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
TSB has shifted its one year rate up from 6.99% to 7.14% today, +15 bps. UnityMoney raised its 6 month fixed rate.
TERM DEPOSIT/SAVINGS RATE CHANGES
UnityMoney raised some TD rates nine months and less, but cut its 1 year rate. The Police Credit Union has trimmed rates too.
RENTS INFLATIONARY
The national median housing rent hit $600 per week, across all type of dwellings, in the first quarter this year, up +$35 or +6.2% Auckland rents were up by $50 a week. More here.
CROWD WISDOM?
A survey for the RBNZ reveals that consumer guesses still see inflation running much higher than the CPI. The survey median is currently +6.0% and the average +7.9%. (But I bet no-one in this survey actually did any calculations.) The March CPI was 4.0% (which is an accurate, consistent calculation). These same respondents see inflation falling to 4.0% in one year (median), 3.0% in two years, and 5 years hence. The same group see house prices unchanged in a year (median), rising to 8% in five years,
STILL WORKING THROUGH THE ISSUES
The Commerce Commission has extended its consideration of the Foodstuffs merger application. A decision from the Commission, whether to clear the application or issue a Statement of Unresolved Issues, is now due on Friday, June 21, 2024.
NOT SOMETHING YOU SEE ON THE NZX50 EVERYDAY - BASICS UP, BLING DOWN
Just note, on May 15, the Fonterra FCG share price was $2.38. After its big announcement, it has risen to $3.04 today. That's a +27.7% jump. It is back to the level it fell from when they reduced their milk price forecast on August 18, 2023, and when markets assumed there were internal earnings pressures in the cooperative. (MHJ however has been hit hard today, shedding almost -20%.)
NO ISSUE OF PDS
The FMA has filed civil proceedings against Rangi Wyatt Stephen Savage for making an unregulated public offer for the sale of shares in The Powder Shed Tokoroa. More than 160 investors applied to purchase shares in Powder Shed. Approximately 65,000 shares in the company were sold and issued to investors at USD$1.20 per share. Investors paid in USD and in cryptocurrency. The total amount obtained equates to approximately NZ$122,000.
CONSUMER DATA RIGHT LEGISLATION INTRODUCED
Commerce and Consumer Affairs Minister Andrew Bayly has introduced the Customer and Product Data Bill to Parliament. This is New Zealand's consumer data right legislation, which aims to establish an economy-wide framework to enable greater access to, and sharing of, customer and product data between businesses, initially assisting with the development of open banking.
ALL CHANGE AT KAINGA ORA
The Mark Gosche-led Kāinga Ora board has now been replaced by a Simon Moutter-led board, running the 70,000 dwelling inventory worth over $45 bln. The new government 'refresh' is seeking much 'better performance' for the country's state-owned landlord after the Bill English review: "We were alarmed to learn, for example, that in the May 2023 board budget pack, there was no Statement of Financial Position, the budget assumed that new lending of several billion dollars from the Government would be approved, the build pipeline included a line entitled “Zero Net Growth” describing disposals of an indeterminate kind of over 3,000 homes per year, and did not provide a budget scenario where Kāinga Ora is limited to the funding agreed by the Government."
NO SHIFT ON THESE KEY RATES
The Chinese central bank left both its 1- and 5-year rates unchanged in their monthly review today, still at 3.45% and 3.95% respectively. The one year benchmark has been unchanged for nine consecutive months now, the five year benchmark for three. These 'holds' come amid a flurry of other loosening activity, targeted at reviving their property markets and saving the remaining large property developers.
SWAP RATES HOLD
Wholesale swap rates are likely to be little-changed today, perhaps marginally firmer. Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 5.61%, a level it has hovered around for more than 70+ days. But this is actually its lowest in exactly one year. The Australian 10 year bond yield is down -2 bps to 4.27% from this morning. The China 10 year bond rate is now at 2.32% and unchanged. The NZ Government 10 year bond rate is up +1 bp to 4.67% from this morning and the earlier RBNZ fix was at 4.62% and up +1 bp from Friday. The UST 10yr yield is up +5 bps from yesterday at 4.37%. Their 2yr is now at 4.78%, so the curve has shifted out marginally to -41 bps inverted.
EQUITY MARKETS SIGNAL MORE GAINS
The NZX50 has started the week up a minor +0.1% (see above). The ASX200 is up +0.6% in afternoon trade. Tokyo has opened its Monday trade up a strong +1.4%. Hong Kong has opened up +0.6% and Shanghai is up +0.4% at its open. Singapore has opened unchanged. Wall Street looks like it might open higher tomorrow as well with the S&P500 futures currently +0.6% above its Friday close.
OIL SLIGHTLY FIRMER
The oil price is +50 USc higher from this morning, now just under US$80/bbl in the US, while now also now at just on US$84/bbl for the international Brent price.
GOLD RISES AGAIN
In early Asian trade, gold has risen +US$17 from where we opened this morning and up at US$2432/oz to new record high levels. Silver is up strongly too, to ten year highs.
NZD ON HOLD
The Kiwi dollar has is unchanged from this morning's open, still at 61.3 USc and holding its recent gains. Against the Aussie we are slightly softer at 91.5 AUc. Against the euro we are also marginally softer at 56.4 euro cents. This all means the TWI-5 is still basically at 70.4.
BITCOIN UNCHANGED
The bitcoin price has also basically not moved either today since this morning, still at US$66,607 and a very minor -0.2% slip from this morning's open. Volatility of the past 24 hours has been modest at +/- 1.3%.
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55 Comments
I can see another wave of inflation coming up in my business.
Also looking for commercial spaces, very low vacancy rates and very high purchase prices.
I feel like we really need to get this ocr up to calm this down even though vested interest would say otherwise.
forgot to mention NXZ so weak that it is a killer purchase anything in other curency.
Exactly the bind. We import Oil. Which is the economy.
So you either import a certain level of inflation (based around US$ hegemony) OR you lift your OCR and import less inflation (through a stronger NZdollar).
Thats how the game works.
But as a distant backwater which has become an economy based around easy credit and Ponzi housing, you will pay for your largese.
KO chickens...roost...
https://www.newshub.co.nz/home/politics/2024/05/bombshell-k-inga-ora-re…
Dig .hole...
It is no surprise, then, that senior National figures like Nicola Willis have admitted the party sold too many state houses. Her colleague Chris Bishop even told RNZ that National would “build enough state and social housing” to clear the state-house waiting list – a startling claim given that the list currently sits at 24,717, but one to which he will no doubt be held if his party wins power.
How much did the asset side of their balance sheet grow? I can't believe we are throwing around gross debt figures for an organisation that owns tens of thousands of houses, huge amounts of land, and a rock solid future income stream! What's going on (do you think)?
this explains some of it ...
https://www.newstalkzb.co.nz/on-air/mike-hosking-breakfast/audio/chris-…
"
The Housing Minister's asking questions of Kainga Ora over revelations the Dunedin holiday park it owns has sat empty for four years. The Crown housing agency bought Aaron Lodge in Kaikorai Valley for more than $4 million, intended to become a social housing development.
But it's remained vacant, covered in weeds and temporary fencing. "
They've been stitched up to be fair. They were told to do whatever it takes to get houses built. So they acquired land etc and ran up some debt. All perfectly normal for a major expansion. Then the new Govt came in and admonished them? For what? Having $40bn in assets, $20bn in debts, and an increasingly decent delivery record and pipeline of houses?
Just have to look at the Kainga Ora Facebook page, making progress with announcements every few days. Seems to be rolling out some reasonable numbers. https://www.facebook.com/kaingaoragovtnz
But I can imagine the scoffs and snarls at the idea some "lazy beneficiaries" get a brand new home to trash courtesy of the taxpayer.
I do agree with you. If only we could put hard working taxpayers into these brand new houses, for which they'd a) pay market rent for and b) look after. Put the beneficiaries into the properties the aforementioned taxpayers move out of, and subsidize their rent accordingly.
But my comment was not about who gets a new house, it's the fact that houses are being built by KO.
Kāinga Ora is one of New Zealand's largest providers of housing, owning and maintaining almost 69,000 properties housing approximately 200,000 people. It estimates the assets it is responsible for to be worth around 40 Billion dollars. It also maintains a focus on urban development, having delivered approximately 7,000 homes since its formation, and plans to deliver a further 40,000 in coming years
It's delivered 7,000 homes and plans to deliver another 40,000. Which means it has been tasked with almost doubling the housing supply. Not sure how you do that without taking on debt.
How much debt have private citizens taken on in the last 10 years to pay for houses that have existed for 20+ years? According to RBNZ C32 existing lending increased from $206b in 2015 to $354b in March 2024.
Not quite 10 years because the data aint go that far back, but was that extra $148b really necessary? Doesn't include the debt that was paid down either. But that's good debt isn't it? Government debt = bad debt, but debt issued by Australian owned retail banks is good debt.
It also pushed the agency to strengthen its approach to recoup rent from tenants who are in arrears, including evicting tenants who continue to fail to pay rent. The Government said the total debt owed increased from $1 million to $21 million between 2017 and 2023.
Labour's "Be kind" motto not working too well then...
It's very kind of you that you care so much about my motel Baywatch. Regular guests and tradies have slowed down markedly over the last two weeks, as you would know. So no, we don't have the NO vacancy sign on anymore. In these times it's especially good for us to host some guests from WINZ, but I would never put all my eggs in one basket and have more than 50% of WINZ guests, usually about 33% only, in a separate building.
This is wild. Japanese agricultural lender Norinchukin Bank is considering raising USD7.7 billion in capital for unrealized losses from declining value of overseas bond holdings. This is the bank for Japan's agricultural co-op that has been instrumental in keeping prices low for Japanese consumers.
Now it gets even more wild. Norinchukin was added to the Fed's Standing Repo Facility for emergency liquidity last year. That's right. The Federal Reserve is essentially bailing out foreign banks.
My water cooler crew just yawned. In their minds, it's a nothing burger. Warriors win far more of a hot topic.
https://asia.nikkei.com/Business/Finance/Japan-s-Norinchukin-Bank-eyes-…
Alan Kohler (legend) dissects the Aussie Ponzi. In a nutshell, he describes how the Ponzi was heavily manipulated from mid-2005 to 2015 by suppressing the price of money. I would argue that it goes further back but anyway. He reckons that the migration insanity is a Hail Mary response to Covid - essentially to protect the Ponzi regardless if it screws the wider socio-economic environment.
https://www.thenewdaily.com.au/finance/2024/05/20/alan-kohler-housing-a…
After spending years advocating lower immigration when the Coalition was in power, Kohler now argues that lowering immigration would destroy the economy, drive up inflation (ignoring that inflation is currently being driven in part by record immigration – see rents), lead to lower housing construction (because a vested interest developer says so), and would lead to acute labour shortages (even though decades of record immigration has delivered said shortages).
https://www.macrobusiness.com.au/2024/05/alan-kohler-flip-flops-on-immigration/
https://www.stuff.co.nz/nz-news/350283601/pharmacist-faulted-not-warnin…
Why would they have? If you cast your mind back it was safe & effective, safe & effective, safe & effective, safe & effective, safe & effective ... ad nauseseum on every bit of media we have.
"“In light of significant mitigating factors, it would be disproportionately harsh to find the pharmacy in breach of the Code, and that an educational approach was more appropriate,” the Commissioner said."
Hmmm.
A very high price to pay for educating some uneducated experts.
Don't forget, two shots to do the deed!
In all seriousness, the harassment was absurd.
But then so many people seemed so genuinely terrified that they might have to exist in the same atmosphere as one of the dreaded plague rats (of which I wasn't one, I would like to add) until such time as the news told them to stop throwing their toys out of the cot, and then they were happy again.
I'm somewhat flabbergasted to be honest that there's been so much as a report in the news media that there might have been negative side effects in some rare cases. Even privately harbouring that opinion at the peak of the hysteria was tantamount to social suicide if people found out.
Yet there was enough evidence (eventually) that myocarditis was not a rare side effect for certain group of people (mainly young men 18 - 25), and in this case the vaccine was as equal a risk as Covid itself.
https://jamanetwork.com/journals/jama/fullarticle/2788346
https://journals.sagepub.com/doi/10.1177/20420986241226566
Both studies acknowledge that underreporting is most likely suggesting that myocarditis is not as rare a side effect as is being said.
https://www.psu.edu/news/research/story/myocarditis-seven-times-more-li…
The Penn State team conducted the largest study to date on the risk of developing myocarditis as a result of having the coronavirus vs. experiencing inflammation following COVID-19 vaccination. The researchers compared patients with COVID-19 — vaccinated and unvaccinated — to those without the virus. They found the risk of myocarditis was 15 times higher in COVID-19 patients, regardless of vaccination status, compared to individuals who did not contract the virus.
Next, the researchers separately compared the rates of myocarditis in those who received the vaccines to those in unvaccinated individuals. According to the findings, the rates of myocarditis in people who were vaccinated against COVID-19 were only twofold higher than in unvaccinated people.
https://www.yahoo.com/news/more-one-four-had-mrna-171724613.html?guccou…
You might want to familiarize yourself with how vaccinations work, in particular "efficacy".
MMR for example is 88% efficacy after 2 doses.
The mumps component of the MMR vaccine is about 88% (range: 32-95%) effective when a person gets two doses; one dose is about 78% (range: 49%−92%) effective. Children may also get MMRV vaccine, which protects against measles, mumps, rubella, and varicella (chickenpox).
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