. This election is like the last 100M of a marathon race for Labour, they have lost all control over their body and bowel and are just trying to reach the finish line.
Labour’s internal unrest and division looks certain to be amplified if this poll result is soon confirmed by others. For a start the Maori caucus, given their seemingly disproportionate influence, will likely be seeking that most their members should occupy the upper list numbers to ensure their jobs are secure. After all, the heat is coming on and only so many can get through the kitchen door. at any one time.
You talk like you know whats going to happen next, clearly this is your first Rodeo
As soon as rates stop rising the house prices will stabilise
As for RBNZ like mortgage holders, mate have you any clue how the MPC works? These guys set the rates, to achieve a target and right now that target must look a long long way away.
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