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
None here today either.
FOOD GOBBLES UP HOUSEHOLD BUDGETS
Worldline (Paymark) reported that consumer spending in August through all Core Retail merchants (excluding Hospitality)was up +5.2% on August 2022, and up +17.8% on the same month in 2019. Higher spending on food meant that generally all other categories were down on the prior year. But spending spiked by around +$10 mln in the last week of August across several merchant groups, compared to the same days in the previous week, in a pattern most likely related to Father’s Day (3 September) – a positive kick-off to the spring and summer months ahead.
RETIRING AT 43 NOT OUT
Public Service Commissioner Peter Hughes today announced he will retire on 29 February, 2024. He turned 65 in May after 43 years in the public service.
LABOUR MARKET GIVES ECONOMY HEFT
Total actual filled jobs in the June 2023 quarter were 2.3 million. This was up from 2.2 million in the June 2022 quarter a rise of +3.7% which is a fast and accelerating rise, no doubt due to strong immigration. In the same year total gross earnings were up +8.7%, a +$13.1 bln boost. Healthcare payrolls rose by $1.8 bln (+10%), professional and technical payrolls by +$1.6 bln (+10%, and manufacturing payrolls were up +$1.2 bln (+7%).
SALES UP BUT NOT FINISHED GOODS STOCKS
Although manufacturing sales rose strongly in the June quarter from March, they were actually only marginally higher than year-ago levels (+0.4%) on a sales basis. But factories are running down stocks and have been on a year-on-year basis now for five quarters which is something of an unusual trend. But it should make manufacturers more resilient if a downturn is ahead.
A FEW MAKING GAINS
In the wider economy, most sectors aren't doing too well, but the averages are held up by good gains in business services, transport, construction, and the arts sector.
SOLID RELIABLE REVENUE GROWTH
One sector with stellar revenue growth is the local authority sector. Their rates and regulatory income was up +8.0% in the June quarter from a year ago, a level it has been maintaining for two years now.
MORE POLITICAL POLICY RELEASED
TOP has released election policy on Local Government, National on Tourism. You can find them compared here.
ALL ABOVE 5%
More than $1.5 bln was bid for the three NZGB bond tenders today with $500 mln on offer. The $225 mln May 2030 tranche was last offered ten weeks ago where the yield was 4.50% But today it went for a 5.00% yield. A similar yield (5.01%) was achieved for the May 2032 $175 mln tranche, but that was little-changed from two weeks ago (4.97%). The final $100 mln with an April 2037 maturity achieved a 5.13% yield today.
AN 18 MONTH LOW
For most non-oil countries, an +$8 bln monthly trade surplus would be something to celebrate. But not for Australia. Their trade surplus declined to +AU8.0 bln in July from a downwardly revised AU$10.3 bln in June, below market forecasts of a +AY$10 bln gain. It was the smallest trade surplus since February 2022, as exports shrank while imports rose.
SWAPS ON HOLD
Wholesale swap rates were probably on hold today across the curve. But the real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is up +1 bp to 5.66%. The Australian 10 year bond yield is up another +1 bp at 4.17%. The China 10 year bond rate is up another +2 bps at 2.68% continuing its rise. The NZ Government 10 year bond rate is down -3 bps to 5.06%, and still above the earlier RBNZ fixing of 5.01% which was unchanged today. The UST 10 year yield is up +3 bps from this time yesterday, now at 4.29%.
EQUITIES ALL LOWER
The NZX50 is essentially unchanged near today's close. But the ASX200 is down a sharp -1.1% in afternoon trade. Tokyo has opened down a fractional -0.1% to start its Thursday trading. However Hong Kong is down -0.8% in early trade and Shanghai is down another -0.5% at its open. Wall Street ended its Wednesday session down -0.7%, uncertain about more rate hikes from the Fed.
GOLD SOFTER AGAIN
In early Asian trade, gold is at US$1919/oz and down another -US$6 from this time yesterday. Earlier it closed at US$1916/oz in New York, and earlier still in London it closed at US$1922/oz.
NZD MARGINALLY SOFTER
The Kiwi dollar has basically held at 58.7 USc from this time yesterday. Against the Aussie we are marginally softer 92.1 AUc. Against the euro we are also little-changed at 54.7 euro cents. The TWI-5 is now at 68.
BITCOIN IN TINY RETREAT
The bitcoin price is very little-changed from this time yesterday, now at US$25,755 down a mere -US$44 or -0.2%. Volatility over the past 24 hours has been modest at just on +/- 1.2%.
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40 Comments
Will the rest of the world start cutting their cash rates... Poland looks like they're the first https://www.reuters.com/markets/rates-bonds/polish-central-bank-stuns-w…
Useless they're sitting on a pile of dry powder, speculators are simply people with access to leverage and institutions able to loan currency into existence.
New Zealand's feudal-like-system has been entrenched under Labour, though that's what the poors voted for. When you have a government and a reserve bank that doubled house prices by walking in lockstep, what can you do?
Leverage a rental and pack it full of serfs I guess. It is what it is.
On the propadee laughs, this Reserve Bank of Property tweet on a humble abode selling for $7.8 mio in Sydney. Cracked me up.
Congratulations to the young family after securing at auction this dream entry-level home. New owners just have to pay the $477,000 stamp duty to the government and walk right in.
Indeed. On the run into the election that seems to be the play book of protecting bank profit and speculative asset investment. Interest rates should be 9-10%. Continue to burn the population (the many) or burn the speculative (the few).
Why is no one talking about it.....?
The Kiwi dollar has basically held at 58.7 USc from this time yesterday.
Low Kiwi and rising oil make me less comfortable about inflation. I only hope other inflation components are falling rapidly or this narrative of Reserve Bank controlled descent will be broken.
The drop in oil production is a pre-emption of a big drop off in demand for oil in the coming quarters - the likes of the Saudis are predicting global kaka happening. If you're still producing lots of oil when that happens, you end up losing money trying to store or offload it.
If they're right, the price of fuel should hover.
Ask the hapless Turks, what happens when you lower the OCR early......inflation rears up like an angry, underfed and pisst off Lion!!
With oil on a fervent march NORTH (High Oil makes everything more expensive!) and our kiwi peso smashing through the ladder rungs towards 50c......NZs inflation will flare up much, much higher. Its Guaranteed.
No wonder the NZ Govt is right now feverishly attempting to buttress the RBNZ with new capital/foreign exchange.....a spluttering defense of the NZD will be required, but will be ultimately useless.
Don't worry, a coming OCR of 8 or 9% will sort it.
Cue:
Leverage Monkeys butt clutching even more soo........and off crying for mummy, to give us poor specuvesters tax breaks.
Spec crowd is already blabbing to mommy about the lack of tax rinsing.
I agree raising the OCR the logical step for the RB but they seem blind as does the Aussies. Will Orr pump the OCR on the eve of the election, or continue to fiddle while inflation burns NZ?
Crispy popcorn, wait....is that smoke, wheres theres smoke there is fire....
Back in 2021 Warren Mosler , who is one of the main MMT proponents, suggested that Turkey lower its policy rate to 0 in order to reduce inflation and firm the lira...
https://twitter.com/wbmosler/status/1432432418988990469?s=20
This was when MMT was at the height of its popularity... The Green party wanted to bring a MMT expert to their annual conference.
Hindsight becomes a wonderful teacher !!
This stuff article back in 2020 discusses the promise of the "free lunch" that MMT will give for all.... Sounded so good at the time.!
https://www.stuff.co.nz/national/politics/122379921/a-kinder-greener-fa…
Article refers to Jeff Booth, hardcore Bitcoiner.
Proponents of tech deflation – mainly Silicon Valley entrepreneurs like Jeff Booth, author of The Price of Tomorrow – say galloping technology is going to undermine the cost of everything.
Artificial meat as good as real meat will be had for cents to the kilogram. Energy costs will tumble as everyone starts generating their own with solar panels and other green tech. The 3D printing revolution means instant manufacturing of anything on the spot.
Jfoe, I find ur comment kinda mischievous.
U disparage someone's comment as being misinformed, implying that you know....and offer nothing.
Debasement of money is the essential issue.. I'm my view.
And looking looking back thru history most inflations that lead to crisis are underwritten by the debasement of money.
https://fred.stlouisfed.org/graph/?g=18zAS
Dollarized debt only means U can't cheat ur way out of ur debt obligation by printing monopoly money.
The Big 4 grift across the Tassie is the outrageous grift that keeps on giving.
Disgraced consultancy PwC’s “Indigenous Consulting” arm — which has been given more than $44 million in Federal Government contracts — is owned by just two people other than PwC itself.
They include former Sydney financial adviser Gavin Brown, who owns 35 per cent of PwC’s Indigenous Consulting through his private company Validus Private Wealth.
It can further be revealed PwC’s Indigenous Consulting, which says it “works together with governments” to “close the gap”, has been given millions of dollars of contracts from the Northern Territory Government, in addition to $44.67m in Federal contracts.
https://theklaxon.com.au/ztem-62/
The Lux - why employ locals when you can get a cheap immigrant?
The working holiday visa changes would include lifting the upper age from 30 to 35 for all eligible countries; allowing people from eligible countries to apply for a second or third visa if they worked in areas with worker shortages; introducing a priority processing service to allow migrants and businesses fo fast-track applications; and scrapping the requirement for businesses to pay up to 95 percent of the median wage - which would allow sectors like tourism to pay a wage "that reflects their skills and experience".
Why do we have to employ local politicans? I'd prefer MPs with experience running a successful country - Norway, Switzerland, Denmark, Singapore or some of the many countries that have recently caught up or overtaken NZ's GDP per capita. They might be cheaper too.
When have we been ahead of any of those countries (excluding Singapore)?
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=NZ-CH-NO
Looking into it they've all been ahead of us for decades at this point.
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