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
Westpac raised a number of key fixed home loan rates today, joining rivals ASB and ANZ. More here. ICBC also raised some rates.
TERM DEPOSIT/SAVINGS RATE CHANGES
Westpac raised a set of term deposit rates as well, mostly to levels others already had. However, they did raise their two year rate sharply to 6.00%. Meanwhile SBS Bank raised 1-9 month TD rates, catching up with its rivals.
MARGINS RISE ON HIGHER RATES
We will get the RBNZ Dashboard data update for the June quarter on Monday. But today we got the consolidated industry result for the Net Interest Margin. That came in at 2.38%, it highest since 2007. That is a +21 bps rise in a year. Interest expense to interest-bearing liabilities rose +269 bps in a year and interest income to interest-earning assets rose +247 bps. The Dashboard data will reveal the leaders and laggards by individual bank (but remember the Dashboard data covers 27 banks in total, more than just the ten main retail banks).
PAYING MORE FOR DEPOSITS
The proportion of interest expense for deposits to total interest expenses reached 67% this quarter, the highest percentage on record, the RBNZ noted.
NOT BOOKING SIGNIFICANTLY HIGHER STRESS IMPAIRMENTS
This same data revealed that impaired lending expense was 3.6% of operating income, and at that level it is below the long-run (30 year average) of 4.2%, although not below the ten year average of 2.9%.
SWAPS RISE
Wholesale swap rates were probably bounced back up today following following yesterday's drop, but the real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is down -1 bp at 5.63% and now +13 bps above the 5.50% OCR. The Australian 10 year bond yield is up +4 bps from this time yesterday to 4.16%. The China 10 year bond rate is holding low at 2.57%. And the NZ Government 10 year bond rate is also up +4 bps to 5.08%, but still higher than the earlier RBNZ fix which was up a mere +1 bp to 5.00%. The UST 10 year yield is at 4.26% and up +6 bps from this time yesterday. Remember it started the week at 4.25%.
EQUITIES MOSTLY LOWER
The NZX50 is down another -0.5% near the end of trade today and heading for a -1.5% weekly drop. The ASX200 is down -0.9% in afternoon trade, heading for a weekly loss of -0.4%. Tokyo has opened down a sharp -1.9% today and if it can hold that its weekly rise will be limited to +0.4%. Hong Kong is down -1.0% at their open and heading for a +1.3% weekly rise. Shanghai is down -0.5% at their open, and if that holds they will be down -1.0% for the week. Wall Street closed earlier with the S&P500 down -1.4% in Thursday trade.
GOLD SLIPS SLIGHTLY
In early Asian trade, gold is at US$1914/oz and down -US$6 from yesterday. It closed earlier in New York at US$1916/oz, and earlier still in London at US$1917/oz.
NZD SOFTENS
The Kiwi dollar is down -½c from yesterday, now at 59.2 USc. Against the Aussie we are up slightly at 92.3 AUc. Against the euro we are ever-so-slightly softer at 54.9 euro cents. That means the TWI-5 is down -40 bps at 68.3.
BITCOIN SLIPS
The bitcoin price is softish today, now at US$26,130 and down -1.1% from this time yesterday. Volatility has been modest at just over +/- 1.3%.
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41 Comments
".....The proportion of interest expense for deposits to total interest expenses reached 67% this quarter, the highest percentage on record, the RBNZ noted....."
The rise and rise of the saver.
And the fall and the fall of the spender? Especially the spender of self incurred debt. Been building for quite a while. Look out when the dam bursts I would say.
Hear hear Foxy. The drunken sailor is more important to the economy than the saver pretending he or she is getting a good deal on deposits.
Check out this Don Brash speech from when he was RBG. Wish Orr had read it. Rise of the saver indeed.
https://www.rbnz.govt.nz/-/media/0a17c50d54f049cc93d5558f0f4bf207.ashx?…
From 2019.
However Shipley and the other directors, who have combined $20 million of directors liability insurance, may not end up much out of pocket.
Documents from Richard Yan’s evidence at the trial suggest that had Mainzeal’s original $3.2 million loan to Richina been a share investment, it could now be worth $900 million. Shipley’s US$50,000 investment could be worth US$14.5 million ($22 million), on paper at least. And Yan’s Richina stake is possibly worth US$1 billion-plus.
https://www.newsroom.co.nz/shipley-must-pay-6m-to-mainzeal-creditors-co…
Extraordinary exposure of ill-qualification for anything of note I would suggest. A primary school teacher able to barge through the swamp to being a Prime Minster. Early on, David Lange in a classic put down should have given the electorate fair warning. And from a well merited loss to Helen Clark, a senior board position of a prime construction company. Based on what experience & expertise exactly? How are the weapons of war perished, and the mighty fallen. This is, in my opinion, a sad indictment of just how long our parliament has been talentless, lacking in acumen and calibre.
From memory she revelled in the attendance here of President Clinton and of course the Chinese Premier was hosted in a tightly controlled/cordoned event in Christchurch. Don’t believe infatuation came to the fore though, not from that particular President in any case.
In early Asian trade, gold is at US$1914/oz and down -US$6 from yesterday.
In Kiwi pesos, gold price is now flirting with its all-time high. $3,240. Charts looking quite sexy at the moment.
And zooming out on the 1,3, 5 year time frames, silver is steadily climbing - up close to 80-90%. Everyone around the water cooler is oblivious to this one.
Over the ditch,
Asking rents for units across the capital cities increased by 26.1% in the year to June, outpacing the 3.6% increase in the ABS wage price index during the same period.
The median asking rent for detached houses across the capitals increased by 11.5% last year, more than three times faster than wages.
Largely because of the mad immigration. This is nuts. For existing citizens and migrants.
https://www.macrobusiness.com.au/2023/08/diabolical-rent-hyperinflation…
Didn't we just bring a new Hastings and Invercargill?
https://www.interest.co.nz/economy/123643/more-14000-overseas-workers-a…
The U.S. has accumulated as much debt in the last 10 years as in the entire 100 years before that.
From 1923 - 2013: $16 trillion
From 2013 - 2023: $16 trillion
Henningsen: ‘Ramping-Up COVID Hysteria Again’
https://21stcenturywire.com/2023/08/25/henningsen-ramping-up-covid-hyst…
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