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 today.
TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ reverted to 6.10% for its one year term deposit, ending its 6.25% 'special'. Also, see this.
MORE LISTINGS, MORE AUCTIONS, TOUGH SALES
Last week was the second busiest week of the year in the residential property auction rooms, but the sales rate dropped back to just 40%. And less than half sold at rating value or higher.
PERKING UP?
The latest RBNZ figures for October show first home buyers remain active in the market, while the long sleeping investors may just be showing signs of stirring.
MISLEADING
Medical Assurance Society has been ordered to pay a pecuniary penalty of $2.1 mln for making false and/or misleading representations to some customers.
RISK ON?
The VIX volatility measure has fallen to its lowest since January 2020, before the onset of the pandemic. The VIX is often referred to the 'fear gauge". (It is a popular measure of the American stock market's expectation of volatility based on S&P 500 index options.)
AND BRINGING UP THE REAR WAS ...
Kiwisaver funds under management reached $105.3 bln in September. This is up +$4.5 bln from June and up +$14.3 bln from a year ago. These rises are not impressive. They rose +$4.6 bln in the March 2019 quarter on a base of just $52 bln, so this latest increase is lame by comparison. Meanwhile the IRD reports that Kiwisaver contributions in the September quarter were $3.3 bln, so earnings for the quarter were only +$1.3 bln or +4.8% pa. Given you can get 6% in a six month term deposit (5.3% after tax for many contributors) you can see why the result should be considered lame. The NZ Super Fund managed +9.5% or double the KiwiSaver industry returns in the same period.
FUM WITHERS
Meanwhile, the total fund management sector saw funds exit, with FUM down -$3.2 bln as at September from June to $264.7 bln. It was first at this level in December 2021, but has struggled to grow since.
BANK DISCLOSURE DETAIL
The RBNZ has updated its Dashboard of bank data, and we have updated our Key Bank Metrics tool that runs off the same data. This is the basis of detailed comparisons between all retail banks. Analysis of this data will come later. It is a good basis to check market shares, for example.
USING LESS
In Australia, they are using less energy in their economy. In the household sector, continued growth in solar and wind production means that, for the first time, the output of electricity from these sectors in was greater than total household demand in the same period. (Although it was released today, this is data for the 2021/22 year.)
SWAPS RISE AGAIN
Wholesale swap rates have probably risen today across the curve. The real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is unchanged at 5.63% and now just +13 bps above the OCR. The Australian 10 year bond yield is down -1 bp from this morning to 4.59%. The China 10 year bond rate is also down -1 bp at 2.72%. But the NZ Government 10 year bond rate is up +6 bps at 5.15%, and the earlier RBNZ fixing was at 5.03% which was up +3 bps today. The UST 10 year yield is now at 4.50% and up +3 bps from this morning. The UST 2yr is now at 4.98% so that key curve inversion is unchanged at -48 bps.
EQUITIES BECALMED
The NZX50 is unchanged in Monday trade. The ASX200 is down -0.2% in early afternoon trade. Tokyo has opened unchanged. Hong Kong is up a mere +0.1% in its Monday opening. Shanghai is unchanged. Singapore is little-changed too. The S&P500 futures suggests that Wall Street will open tomorrow down -0.2%.
GOLD FIRM
In early Asian trade, gold is now at US$2008/oz and up +US$5 from this morning. If it closes tomorrow in New York at US$2010/oz or higher, it has a shot of a new all-time high (say the chartists). The all-time high was reached in August 2020 at US$2,075/oz
NZD LITTLE-CHANGED
The Kiwi dollar is little-changed from this morning, still at 60.8 USc. Against the Aussie we are at 92.4 AUc and also little-changed. Against the euro we have dipped to 55.5 euro cents. That means the TWI-5 is at 69.7 and marginally softer than this morning's open.
BITCOIN HOLDS
The bitcoin price has moved back up today, now at US$37,545 and up nearly +1.0% from where we opened this morning. Volatility over the past 24 hours has been low at just under +/- 0.9%.
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35 Comments
for the first time, the output of electricity from these sectors [wind and solar] was greater than total household demand in the same period.
Wow - amazing achievement. I suspect that results in large part from the focus of significant government incentives to households to take up solar.
I’m based in Auckland, we are going with Vital Solar. Have gone with Sunpower panels with Enphase micro inverters. My sparky mate was based in North America and swore by that set up vs one inverter.
Cam is the owner of the company and was the only one to come to our house when quoting, which gave me confidence. His web site is https://vitalsolar.co.nz/
Getting it wired up to accept a Stiebel Eltron heat pump hot water cylinder. Keen to get off gas, was on a meeting today and one large NZ company said they received a letter last week stating their gas price is going up 40% next year.
The same thing doesn't replicate everywhere. On average, Aussies get 50% more sun than us. So you'd have a situation where it's only sensible to install solar some places, but not others, with the ensuing public outcry.
We would get a far lesser ROI.
The other difference is Aussie is funding renewables, by extracting large amounts of non-renewables.
Its definitely not "50% on average", Sydney has 2400 hours sunshine a year, Auckland 2000. Melbourne 2100, Wellington about the same, Brisbane 2700, Chch 2000. Yes we get less sun than them, but that just means our panels don't lose their lifetime capacity as quickly, essentially they can be on the rooftop for longer before their power curve diminishes. And its always sensible to install solar in certain places but not others, thats the same with everything ever, its always better to do some things in some places but less so in others. Thats not an argument against doing the right thing for most people. Even in Aus its far better to put panels in certain places and not others, hence states have different rules.
Something up? Price moves quite sober today. And still off ATH in Kiwi pesos in Oct.
Sexy day for silver though.
Huge surge on silver prices in China today. Up almost 6% at one stage. Something might be up. A massive short squeeze would end this year quite nicely.
The latest RBNZ figures for October show first home buyers remain active in the market, while the long sleeping investors may just be showing signs of stirring.
Six per cent compound annual growth in the value of houses over the past 23 years versus 3% annual growth in average incomes has meant that household debt has had to increase from half to twice average disposable income, and from 40% of GDP to 120%. This is the most important single fact about the Australian economy. The large amount of housing debt Australians carry means that interest rates have a much greater impact on their lives, and this in turn affects inflation, wages, employment and economic growth. In the Australian economy, the price of houses is not everything but it’s almost everything, as the economist Paul Krugman once said of productivity. Link
Yes they will.
:)
The problem is global. This re electricity in Britain: https://consciousnessofsheep.co.uk/2022/12/01/can-we-reboot-britain/
Alarm bells going off among Team Biden all over a TikTok post about a ridiculous Maccas price order. This has gone viral very quickly and has even attracted the attention of WaPo (who seem desperate to protect the govt).
This is the kind of stuff that Cindy would have labelled 'misinformation'. However, even if this is fake, I think it shows that inflation has hurt or is still hurting people, despite what the ruling elite is claiming.
These stories soon reached the White House Office of Digital Strategy, which tracked the meme as one of many exaggerated examples of the nation’s economic woes, according to a White House official, speaking on the condition of anonymity to reflect internal discussions. In reality, inflation has been steadily subsiding, and last week the government reported price hikes had eased yet again in October. The average Big Mac nationally as of this summer cost $5.58, up from $4.89 — or roughly 70 cents — before Biden took office, according to an index maintained by the Economist. That’s up more than 10 percent, but it’s not $16.
https://www.washingtonpost.com/business/2023/11/24/bigmac-price-tiktok-…
Blackrock released an analysis in 2022 on the optimal BTC allocation.
This analysis shows that allocation would have ratty at 5x the total value of all equities, real estate, and bonds - 84.9% BTC and 15.1% everything else.
If total global wealth is approx $800T today, that would put ratty at $190 million per coin.
Perhaps they're trolling.
https://www.binance.com/en/feed/post/2023-07-25-according-to-a-2022-bla…
SMH is reporting this evening that ZhongZhi Enterprise group (China's largest Shadow Bank) is now likely to collapse. China is reporting the issue as a "poor management issue" but a number of foreigners are now saying its a contagion issue and its going to get worse much worse.
The challenge for NZ is whilst it might have limited effect on our banking systems - it would be highly unlikely to be contagious to western banks, it is likely to result in further economic woes for China which will translate to fewer exports for NZ. The unemployed eat rice and veg not dairy, lamb, beef and exotic fruits.
https://www.smh.com.au/business/banking-and-finance/alarm-bells-are-rin…
The challenge for NZ is whilst it might have limited effect on our banking systems - it would be highly unlikely to be contagious to western banks, it is likely to result in further economic woes for China which will translate to fewer exports for NZ. The unemployed eat rice and veg not dairy, lamb, beef and exotic fruits.
The extent to which it is contagious is a known unknown. The effects will likely affect tradfi. But we don't know the why, how, and when.
Agree about your point regarding discretionary consumption.
44% of Aussies experienced some form of financial hardship in Q3 2023. Last quarter was 43%.
Now up from 29% in early-2022 amid rising inflation and higher interest rates.
https://business.nab.com.au/nab-consumer-insights-survey-financial-hard…
U.S. DOJ has revealed that prosecutors may argue that CZ should be sentenced to 10 years in prison.
JP Morgan has been fined $39 Billion since 2000 and Jamie Dimon still has his job and not faced prosecution.
https://violationtracker.goodjobsfirst.org/parent/jpmorgan-chase
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