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
Nothing to report again today.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.
DOWN -$1500/DAY IN AUCKLAND
Barfoot & Thompson's July sales report shows volumes were steady but the median price dropped $45,000 in 31 days. They say the Auckland housing market 'has found a natural plateau'. Sellers seem motivated with listings rising. Will there be buyers?
PRESSURE ON COSTS STARTING TO EASE
Residential building costs show signs of flattening out. Construction costs for stand alone houses and apartments fell slightly in the second quarter, build costs for retirement village units still surging.
BEFORE BREAK-EVEN
Fonterra has slashed its 2023/2024 payout forecast by -$1 after a tough recent dairy auction that saw WMP demand from China drop. It has cut is payout range from a midpoint of $8.00/kgMS to $7.00/kg/MS. See here. If it holds, it will be below the break-even point for many dairy farmers. And that will be felt at Treasury in their company tax receipts. (This election might be a good one to lose?)
ANZ PLAN REJECTED
The Australian competition regulator has knocked back ANZ's AU$4.9 bln takeover of Suncorp Bank. It is not a complete surprise, with others working to merge Suncorp Bank with Bendigo Bank. The ACCC is promoting that 'solution'. But the problem with the alternative is that would be two weak institutions combining, and it wouldn't necessarily result in any strength improvement. The ACC said “We are not satisfied that the acquisition [by ANZ] is not likely to substantially lessen competition in the supply of home loans nationally, small to medium enterprise banking in Queensland, and agribusiness banking in Queensland. ... Second-tier banks such as Suncorp Bank are important competitors against the major banks, especially because barriers to new entry at scale into banking are very high”. ANZ said it isn't giving up.
SWAPS FIRMER & STEEPER
Wholesale swap rates are probably higher again today. And steeper. 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 an unusual -3 bps to 5.64% and now +14 bps above the 5.50% OCR. The Australian 10 year bond yield is up +8 bps from this time yesterday at 4.14%. The China 10 year bond rate is down -2 bps at 2.68%. And the NZ Government 10 year bond rate is up +8 bps from this time yesterday at 4.88%, and still higher than the earlier RBNZ fix which was up another +6 bps bps at 4.82%. The UST 10 year yield is also up another +6 bps from yesterday at 4.17% as the bond rout roll on.
EQUITIES WAVER
The S&P500 ended down -0.3% in Wall Street trade in their Thursday session ahead of the July non-farm payrolls report and fast-rising bond yields (that is, fast-falling bond prices). Tokyo has opened its Friday session little-changed. Hong Kong is up +0.8% in early trade. Shanghai is back yo +0.2%. The ASX200 is down -0.2% in afternoon trade but heading for a substantial -1.5% weekly retreat. The NZX50 is little-changed in late Friday trade heading for a -0.2% weekly dip.
GOLD STABLE
In early Asian trade, gold is at US$1935/oz and down only -US$1 from this time yesterday. It closed earlier in New York at US$1933/oz and earlier still in London at US$1936/oz
NZD HOLDS
The Kiwi dollar is little-changed at just on 60.9 USc. But it is down -80 bps in a week. Against the Aussie we are holding at 92.8 AUc. Against the euro we also holding at 55.6 euro cents. That means the TWI-5 is still at 69.7.
BITCOIN ESSENTIALLY ON HOLD
The bitcoin price is virtually unchanged from this time yesterday, now at US$29,157 and down a mere -0.2%. Volatility has been low at just over +/- 0.7%.
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64 Comments
More interestingly and this just blew my mind.
We are now in the 4th 'epoch' of Bitcoin. An epoch is defined by a 4-year period ending in the halving.
Now, thinking about BTC on exchanges:
Epoch 1 - Increased by 5 BTC per day
Epoch 2 - Increased by 768 per day
Epoch 3 - Increased by 1,428 per day
Epoch 4 (which we are in right now) - Decreasing by 642 per day
We are now in the 4th 'epoch' of Bitcoin. An epoch is defined by a 4-year period ending in the halving.
So it's basically a currency that's gone LARPing.
On the 20th day of the tabernacle, as the moon rounds it's new epoch, the Golden Goose will lay half as many eggs. And doth, the people will pay more for the existing eggs
On the 20th day of the tabernacle, as the moon rounds it's new epoch, the Golden Goose will lay half as many eggs. And doth, the people will pay more for the existing eggs
What it means is that more ratty is being moved off exchanges than ratty put on exchanges. The whole market structure has fundamentally changed.
Implies large amounts of luck. And should bring the current narrative into high suspicion, because the old 'certainties' did not come to pass.
I don't think you understand. Ratty was never designed to sit on exchanges, but it did as adoption progressed. As the market has evolved, more people are self custodying. That is exactly the intention of decentralization.
I understand what you are saying, you are missing my drift. The use case and mechanism keeps changing. That's not great, from an investment perspective.
As a use model, it's even worse. If someone told me I had to only deal in physical fiat, I'd tell them to take a jump.
For it to be a good bet for JC, it'll need to hit something like $500k per coin.
At that point, how much with Satoshi Pokemyhoshi be worth?
I guess maybe he can drag that many in, even at lower decimals. Blackrock seem to think so, and if they were a country they'd be the third wealthiest on earth. So, plenty of sway.
Fonterra's best bet is probably to disassociate themselves from anything to do with China, unless there is an obvious profit in any deal. Remember, this is the same business culture that they used, in tandem with Theo Speirings to try to send Fonterra broke. It cut a big hole in Fonterra's profitably for quite a few years. Luckily Fonterra showed a bit of sense and got rid of Theo pretty quick. Things have been pretty good for them since that millstone was dumped. I hope the present directors and management don't repeat the same mistakes that were made with trusting him and them!
I found this, looks like 40%ish by value...(I would have guessed more)
https://figure.nz/chart/HdSMOAyTNzvVTM7k
But other categories like cheese also have a growing market in China.
The mighty Chris Joye on "Why the Kiwis are thrashing Australia in economics". He obviously hasn't seen the Fonterra news yet.
While Australia and New Zealand have almost identical inflation problems, interest rate settings are radically different.
https://www.afr.com/wealth/personal-finance/why-the-kiwis-are-thrashing…
Rare credit to Orr, he had the stomach to do what was needed where as Lowe bottled it and was a melt. Sydney house prices +5.5% last quarter as well, still they are the Saudi of the West so maybe life really is easier over there?
Also, If Australia can't hike rates beyond 4.1%, what does that say about the amount of debt they have?
I actually agree, mistake lowering but a once in a 100 pandemic forecast (actually just a light flu) but has done hard yards pushing up...... we should never have locked down for such a lite death rate thing..... maybe 3-5% plus but we should never do this shite again
Cindy's mate Justin Trudeau said this week that affordable housing is not a “federal responsibility.”
However,
The Liberals’ 2015 campaign platform promised “affordable housing for Canadians.” “We have a plan to make housing more affordable for those who need it most – seniors, persons with disabilities, lower-income families, and Canadians working hard to join the middle class,” Trudeau said at the time.
https://nationalpost.com/opinion/justin-trudeau-housing-not-a-federal-r…
I feel like she was too obsessed with polling and the reaction of Hosking and ilk that she never pushed through the more radical changes she would have wanted. Hard to know if that was her or the party. Capital gains tax was an obvious example. I doubt she’s the terrible person that the likes of yourself like to portray her as.
Things were actually doing pretty well prior to Covid, house prices had stabilised, houses were being built, economy growing, etc.
Sean Plunkett being a cock, but will be of interest to possible Top voters.
https://theplatform.kiwi/podcasts/episode/top-leader-raf-manji-doesn-t-…
Shouting over Raf after the first half of the first sentence of each reply. Sounded like Sean wasn't getting the sound bites and reactions he wanted so just kept trying another angle.
Good to hear Raf just saying I don't want to be on the Platform so didn't answer the calls - no excuses.
He phoned me as I offered to be a candidate for TOP when Gareth started it and assume he drew the short straw. I had a really good yarn with him (yes, I told him I preferred a land tax to what they had then) and he seemed quite a nice agreeable fellow to be honest.
Ditto Raf from speaking with him at TOP 3.0 meetups.
7am call aside, I probably agree with Sean - TOP should take the opportunity to spread the message and educate Sean on current TOP policies which he clearly isn't up with the play on!
I wonder how this young property baron is doing. In 2022: 51 properties, $11m in mortgages. $9m in equity (45%). $1m in gross rental income.
- $11m P&I @ 30 year,
- 2.5% = $500k p.a.
- 5.5% = $750k p.a.
- Rates $3k each = $150k p.a.
- Insurance $100 p/m each = $60k p.a.
Net @ 5.5% mortgages = $40k - $50k? Tax bill $100k @ 50% deduction
https://www.nzherald.co.nz/nz/aucklander-jonathan-brownlee-owns-51-prop…
This is his current very basic website uploaded in August last year. https://getproperty.co.nz/
"Join my buyers list". He's a "Buyers Agent" now. I wonder if it's a front for property that he's trying to liquidate?
How altruistic, everyone in NZ may now replicate his success - we can save a fortune by scraping NZ super and might as well close down KiwiSaver too.
It would be interesting to know how this played out since it made the news initially, probably sold out and walked away with millions.
Plateau has a very unfortunate connotation in investing.
Economist Irving Fisher proclaimed, “stock prices have reached...what looks like a permanently high plateau." The boom ended in a cataclysmic bust. On Black Monday, October 28, 1929, the Dow declined nearly 13 percent.
Call time
One go of the things that happened today in our clean green NZ was a teenage killer walked free.
Hanara knifed the 40-year-old four times before he fell to the ground and was stomped and kicked by the group.
This person is now free in our society.
Something is wrong.
And being kind is not going to fix it.
Your vote counts
Exactly. If you asked these young, poor, racially disadvantaged youths if they'd skydive without a parachute or dive head first off a cliff they'd say no. Why is that? Because they know what the consequences are.
Maybe if these young people start seeing some real consequences dished out to their peers, then it might kick into life that logic portion of the brain that has been left to sit dormant.
People usually 'walk free' from jail after they have served time. Do you think it should be a one way gate?
If your going to give anyone a second chance, I think someone who commited a crime at 14yo would be high on the list. They need ongoing support though.
The victims family were apparently OK with the reduced sentence. Maybe they need to take into account the opinion of outrage electioneering commenters on unrelated forums?
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