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
No changes to report so far today.
TERM DEPOSIT/SAVINGS RATE CHANGES
Only General Finance raised term deposit rates today. The Cooperative Bank also raised TD rates and they have now joined others with a 6% one year rate.
DOWNTURN
Stats NZ says the volume of residential building work dropped -2% on a seasonally adjusted basis in the June quarter - but non-residential construction it rose +3.7% on the same basis. For residential construction work these are falls for a third consecutive quarter.
ANOTHER ETS FAILURE
The September ETS auction has failed - again. It is the third time in a row this has happened. Now, an entire year’s supply of carbon units will be offered in the year's final ETS auction, and will if it too fails, the NZUs offered will be erased. Just prior to this auction, NZUs were trading at $71. But at auction, bidders did not clear the minimum price and volume settings (which were not disclosed but were higher than last time, and will be higher again in December).
A 'WIN' BUT DON'T CELEBRATE YET
The CPTPP expert panel found in favour of New Zealand in its dispute with Canada over dairy sales in Canada, which the Government estimates cost exporters $120 mln over 3 years. Canada will probably drag out its compliance moves so it could be a long time before actual access is gained as promised by the CPTPP.
CASH USE DECLINES FURTHER
The Q3 RBNZ household cash use survey (H3) was out today revealing that only 42.8% of the population still use cash, the lowest since this quarterly survey began in September 2022. (This level is expected to rise seasonally in December.) But only 4.2% say they never use cash, and 36.6% say they haven't used it in the past seven days (which is a new series high). Less than 18% says they used cash more than twice in the past seven days, also a new low. This was almost 28% in June 2022, so the appetite for using cash regularly is falling fast.
MORE POLICY RELEASED
Today the National Party released policy on EV charging infrastructure.
THE AUSTRALIAN ECONOMY EXPANDS
In Australia, they released their Q2 GDP result and their economy expanded +0.4% from the March quarter, the same pace as an upwardly revised figure in Q1 but above market forecasts of a +0.3% growth. This was the seventh straight period of economic growth for them and came from better exports, business investment and public spending. Household consumption however contributed very little. For the year, their overall expansion was +2.1%. New Zealand's Q2-GDP will be released on Thursday, September 21, 2023. It will probably be marginally positive too.
PEAKING
And staying in Australia, their official estimates are that they will have a record grain harvest this year, and then it will fall next year as El Nino weather brings drier conditions. They are also forecasting a -14% fall in rural production values of AU$92 bln this year to AU$80 bln next year. (It is not exactly the same metric, but New Zealand agricultural exports will be NZ$56 bln this year, up +6% and also a record high, as a rough perspective.)
SWAPS FIRM & STEEPER
Wholesale swap rates were probably higher again today, especially at the long end. 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 to 5.65%. The Australian 10 year bond yield is up another +2 bps at 4.16%. The China 10 year bond rate is up another +4 bps at 2.66% continuing its rise. The NZ Government 10 year bond rate is back up another +6 bps to 5.09%, and still above the earlier RBNZ fixing of 5.01% which was up another +5 bps today. The UST 10 year yield is up +5 bps from this time yesterday, now at 4.26%.
EQUITIES ALL LOWER, EXCEPT TOKYO
The NZX50 is down -0.2% near today's close. The ASX200 is down -0.5% in afternoon trade. Tokyo has opened up +0.5% to start its Wednesday trading. Hong Kong is down -0.5% in early trade and Shanghai has its Wednesday down -0.4% at its open. Wall Street ended its Tuesday session down -0.4% in its first day back after their holiday.
GOLD SOFTER
In early Asian trade, gold is at US$1925/oz and down -US$10 from this time yesterday. Earlier it closed at US$1926/oz in New York, and earlier still in London it also closed at US$1926/oz.
NZD LOWER
The Kiwi dollar has retreated another -½c to 58.8 USc from this time yesterday. Against the Aussie we are marginally firmer 92.2 AUc. Against the euro we are little-changed at 54.8 euro cents. The TWI-5 is now at 68.1.
BITCOIN IN TINY GAIN
The bitcoin price is marginally higher from this time yesterday, now at US$25,799 and up a mere +US$68 or +0.3%. Volatility over the past 24 hours has been very low at just over +/- 0.5%.
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39 Comments
In Australia, they released their Q2 GDP result and their economy expanded +0.4% from the March quarter, the same pace as an upwardly revised figure in Q1 but above market forecasts of a +0.3% growth.
Aussie is now in a per capita GDP recession (last two quarterly reads of -0.3% and yoy -0.3%). This is why people are feeling the squeeze. Massive population growth in quarter on quarter data for population growth - strongest since 1974.
The Aussie ruling elite clown show is showing no sign of regret.
https://www.macrobusiness.com.au/2023/09/australia-plunges-into-per-cap…
Completely different situation, As a Project Manager you need to sit and work with your stakeholders..... I used to work in WGTN but live in AKL in 2005 , over 4 yers i got silver on quantas as used to fly up and down 1-2 times a week. on quantas/jetstar.... My entire familly says get to Sydney lets move... bit sad for NZ but i think NZs day in the sun maybe over...... I hope not as really want to stay but the horse breeding stuff lots way better in n northern NSW then here.
I am rolling over a six month $30K term deposit. Usually ask and usually get better than the advertised. Not this time. So 5.85%.
My bank person said. "... Currently we are firm on our 6 month rate. In the past we have had more discretion to offer a bit extra......"
So that's it this week. Next week who knows.
Worst current account deficit (compared to GDP) in the OECD.
NZ's current account now worst in the OECD and worse than the GFC - theFacts.
Whipping out a wad of Pacific Pesos isn't as impressive as it used to be.
We should start selotaping a sachet of milk powder to every $20 note to sweeten the deal.
Dollar "bull" isn't just threatening yuan-yen, the rupee has gotten weaker in recent weeks to hitting a new record low earlier today. After holding at the level around 82.75, you have to ask what has changed in recent weeks? Maybe ask China? https://buff.ly/3sHq4ab Link
In Australia, they released their Q2 GDP result and their economy expanded +0.4% from the March quarter, the same pace as an upwardly revised figure in Q1 but above market forecasts of a +0.3% growth.
Wow Going to be hard even for NZ to do worse than these Aus labour productivity data released this afternoon. Our data are due on the 20th Link
NZ in fiscal perspective: cross-country and across time
You might reasonably be a little sceptical about whether the cyclical adjustment effects are quite large enough (but New Zealand automatic stabilisers are not typically regarded as overly powerful), but these are the best estimates Treasury was giving us (and the government). There really isn’t much case for running cyclically-adjusted operating deficits (even OBEGAL deficits). It has the feel of borrowing to pay the grocery bill.
Does it get any more depressing? Ukrainians will become debt slaves to Western pension funds and Jamie Dimon's bonus.
My normie mate at the water cooler shrugged his shoulders and said "better than being slaves to Russia."
BlackRock, JPMorgan and McKinsey working on Ukraine reconstruction bank
Having been ravaged by war since the invasion of Russian troops in 2022, estimates suggest it will take Ukraine more than $400 billion to rebuild. To provide a solution for this huge funding gap, global asset manager BlackRock, banking giant JP Morgan and management consulting firm McKinsey & Company are working with the country to establish a "fund of reconstruction”, and attract billions more in private investment.
https://www.consultancy.eu/news/9070/blackrock-jpmorgan-and-mckinsey-wo…
Are you really that naive JC? https://www.amazon.com.au/Confessions-Economic-Hit-John-Perkins/dp/0452…
But Blackrock are going to save us from the "climate crisis"
It's not all DGM.
"Rolling Stones set to launch new album, Hackney Diamonds"
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