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
The Co-operative Bank has raised all fixed rates for terms 2 year and longer, but either +10 bps or +20 bps.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here today.
STILL HIGH, BUT DECREASING
Supplier cost increases from suppliers to supermarkets, continued in August 2023, but the pace of growth continues to slow on an annual basis. The Infometrics-Foodstuffs Grocery Supplier Cost Index reports a +6.6% increase from a year ago in what suppliers charged supermarkets for goods in August. That is down from a sticky +10%+ in each of the six months through March.
BNZ MUST KEEP GLORIAVALE ACCOUNTS OPEN FOR NOW
The High Court's Justice Helen Cull has told BNZ it must keep Gloriavale's bank accounts open until substantive claims relating to the bank's desire to terminate its relationship with the christian community can be heard. Gloriavale has been unable to find alternative banking services since BNZ gave notice of plans to terminate the relationship in July 2022. Friday's ruling from Justice Cull keeps an interim injunction in place preventing BNZ from closing the accounts, pending resolution of the claims at trial. There are 16 Gloriavale entities with 83 BNZ accounts. BNZ moved to terminate the relationship because of human rights breaches. Both parties accept there hasn't been a breach of the contract terms by Gloriavale. At trial Gloriavale plans to claim breach of contract, breach of fiduciary duty and estoppel by convention. Justice Cull says there's a serious question to be tried on at least the breach of contract cause of action, thus Gloriavale's accounts should remain open pending final resolution of the claim.
DEMAND FOR NZGBs HIGH
Secondary market transactions in NZGB's are rising. There was $32 bln transacted last week, high but not as high as the $36 bln in the week before. NZGBs were included in the World Index from Nov-22 and around that time weekly transaction levels rose to as much as $59 bln as portfolios rebalanced to include them. Since, these levels settled down a bit but have stayed higher than before they were to be included in the World Index. It is a global appetite that will help distribution and demand if the PREFU indicates more NZGBs need to be issued. (But it won't save them from higher yields if that is the global trend.) The PREFU will be released "shortly after 1pm tomorrow (Tuesday, September 12, 2023.
MORE PARTY POLICY UPDATES
We have updated our Political Party Policy comparison service today with new policies from: ACT, on Housing, and National on both Health, and Social Housing.
CURRENCY OFFENSE
Bloomberg is reporting that Beijing is in full currency manipulation mode. The People’s Bank of China’s daily fixing was stronger-than-expected by a record margin and state-owned lenders were seen actively selling dollars, "according to traders who asked not to be named".
SWAPS RISE
Wholesale swap rates were probably higher 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 unchanged at 5.66%. The Australian 10 year bond yield is up +5 bps to 4.17%. The China 10 year bond rate is little-changed at 2.69%. The NZ Government 10 year bond rate is up +7 bps to 5.07%, and still well above the earlier RBNZ fixing of 4.95% which was down -2 bps today. The UST 10 year yield is up +4 bps from this morning, now at 4.30%.
EQUITIES MOSTLY LOWER
The NZX50 is down -0.5% near today's close. The ASX200 is unchanged in early afternoon trade. Hong Kong is down -1.4% at its open, but Shanghai is up +0.5% (after Beijing leaned on its big insurers to 'buy'). Tokyo has opened its Monday trade down -0.3%. The S&P500 futures are actually quite positive, suggesting Wall Street may open more than +1% higher than Friday's close.
GOLD UP
In early Asian trade, gold is at US$1923/oz and up +US$4 from this time morning.
NZD IN MINOR RISE
The Kiwi dollar has risen to 59.1 USc, and up +30 bps from this morning. Against the Aussie we are little-changed at 92.2 AUc. Against the euro we are little-changed at 55.1 euro cents. The TWI-5 is now just over 68.7.
BITCOIN BECALMED
The bitcoin price is becalmed, now at US$25,705 and only +US$20 above where we opened this morning. Volatility over the past 24 hours has been low at just on +/- 0.8%.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
77 Comments
Maccy B on the great Aussie migration sham. As usual, cutting through all the woke BS and exposing it for what it is. No doubt the corruption will be rampant at the lower levels of public service power. And while it seems sensational, when the Minister for Immigration is hosting migration agents for dinner at $1,000 a pop, it is understandable that the common folk scratch their heads and the ruling elite do have no idea of perception.
Leith van Onselen is more direct.
It is worth remembering that in November 2022, Indian migration agents paid $1,000 to attend a dinner with Andrew Giles where they raised concerns about visa policies:
Giles and Labor have clearly kowtowed to their demands, throwing open the visa floodgates and throwing Australian renters onto the streets.
What a pack of lying sell-outs.
https://www.macrobusiness.com.au/2023/09/albanese-government-proud-of-r…
"BNZ moved to terminate the relationship because of human rights breaches".
I see their point however I'm struggling a bit with this because where does it go next / end ? We've recently seen Trudeau invoke emergency powers to cancel banking facilities to striking truckers & Coutts cancel (& subsequently back down after widespread outrage) Farages banking in the UK because of his political views. Globally banks fund banking for all sorts of organisations human rights abuses Are Swiss banks still hoarding Nazi gold? (telegraph.co.uk)
Originally reported however that was proven to be incorrect:
https://www.bbc.com/news/entertainment-arts-66288464
https://www.bbc.com/news/business-66274359
My comment was about banks canceling people for their political views, which in Farage's case eventually proved to be the true reason as outlined in the links.
The original reporting of the threshold was disingenuous; Farage had been below that for many years previously without any problems or bank questions.
Its in the link articles
It is an unhappy feature of New Zealand news media, and the quidnuncs who work for them, that 'outing' strange little sects, and stirring up society against them, has become something of a pastime. For the past few years the focus has been on Gloriavale, though I notice RNZ has lately become excited by Jehovah's Witnesses. Before Gloriavale there was Destiny, and the various Pentecostal sects that David Farrier obsesses over. Go back further and it's the Exclusive Brethren. Further still and it's Moonies and Mormons and Scientologists and Hare Krishna.
Gloriavale banked with the BNZ for 40 years, and in all that time never accepted even one cent in interest for religious reasons, which was great for the BNZ, which had the free use of Gloriavale money. Suddenly, after bad publicity, Gloriavale gets a Bugger Off letter from the BNZ, and is refused service by every other bank. This is a fundamental deprivation of civil rights. How can any organisation (apart from the Mongrel Mob) exist cash-only in the modern world? The court is right to order the BNZ to continue its service.
A past example of expulsion by a bank pandering to public sentiment was the reviled Synlait worker Lee Williams, whose bank account was closed when he solicited funds in his defence campaign.
https://www.fsu.nz/lee_williams_westpac_did_what#:~:text=But%20neverthe….
There have been significant moves in Britain against banks that curry favour with the public by abruptly closing the accounts of people who offend the public with their behaviour or their expressed opinions. Banks ought not to be moral arbiters disciplining sinners for their waywardness: they should confine themselves to being banks.
https://www.reuters.com/world/uk/uk-investigates-bank-blacklisting-peop…
https://www.reuters.com/business/finance/banks-tread-tricky-tightrope-w…
Were there any lies told about those organizations? To my eye the media did a public service in each recent instance, outing the heinous behavior within.
Gloriavale genuinely has children working full time, the Jovie's closed ranks on child sex offenders. How on earth do you see these being exposed as an 'unhappy feature'???
While I find those groups despicable it does worry me because we are cutting perilously close to limiting religious freedom.
I once read a book about a chap who grew up in an Amish community where it is customary to leave school once you are literate and can perform basic mathematics (making their education slightly better than New Zealand state education?) He said that leaving school and going to work was actually when he felt happiest in the community, he became well respected as a reliable worker and a contributing member of the community.
Most people who grew up in a rural community would have been asked to help at harvest, fix fences or take on all manner of other menial chores. Is it child labour? Probably technically. Is it bad for children to learn new skills, develop a sense of belonging to a community or earn the respect of their peers? Probably not. There is a spectrum and just because something isn't common in society doesn't make it wrong.
Bringing theFacts to all New Zealanders | theFacts.nz
"Feelings, opinions, and untested ideas are essential ingredients for human invention, resolution, and evolution, but they rarely get us on the all-important same 1st page.
Only by confronting the facts/stats/trends/truth/proof/evidence/history on an issue, without fear or favour, and with an open mind, can opposing views start to share some common ground.
And only once we both a) understand and b) stand together on issues, can we work together to improve them for the greater good of all of us – people and the planet.
This is what we believe, and why we exist."
The People’s Bank of China’s daily fixing was stronger-than-expected by a record margin and state-owned lenders were seen actively selling dollars, "according to traders who asked not to be named".
The ONLY Stock Market I watch (Secrets Revealed)
Hong Kong's Hang Seng stock index correlates with quite a lot of Euro$ money indications beginning with China's yuan. Also others you might not expect such as US$ IRS swap spreads (esp. 30s) and UST yield curve spreads like the 2s10s. Hang Seng is a connection between money and economy as it relates to much of Asia. China is a mess and the latest data from Japan is a true disaster, so no wonder Hang Seng having trouble hanging in. But that means a lot more than Asia.
Nothing to see here. We hope.
US House panel plans Taiwan war game with Wall Street executives
Committee was formed to focus on potential threats from the Chinese Communist party
The US House of Representatives China committee plans to hold a Taiwan war game with financial and business executives in New York on Monday, in an effort to raise awareness about the risks attached to Americans investing in China.
https://www.ft.com/content/53fd65a6-31ac-40f9-9201-ae9f15257f9f
Couple of emails in the inbox today re: Kiwibuild developments cutting their asking prices for the second time. No surprise.
Even 699k (original price was 750k, then 725k, then 699) is too much for a 2 bedroom shoe box in Glen Eden.
Might start shifting a few at 600k….
Kiwibuild has to be one of Labour’s top 3 debacles.
The question is why aren't investors buying them, as they should also get interest deductibility on their mortgages due to them being new builds? Or do most investors actually buy for the future capital gain on the land, which they often get on older properties, especially if they can be subdivided. But if that is that case, why don't investors pay pay tax on the capital gains and if they are not paying CGT , are they really paying their fair share of tax?
As The Comb says Investors are not active in the Market...... they cannot make cap gains from these levels at these interest rates.... its over red rover.... Hence the constant FHB spruiking, but they cannot afford either..... at these rates and deposit levels.... So we are left with those who have equity trading in the mid levels ie 1.2 mil to 1.7mil, most transactions do not require much borrowing (Hence the REALLY BAD mortgage growth numbers). Its bad and the spruikers know it is.... and here come the listings.... at leat the mud will be dry with El Nino in Auckland this summer.... I see a big surge in listings but not a big surge in sales.
Meanwhile the Investors are not active in the Market
The Comb, in his capacity as an independent economist, is appearing soon at a ray white property evening:
We would like to invite you to join us for an evening of insight and conversation with one of the industry's best economists - Tony Alexander.
Tony will talk about real estate resilience, factors fuelling buyer interest through to 2024, Auckland's potential for out-performance, and the outlook of interest rates.
Talking of shares, the 3 Ozzie and 1 US uranium miners I own have been surging in value since around May, after maybe 6 months of slow slide
I get this kind of chest beating at my local water cooler. Stump up with the names of the companies or stock codes for validation.
Spot Price up https://numerco.com/NSet/aCNSet.html?reload=true
I have several shareholdings in OZ and US. Playing the long game.
https://www.newshub.co.nz/home/politics/2023/09/newshub-reid-research-p…
National now over 40%, Luxon & Chippie = Preferred PM
Say it again because the proof of it is right here as only one example. The electorate will prioritise, before anything else, that this shambolic Labour government is removed from power and voting for National, warts and all, is the most straightforward guarantee of that on offer. That sentiment is ably demonstrated here by the swing from ACT as soon as their leader started straying into the amazing irrelevancy of supposed endorsements of long dead global personalities and simultaneously revealing a unforgivably slack selection process for their candidates.
My main concern is that if it is too much of a rout,the Nats will confuse that with thinking everyone agrees with all their policies,rather than the 'anyone but Labour' vote,hence the need to keep the blowtorch on anyone likely to run the country,too big a majority leads to complacency and weak opposition...
True but vman echoes posts I was often making on here during the last half of the Key/English government opining that in creating “Corporate New Zealand” that Blue Suit Brigade National government had become conceited, complacent and careless. A lot of that was because as an opposition Labour were weak and ineffectual. In fact that eventually, ironically gave National enough rope to hang themselves. In my experience weak opposition in parliament unfortunately is a catalyst for poor government.
Propaganda at best. Such a shame the focus of this election is Labour instead of the opposition as there seems to be zero critical thinking here. Moon walking off a cliff.
Our only hope is National is as useless with numbers as they appear to be and can’t keep their promise of sharp recession and asset price destruction. Sorry, “spending cuts”.
Must admit Luxon left Jack tame speechless when he told him his (correct) numbers were wrong.
Basically National will win by default, as governments in NZ lose elections, rather than there being any good alternative. The only question is if he needs Winnie or not. But the fact that he is allowing rich Gold Card holders to still get free prescriptions, without restricting it to those with a community services card, IMO shows that he is trying keep Winnie on side. Plus the fact that they haven't ruled out NZF. Winnies new idea is naming Air NZ , Air Aotearoa, which isn't bad, except it kills the overseas brand recognition Air NZ has spent year building.
This has been labours worst year IMO. The first 5 years they had excuses to not deliver: NZF and Covid. But this year it’s like they haven’t even tried, it’s all been about the cost of living, they have forgotten all about transformation and making NZ better, it’s all so negative.
They caused this crisis by their constant minimum wage increases and BS Gov spending...... They where crap from day 1, 100,000 homes yeah nah, light rail in Auckland yeah nah, Auckland cycle bridge yeah nah.... they are USELESS, Labour used to be about people who worked and where unionised, now they seem to be about the unemployed, and those in emergency housing, they have lost focus and need to be slapped hard by there core supporters, IE those who work!, Greens can stand for the unemployable... Labour need to move away from there Maori cabinet, 15 MPs who will not help save them, where is Mahuta..... crickets NO ONE is believing there lets not mention CO GOVERNANCE BS
Most divisive Gov in living memory
Blimey that’s a bit naive I would say. What exactly did WP/NZF prevent Labour from doing in the first three years that they couldn’t do in the next three then. In fact might it not be more pertinent to conclude that what Labour, with unbridled power, did do in the last three years is the very reason what they are looking likely to be kicked out.
The first 2 of those Labour has been crap at, correct. The next two however... at least with climate change they started to address the issues. EVs now feature in our most popular bought cars, Labour has created a clear pathway for our biggest emitter into the ETS, they have led with a lot of subsidies for big business to clean up their act. I suspect though most of it was the Greens. There's also a LOT of cycleways going in all around the country. Since it takes so long to plan and deliver any infrastructure in this country, half of the game changer cycleways will be delivered years away, but they did start them, credit where its due.
Labour has absolutely nothing to do with EVs being bought - EVs are quickly gaining popularity all around the world. Tesla is the number one car seller globally, without consumer subsidies being handed out. It would still be the number one best seller in NZ if National had been in government, its simply the way the world is moving.
https://www.greencars.com/news/the-tesla-model-y-is-the-best-selling-ca…
And last I checked, EVs still require roads to drive them on, not cycle lanes. And those roads are a disaster.
Well that didn't age well Jacinda.
New Zealand now has more deaths per capita than Australia.
https://www.worldometers.info/coronavirus/
Labours' policies were only ever going to reduce fatalities at the start of the pandemic. It was obvious to me that at some point they were going to have to open up, and the death toll would climb.
The media who were frothing at the bit over one death now don't care about nearly 5000 deaths.
Whatever, let’s not forget the deaths from the lockdown, and the ones that will still be occurring as a result of the lockdowns (suicide), as a result of businesses closing, loneliness etc etc. To claim Labour saved lives is purely propaganda. The truth is we do not know what would have happened had it played out differently.
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.