What happened Monday

Economy / news

A review of things you need to know before you sign off on Monday; many mortgage rates increases, a few TD rate increases, tiny trade surplus, seeking more Tier 2 capital, swaps and NZD stable, & more

24th Jul 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/LOAN RATE CHANGES
Heartland Bank raised fixed rates today, each by about +20 bps. The Cooperative bank raise its 6 mth and 12 mth fixed rates by +10 bps. Heretaunga Building Society raised its 1 and 2 year fixed rates. Unity Money raised their fixed rates by about +20 bps. Westpac has also raised fixed rates for 6 mth (+10 bps), 1 year (+20 bps) and 18 mths (+6 bps). WBS raised theirs too.

TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ raised many term deposit rates today, taking their 6 mth rate to 5.75% and their 12 month rate to 5.90%. Those now match Kiwibank as the highest main bank offers for those two key terms. Unity Money pushed its one year TD rate up to 6.00%.

SMALL MONTHLY SURPLUS HOLDS OUR HUGE ANNUAL DEFICIT
There was some very unusual trade data out today. In June 2023, compared with June 2022 goods exports rose +$84 mln (or +1.3%), to $6.3 bln in the month while goods imports fell -$1.1 bln (or -14%), to $6.3 bln. That meant the monthly trade balance was a surplus of +$8.8 mln, taking the April to June quarter to a surplus of +$293 mln. Tiny, yes but an unusual surplus. In 2022 it was a deficit of -$515 mln. Longer term the perspectives aren't so positive. (For the year to June the deficit was -$16 mln and we have never had a June year deficit that large before. It is equivalent to -4.1% of GDP.)

STILL RESPONSIBE WITH CREDIT CARDS
Credit card balances were little-changed in June from May and only +2.8% higher than a year ago, failing to keep up with inflation by some margin. But we are not really seeing any overt signs of credit card stress yet. The proportion incurring interest has been stable at a level that is historically low at about 52%. That is a very long way lower than the ~75% of balances incurring interest just prior to the GFC. Credit card transactions are rising, even if slowly. We are keeping an eye on the level of transactions being driven by these cards when are are used overseas.

WESTPAC GOES TO THE WELL AGAIN TO BOLSTER CAPITAL
Westpac is looking to raise more Tier 2 capital from savers. It is about to "offer of up to $100 mln with the ability to accept unlimited oversubscriptions at Westpac’s discretion" in the form of unsecured subordinated notes. They will only be rated A- by S&P, compared to the bank's general AA- rating. The term will be 10½ years although Westpac could redeem them in 5½ years.

CONTRACTING, BECAUSE SERVICES ARE WEAKER
In Australia, business activity in their private sector fell for the first time in four months during July according to the Markit PMI. This retreat was due to a renewed contraction in their service sector as interest rate rises hit customer confidence and budgets. More positively, manufacturing output ticked higher and actually recorded only a tiny contraction.

EXPANDING, BUT MORE SLOWLY
The Japanese Markit PMI recorded a good expansion. Activity at Japanese private sector firms increased for the seventh successive month. Key was a sustained and solid improvement at Japanese service providers, while manufacturers noted a slightly softer downturn at the start of the third quarter and the survey found that new order growth slowed rather sharply.

SWAPS LITTLE-CHANGED
Wholesale swap rates are probably little-changed again today. 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 -1 bp at 5.66% and now +16 bps above the 5.50% OCR. The Australian 10 year bond yield is holding at 4.00%. The China 10 year bond rate is again little-changed at 2.66%. And the NZ Government 10 year bond rate is hardly changed from this morning at 4.66%, but still higher than the earlier RBNZ fix which rose +1 bp to 4.61%. The UST 10 year yield is very little-changed at 3.85% today.

EQUITIES MOSTLY HIGHER
The NZX50 has started the week on a positive foot, up +0.4% near the end of Monday trade. The ASX200 is up a mere +0.1% however in afternoon trade. Tokyo has started the week strongly, up more than +1.0% in early trade. However Hong Kong is down a sharp -1.0% at their open (although extreme volatility has become a hallmark in this stick exchange), and Shanghai is up +0.2%. Wall Street isn't open of course, but the S&P 500 futures have it trading +0.6% above its Friday close.

GOLD UNCHANGED
In early Asian trade, gold is at US$1960/oz and virtually unchanged from this morning.

NZD ON HOLD
The Kiwi dollar is little-changed from this morning, now at just on 61.6 USc. Against the Aussie we are similarly stable at 91.6 AUc. Against the euro we still at 55.4 euro cents. That means the TWI-5 is still at 69.5.

BITCOIN VIRTUALLY UNCHANGED AGAIN
The bitcoin price is down a minor -0.9% from this morning at US$29,840 and still in its yo-yo pattern. Volatility has been low at just under +/- 0.9%.

Daily exchange rates

Select chart tabs

Source: RBNZ

Source: CoinDesk

Daily swap rates

Select chart tabs

Source: NZFMA

This soil moisture chart is animated here.

Keep abreast of upcoming events by following our Economic Calendar here ».

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.

83 Comments

by JimboJones | 24th Jul 23, 4:07pm 1690171661

East Aucklanders burn down state housing: https://www.nzherald.co.nz/nz/auckland-fire-blaze-rips-through-kainga-o…

by Zwifter | 24th Jul 23, 4:13pm 1690171990

Pretty obvious that one pissed off local resident has now joined the arsonist club.

by mfd | 24th Jul 23, 4:52pm 1690174369

Imagine being an arsonist and simultaneously thinking that someone else is the riff-raff that needs to be kept out of your neighborhood.

by Mr Frank | 24th Jul 23, 4:57pm 1690174638

Don't worry, if you are not white, have divorced parents, etc you'll get home D with PlayStation.

by mfd | 24th Jul 23, 5:02pm 1690174946

I would be fascinated to see your research showing that white people are treated worse by the justice system.

by Mr Frank | 24th Jul 23, 5:19pm 1690175956

Read my statement again that might help.

by mfd | 24th Jul 23, 5:24pm 1690176296

I read it again - it still suggests that non-whites get a soft touch. Curious how you reached this conclusion.

by Mr Frank | 24th Jul 23, 5:46pm 1690177606

You must be a typical Labour supporter.

by mfd | 24th Jul 23, 6:05pm 1690178715

Nope, never voted labour in my life. No plans to this time. I'm not arguing on ideological grounds, just evidential.

by Mr Frank | 24th Jul 23, 6:39pm 1690180788

You vote for whoever you like but you must be living under a real large rock not to have noticed anything over the past 6 years.

by Pa1nter | 24th Jul 23, 6:47pm 1690181269

He does have a point. Unless you used the wrong words, your comment reads like non Pakeha get favourable treatment by the justice system. I think the inverse might be more the case, but if you have something evidential that'd be nice to peruse good chap.

by MLSmith1 | 24th Jul 23, 7:52pm 1690185134

I’d imagine the number of people getting lite sentences by way of ‘cultural reports’ will overwhelmingly be those that can blame the racist colonial system that made them that way! And if that doesn’t work, then the Maori Labour caucus will find another policy and pressure point to ensure the judiciary’goes lite on crime

by agnostium | 24th Jul 23, 9:36pm 1690191395

'I'd imagine"

Right so the evidence base is your imagination.

by Twitchbar@ | 24th Jul 23, 6:39pm 1690180796

Try the health system

by Hummy | 24th Jul 23, 7:08pm 1690182534

If that doesn't work just tell them you are using, that gives you a 25% discount.

by Flying high | 24th Jul 23, 7:49pm 1690184986

I'm sick of hearing claims about institutional racism in the system

Which leads to going easy on dangerous criminals simply on the basis of positive racial discrimination

by Pragmatist | 24th Jul 23, 4:16pm 1690172216

Only surprised it hasn't happened sooner.

by rastus1 | 24th Jul 23, 4:19pm 1690172361

..another version of poisoning the pohutakawa perhaps? Fire report will be awaited with interest.....

by Von Metternich | 24th Jul 23, 4:44pm 1690173857

Good on them. The government shouldn't be able to dump the underclass on your community.

by JimboJones | 24th Jul 23, 4:46pm 1690174009

Because privatising it worked so well?

by Von Metternich | 24th Jul 23, 5:06pm 1690175170

Because no one wants the sort of people who are in social housing in their community.

by mfd | 24th Jul 23, 5:11pm 1690175473

I grew up in a mixed development in the UK without any problems. My parents had a nice detached place, next street over is council flats. I had a few friends from over there, went to the same school etc. What is it that you're worried about?

by Foxglove. | 24th Jul 23, 5:20pm 1690176058

What amuses me, sort of, is how our TV adverts have diversified to the point that it is often that any caucasian actor or presenter is hard to find. Yet when the retirement/ rest home complex people run their ads, it’s the other way round.

by HouseMouse | 24th Jul 23, 5:43pm 1690177395

When was that Mfd? I think it’s fair to say that people’s behaviour has deteriorated over the last 30 years, not just in NZ but globally.

by mfd | 24th Jul 23, 6:01pm 1690178512

That is possible. I'm in my mid 30s so a couple of decades ago. My parents are still in the same house, still no problems.

by HouseMouse | 24th Jul 23, 6:15pm 1690179333

Also, I don’t know about the UK, but public housing in NZ used to house quite a few people who actually worked and were productive. Over time, more of those people have been housed in the lower end of the private rental market, whereas public housing has accommodated more of the drop outs and trouble makers.

by nzphoenix | 24th Jul 23, 8:56pm 1690189005

In the UK, the “council housing” housed a lot more people than just those on very low incomes / unemployed / etc. The Tories then sold them off (via a number of methods) and now there is an extremely long list for council housing. Classic Tory behaviour.

by Von Metternich | 24th Jul 23, 7:25pm 1690183504

Social housing once upon a time was available to ordinary people. Try getting it today without the help of system wise social workers.

Within Housing New Zealand (and whatever the new name of that organisation is now), you need to be at least A12 ranked to get a social house. It was once a priority queue ranked A through Z. Now you only get a place if you are in A category, subdivided into A1 through A20. No obligation to maintain the houses (my youngest brother mows the lawns on behalf of social housing tenants), half the houses are destroyed inside and occupied by utter degenerates.

This is not the council housing and social housing, rent to own schemes of WW2 and before. Without a social worker to get you into the fortunate social housing class, expect to move tenancy once per year, paying the 15% property manager fee on top of your extreme rent prices.

by Flying high | 24th Jul 23, 9:57pm 1690192668

Youre anti, social housing and the people who occupy it, that's obvious.

But you end the comment with the woes of being in market rentals. You've obviously had a bad run with private landlords and their property managers.

My landlord is a good guy and he makes improvements to the property. I guess he doesn't want to lose us.

by Pa1nter | 24th Jul 23, 10:07pm 1690193257

He's not anti social housing, just anti it for non-ordinary people. Whatever that means.

by Noncents | 24th Jul 23, 11:25pm 1690197930

Based on my own experience,

ordinary people are those that are in the housing solely due to economic need. They are often (but not always) single mothers, working hard, prioritising their kids, and trying to make a better life for themselves.

Then there are the other group. They also have economic need, but the main driver for their housing issue is that they have generally been kicked out of everywhere else due to various anti-social behaviours. They tend to destroy the property, intimidate neighbours, and show little to no respect for social norms.

The correct housing solution for the latter is Prison.

by Pa1nter | 25th Jul 23, 4:55am 1690217737

So like, a heavily romaniticised ideal of our underclass.

Instead of the actual reality of our underclass.

by Flying high | 24th Jul 23, 9:03pm 1690189429

by Von Metternich | 24th Jul 23, 5:06pm 1690175170 Because no one wants the sort of people who are in social housing in their community

Residents will be worried about the effect this will have on their property values. That's why I'm glad to be a tenant. The gubmint has punished landlords and allows tenants to walk from fixed term agreements. Have cake and eat it.

by morepork | 24th Jul 23, 5:42pm 1690177344

Keep the KO residents, kick the arsonist out

by streetwise | 24th Jul 23, 6:47pm 1690181256

I agree. This is truly Ku Klux Klan stuff. The other night there was a very good doco on the history of the KKK and this sort of thing was in their toolkit.

Also, this is taxpayers' money going up in smoke. Change is always happening. Areas change. If you don't like it sell up and move on or set up your own political party to change policy. Or emigrate to Queensland (or Queenstown).

I expect the police to fully resource the investigation, and the courts to throw them in prison for a very long term. And pay back the taxpayers.

by HouseMouse | 24th Jul 23, 7:03pm 1690182221

Yeah, although I sympathise to some degree with people who have a big KO Development built near them. I wouldn’t be happy, although I like to think I would accept the need for it.

by agnostium | 24th Jul 23, 9:39pm 1690191573

Let the arsonist put up the KO tenants in their own house.

by WhenwillitEnd | 25th Jul 23, 12:36am 1690202215

i grew up in the 1960s where there was an experiment to include state housing within new subdivisions in West Auckland. On one side of us (my parents were rural white poor) were a troubled family (dispossessed Maori) where we could regularly hear the mother being beaten up. I played with the kids, though a wire fence separated us. Kids had glue ear, constant colds, constantly hungry. sometimes the only food they had all day was weetbix. It gave me a sense of something wrong with all adults and also as a child it was horrible to hear the mum screaming for help.

My grandma lived near us and she had state housing on either side. It was like she was living in siege conditions. Constant violence and week-long parties either side; drunk or drugged people or someone fleeing the cops always running through the property. Though she tried her best to get along and would give them veggies she had grown and took an interest in the kiddies. they too had glue ear, were hungry, didn't go to school hardly at all.

I grew up thinking all this was normal.And that was 60 years ago.

by blobbles | 24th Jul 23, 6:23pm 1690179798

Must keep the undesireables away from precious wee Timmy.

Unsurprising the millionaires don't want social housing in their backyard, classic NIMBYs.

by Von Metternich | 24th Jul 23, 11:15pm 1690197321

Yeah because the negative consequence of violent criminal underclasses is they harm you and your family, either directly through violence and crime or indirectly by destroying a community.

by Flying high | 24th Jul 23, 9:50pm 1690192217

You're just blowing off a lot of hot steam. I'm starting to get agitated with your OTT description of others who are different to you.

by the Joneses | 24th Jul 23, 9:54pm 1690192484

Arson is by definition violent, criminal and community destroying.

by sit23 | 24th Jul 23, 10:32pm 1690194726

No. Arson is just the deliberate burning of something. Nothing else. Why would anybody commit arson?In this particular case it is obvious. The arsonist, and people in the existing community feel that the people who will be living in the social housing will do bad things to them. Will they? Ask the people who live near the emergency accommodation motels in Auckland. Maybe some commenter here does, and can give us an informed opinion. I have already heard stories about the goings on in these places, but would like a firsthand report.

by Pa1nter | 24th Jul 23, 10:35pm 1690194924

Mostly Yahtzee and advanced crochet I believe.

by blobbles | 25th Jul 23, 10:00am 1690236014

Murder isn't murder. Its just the deliberate killing of someone. Nothing else.

Arson is a criminal act, for good reason. Much like most criminal acts.

by blobbles | 25th Jul 23, 10:01am 1690236062

Exactly. GATED COMMUNITIES NOW! That will solve all our problems.

by DollarsandSense | 24th Jul 23, 4:10pm 1690171829

Wow Westpac just raised the 1 Year fixed mortgage rate....last time they did that the 1 Year Interest rate swap was at 6.04%....it closed yesterday 5.85% (DOWN 0.19%) and they raise their 1 Year Fixed Mortgage Rate by 0.10%.....must be some demand for one year fixed mortgage rates or maybe they just put a plus sign in the press release rather than a minus sign.....that is banking for you debits/credits what is the real difference

by Zwifter | 24th Jul 23, 4:14pm 1690172050

Great stuff 6% on a 12 month TD by Christmas guaranteed.

by Mr Frank | 24th Jul 23, 4:27pm 1690172826

I like.

by Retired-Poppy | 24th Jul 23, 6:17pm 1690179438

With Rabo, its a hassle free 6.15% up till Christmas 2024 Guaranteed. Why own a rental?

by Flying high | 24th Jul 23, 6:34pm 1690180492

And ahead of inflation. A welcome surprise

by MisterB | 24th Jul 23, 8:37pm 1690187872

That's likely because rates havent yet fully passed on all the increases in swaps... in 2008 when swaps were this high, 12 month fixed rate was 8% and 12 month term deposit was about 6.3%... looks like TDs are catching up but a bit of upside risk on home loans still.

by Jaybeedee | 24th Jul 23, 4:15pm 1690172106

I wonder if one of the factors keeping credit card balances flat is the surcharge many merchants now have? (And just to be clear, I don't begrudge them doing it, the merchants fees really eat into their margins )

by MisterB | 24th Jul 23, 8:40pm 1690188020

The stat on being flat is on balances, not spend (the c-13 shows spend)... which looks to be up around 7% year on year. It just means people are paying it off, which they should do.

by bw | 24th Jul 23, 4:28pm 1690172890

New Zealand’s total gross debt continues to expand and break new records. ...Every Kiwi on average now owes $151,000 in raw debt. (Paywalled - Herald)

by Jonny.Foe | 24th Jul 23, 5:42pm 1690177354

Total private (business and household) debt is around $550 billion - but businesses and households have about $450 billion in the bank (and about $100 billion of savings / investments in the form of Govt Bonds). So private sector debt almost nets out - as you would expect given that loans are the source of deposits!

What is scary is that since December 2016, the banks have pumped $60M of new credit money per day into the economy, where it passes quickly through the housing ponzi scheme, into the economy, and then into the savings accounts of already wealthy people. Govt have also net spent over the last few years - adding around $15M of money per day. Again, this new money has found its way quickly into the bank accounts of the already wealthy.

Obviously, in a functional economy, 90% of our credit would not be flowing into property! We would instead be using credit to invest in things that make our economy more efficient and increase innovation and productivity. The most innovative thing we have done at scale in the last ten years has been converting lounges in rentals into an extra bedroom.

by IT GUY | 24th Jul 23, 4:33pm 1690173190

‘Rent often can’t cover the mortgage’: Investors go to auction

Almost a third of all auction listings in Sydney and Melbourne over the past week were investment properties, as higher interest rates and taxes force landlords to sell.

The surge in Sydney was strongest, with data from Ray White, Australia’s biggest estate agent, showing investor listings doubled to 30 per cent in the week.

by J.C. | 24th Jul 23, 4:35pm 1690173309

12 countries get together in Australia to prepare and practice for WW3 against China in the Talisman Sabre military exercise with 30,000 troops.

At the same time, we're literally begging with the Chinese to migrate here and pay silly amounts of money for houses, education, milk powder, and whatever else we can hawk to them.

Nothing makes sense anymore.

https://www.abc.net.au/news/2023-07-20/talisman-sabre-war-games-townsvi…

by Foxglove. | 24th Jul 23, 4:44pm 1690173860

No nothing makes sense any more. An understatement. Housing development in Tauranga reportedly desperately needed cannot proceed because the roading infrastructure is not in place and the roading infrastructure cannot be constructed because there are insufficient houses to justify it. The author captions it as Catch 22. Hell good as he was even Heller couldn’t have dreamt that one up! Ride forth the Brown Cardigan Brigade “All Authority No Responsibility.”

by agnostium | 24th Jul 23, 9:42pm 1690191779

Nah, that the spin the developer and landowners are putting on it. They want us all to subsidise their development and transfer money from the public sector the the private. If the roads stack up then let the developer build, own and maintain them.

by Von Metternich | 24th Jul 23, 4:46pm 1690174008

We wouldn't even win a world war, we lack the industrial capacity or the motivation. It isn't the 20th century, dominated by one way transmission of radio, television and newspapers which create consensus. There is widespread discontent with the economic inequality, the endless importation of slave labour, the everything bubble and so on. I'm not signing up to fight for this country again, nor should anyone else.

by J.C. | 24th Jul 23, 4:50pm 1690174202

We wouldn't even win a world war, we lack the industrial capacity or the motivation.

Imagine going to war with Cindy Ardern at the helm. I know it's absurd but just give the thought 5 secs.

by dumbthoughts | 24th Jul 23, 5:04pm 1690175045

"Some of you may die, but it's a sacrifice I'm willing to make for a Vogue cover shoot"

by powerdownkiwi | 24th Jul 23, 5:25pm 1690176306

That's entirely unfair - and I haven't voted labour since '84.

She was blind but in the other sense; thought you should attempt to keep everyone alive. And, during Covid, did a good job of it.

But we are entering a period of global conflict over 'what's left'. I don't see any current politician, Left, Right or Centre, that I'd want to be in a wartime cabinet. Maybe that's the way it always is....

by Foxglove. | 24th Jul 23, 5:51pm 1690177891

Worse than that. In war, in the trenches, I would want to be sure that any of our lot of politicians, were in front of me, not behind. However, to be fair and contradictory to that somewhat, the true politician would always be in the front line for medals and well behind the lines for action.

by dumbthoughts | 24th Jul 23, 6:26pm 1690179964

I agree it's an unfair comment, I just couldn't resist ... how can you say no to a Shrek reference?

by Foxglove. | 24th Jul 23, 7:59pm 1690185546

Shouldn’t have laughed, but I did. Admittedly too, haven’t had a pang of guilt about it either.

by blobbles | 24th Jul 23, 6:26pm 1690180014

Please watch this documentary series (OK comedy) that hits the nail on the head perfectly: https://www.youtube.com/watch?v=sgspkxfkS4k

by Dgm | 24th Jul 23, 4:39pm 1690173565

Spruikers have been arguing that interest rates were about to start falling..hahahaha

by Retired-Poppy | 24th Jul 23, 6:24pm 1690179862

They also argued that since interest rates had now peeked that house prices would stop falling with immediate effect. Such short sightedness sidelines the lag effect of fixed interest rollovers for starters. They've only succeeded in making themselves the entertainment.

by Flying high | 24th Jul 23, 6:39pm 1690180796

Rollovers for starters

A tasty h'orderve for the unwary

by Yvil | 24th Jul 23, 9:07pm 1690189669

"Hors d'oeuvres" possibly?

by Flying high | 24th Jul 23, 10:50pm 1690195850

If said in jest then fine. Otherwise you are just a prissy know it all. What does the correct spelling of French have to do with financial knowledge and decisions Dr Evil

by Dgm | 25th Jul 23, 6:43am 1690224231

Now spruikers are having a go at each other..pity

by Flying high | 25th Jul 23, 7:04am 1690225460

Nope I'm with you and always will be

by J.C. | 24th Jul 23, 4:40pm 1690173615

Sydney land prices have become too expensive for Amazon.

A new report from CBRE found Sydney had just a 0.2 per cent vacancy rate for buildings 5000 sq m and greater for the first half of 2023 – the lowest globally. The vacancy rate in some precincts is almost zero.

This lack of vacancy, a product of surging demand driven by e-commerce and a lack of supply due in part to a “broken planning system”, has pushed prime Sydney rents up by 38 per cent over the past year to $215 per sq m, compared with $119 per sq m in Melbourne, where the vacancy rate is 1.1 per cent.

https://www.afr.com/property/commercial/big-companies-mull-a-sydney-exo…

by JimboJones | 24th Jul 23, 4:49pm 1690174167

Land taxes, which have risen 100 per cent to 130 per cent this year due to a doubling of industrial land values to $800 to $1000 per sq m, are behind much of the increase in outgoings.

“Sydney landlords are now telling all their tenants their outgoings for the 2023-24 financial year are going up on average by $10 to $20 per sq m (in some instances it’s been up to $40 per sq m),”

by IT GUY | 24th Jul 23, 5:24pm 1690176255

no signs of inflation then.......

by J.C. | 24th Jul 23, 5:26pm 1690176394

The money's gone. Maybe all of it. Young hotshot who cut his teeth at Deloitte and BDO. CFDs in the mix.

Magnolia, started in 2015 by Atkins in the basement of his family home on the Central Coast of NSW, had clients across Australia and had $1 billion in funds under advisory.

Its investors included some of Australia’s richest families, including the family of Melbourne business magnate and philanthropist the late Victor Smorgon, as well as successful entrepreneurs, barristers and private investors with self-managed superannuation funds.

Magnolia claimed to operate the best-performing share fund in the country. It also ran a private lending business that helped to arrange loans for borrowers looking to complete property developments or buy more exotic items, such as a $1.2 million Ferrari, and offered investment in a fund holding a $30 million Lamborghini Essenza SCV12.

https://www.smh.com.au/business/banking-and-finance/everyone-thinks-i-m…

by IT GUY | 24th Jul 23, 7:29pm 1690183756

Annnnnnnnd its gone....

by Independent_Observer | 24th Jul 23, 7:59pm 1690185561

US yield curve remains deeply inverted. More inverted than prior to the deflationary recessions of the past 30 or so years.

More similar to the stagflation of the early 1980's.

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

by Independent_Observer | 24th Jul 23, 8:04pm 1690185885

Are we starting a new 40 year trend in interest rates?

1981 - 2021 were 40 years of falling rates (and the 1940's - 1980's were decades of rising rates).

Have we now turned a corner to a point where we see decades of higher/rising rates?

I'm not convinced we will ever see rates as low again as what we have just experienced - but nothing is guaranteed (other than 10% mortgage rates by xmas of course!)

https://fred.stlouisfed.org/series/DGS10

by Pa1nter | 24th Jul 23, 8:26pm 1690187169

Some of it'll come down to whether what's going on at the moment is mostly the result of covid era industrial and economic consequences, or whether covid was just a coincidence to some sort of greater cycle.

The former makes it really hard to put an inordinate amount of faith in the latter