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 again today.
TERM DEPOSIT/SAVINGS RATE CHANGES
SBS Bank raised its one year rate by +10 bps to 6.05%.
ON THE BRINK
Valuation agency QV says house prices are teetering on the brink, as average values start to slide. Buyers are "spoilt for choice" with nothing suggesting house prices will take off again soon.
LOW PRESSURE ON FOOD PRICES, FINALLY
Statistics New Zealand says food prices have had their smallest increase since September 2018. Food prices rose +0.2% in the 12 months to May, with the lower food price inflation driven by cheaper prices for fruit, vegetable, meat, poultry, and fish. Fruit and vegetables prices were down -11% and meat, poultry, and fish prices were down -1.2%.
SOME OTHER KEY PRICES EASED TOO
Stats NZ data also shows that rent pressures are easing. Meanwhile fuel costs fell in May from April but were up +17% from a year ago, in part because the Government cancelled its relief package, and the NZD weakened.
GRIMMER
The May factory PMI moved into a deeper contraction, mainly because order flows are drying up. That is now 15 months of continuous contraction. This will test the resilience of employment levels, to be sure. Auckland and Otago are the toughest, Wellington and Canterbury are still expanding.
SERVICES DOWN
Eyes are on buy-now-pay-later service Laybuy, who are 'down' at the moment.
BTR GETS MOMENTUM IN AUCKLAND
The Build to Rent (BTR) sector is getting some momentum. The recently completed Kiwi Property project at Sylvia Park, Auckland, added 295 units, where rents seem to average $800/week for tenants. (Gross rent for that project before vacancies will be more than $10 mln/year.) More than 90% of all projects completed, in construction, or planned, will be in Auckland, according to Property Council data.
| BTR units | Under | Plan | Facility | |
| Completed | construction | pipeline | number | |
| # | # | # | # | |
| Auckland | 1153 | 714 | 3331 | 47 |
| Waikato | 69 | 0 | 0 | 3 |
| BOP | 0 | 0 | 45 | 1 |
| Wellington | 126 | 108 | 0 | 3 |
| Canterbury | 59 | 0 | 0 | 2 |
| Otago | 42 | 0 | 0 | 1 |
| ------ | ------ | ------ | ------ | |
| National | 1449 | 822 | 3376 | 57 |
'PROPORTIONATE TO THE RISKS'
Business groups are cheering a review of the role of health & safety regulations (and the industry that sprung up around them, especially for lawyers). Others aren't so sure. It is another area where the pendulum seems to have swung too far away from principled regulation where this started, towards prescriptive regulation (a la the UK and Australia) as offshore 'experts' were brought in to run our agencies.
GREEN POWER MOMENTUM ON THE FARM
New Zealand Green Investment Finance’s investment in Waikato-based Rural Energy is helping accelerate the uptake of solar electricity generation on farms. The $10 mln investment is to finance ‘solar as a service’ power purchase agreements for dairy farms. Almost 200 are already operating with this service in the Waikato region.
LOW PAY, BUT IMMENSE POWER
This is interesting.
SWAP RATES SOFT
Wholesale swap rates are likely to be easing again today on global influences, but only marginally. 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 almost 90 days. The Australian 10 year bond yield is down -5 bps from yesterday at 4.20%. The China 10 year bond rate is still at 2.31%. The NZ Government 10 year bond rate is down -7 bps at 4.68% from yesterday and the earlier RBNZ fix was at 4.62% and down -6 bps from yesterday. The UST 10yr yield is unchanged from yesterday at 4.26%. Their 2yr is now at 4.72%, so the curve is little-changed at -46 bps inverted.
EQUITIES MOSTLY HIGHER
The NZX50 is down a minor -0.1% in late trade today and heading for an unchanged week. The ASX is down -0.3% in afternoon trade so far and if that holds it will be down -1.2% for the week. Tokyo has opened its Friday trading little-changed from yesterday, and little-changed for the week. However Hong Kong is down -0.4% at its open and looking at a -2.9% weekly dump, Shanghai is also down -0.4% today in early trade heading for a -1.3% retreat. Singapore is down -0.5% in early trade there. The S&P500 ended its Thursday trade up another +0.2% on Wall Street earlier.
OIL LITTLE-CHANGED
The oil price is little-changed from this time yesterday, now just under US$78/bbl in the US, and still just over US$82/bbl for the international Brent price.
GOLD A TAD LOWER
In early Asian trade, gold is slightly firmer, down -US$9 from this time yesterday at just on US$2306/oz.
NZD ON HOLD
The Kiwi dollar is marginally from this time yesterday, now at 61.6 USc. Against the Aussie we are unchanged at 92.8 AUc. Against the euro we are also a tad firmer at 57.3 euro cents. This all means the TWI-5 is unchanged at just over 71.
BITCOIN SLIPS
The bitcoin price is down -1.8% today from this time yesterday, now at US$66,779. Volatility of the past 24 hours has been modest at just under +/- 1.6%.
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This soil moisture chart is animated here.
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