What happened Friday

Economy / news

A review of things you need to know before you sign off on Friday; Auckland dwelling completions low, FHBs raid K/S for first home deals, equity values still rising as companies stay optimistic, swaps a touch firmer, NZD holds, & more

4th Jul 25, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).

MORTGAGE RATE CHANGES
No changes to report today. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

ALL INVESTMENTS CARRY RISK
Responding to pressure from the FMA, Senior Trust has released some important updates to its PDS (Product Disclosure Statement). If you have invested in Senior Trust, you should read this. Senior Trust is now closed to new investors, focussed on running out its current projects.

BOTTOMING OUT?
New dwelling completions in Auckland flatlined in March and April suggesting the building slump may have hit the bottom.

THEIR TIME HAS COME?
From first-home buyers and financial hardship, KiwiSaver withdrawals hit $234 mln in May, a new monthly record. This was led by first time homebuyers diving into their savings to buy in a market that has turned favourable for buyers with falling prices as interest rates also fall.

MORE WORKS WILL HAVE TO CLOSE
New data out today shines a light on the decline of the sheep flock and the related industry. Only 1.34 mln sheep were processed at our slaughterhouses in May, a dramatic -34% lower than in May 2024. In fact the annualised sheep processing level fell below 21 min in the past twelve months for the first time, down -9.4% from the same annual volume a year ago. And apart from the pandemic shutdowns it was the largest drop since 2010. It might be ugly, but some capacity is going to have to be closed.

NZX50 RISES
It's a recovery day on the NZX. As at 3pm, the overall NZX50 index is up +0.4% so far today, up +1.4% for the past week. It is now down -2.4% since the start of the year although up +8.6% from this time last year. There are 41 gainers today led by Vulcan Steel, Briscoes, Infratil and a2 Milk. There are 40 decliners and the largest have been from Synlait, Skellerup, Auckland Airport, and Restaurant Brands. Market heavyweight F&P Healthcare was among the gainers, up +0.8%.

LIGHT AT END OF THE TUNNEL
Air NZ said its ongoing Rolls Royce engine maintenance issues are hamstringing its growth by limiting aircraft availability. Overall capacity was down -2.7% in May compared to the same month last year. Long Haul ASKs decreased -2.2%, Domestic ASKs decreased -5.5%, and Short Haul International ASKs decreased -2.2% compared to last year. But more Dreamliners are coming back into service. And new Airbus A321neo's are about to arrive.

JAM TOMORROW
Tourism Holdings issued a market update that said their forward rental revenue in both New Zealand and Australia is currently approximately 25% higher than it was at the same time last year. In the USA, while forward rental bookings initially declined by 40 to 50% following the USA’s Liberation Day, recent booking intakes have recovered closer to typical levels. Total forward bookings in this market, beyond the current impacted high season, show a single-digit percentage decline in forward rental revenue, compared to the same time last year. All this means THL's earnings will be at the lower end of their indications.

TARIFFS? WHAT TARIFFS?
Skellerup manufactures its products in its own and "partner" facilities in each of New Zealand, China and Vietnam. They sell more than a third of the products in the US. They now report that they expect to grow sales by adjusting their supply trajectories, and offset the impact on future earnings with sales growth, pricing, costing and manufacturing initiatives. So earnings indications are unchanged.

WET BUT NOT COLD, FOR MOST
NIWA (or it's new name, Earth Sciences NZ) said it was a "mild and soggy" June for most parts of the country, with contrasting dryness in Northland and the NI east coast. They report that the nationwide average temperature was 9.4°C which was +0.7°C above the June normal, making it the 16th-warmest June on record since 1909.

ENVY VIEW I
In Australia, household spending rose in May and by more than expected with a good recovery from a weak month in April. This spending was up +4.2% from May a year ago. It was their best gain in 7 months.

ENVY VIEW II
In Japan, it was the same story. Household spending jumped +4.7% in May from a year ago, reversing a -0.1% fall in April and far exceeding an expected +1.2% rise. It was their fastest growth since August 2022, and that August 2022 was only good because it was off the very weak pandemic-affected base a year earlier.

WE ARE BEING WATCHED FROM ABOVE
An eye-opening animation.

A THOUGHT TO MAKE YOU FEEL OLD
We are now closer to the year 2050 than we are to 2000. H/T KW. Or perhaps this is a thought to encourage "long term thinking" because it isn't so long-term, really.

SWAP RATES MIXED
Wholesale swap rates are likely little-changed again today, perhaps a touch firmer. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged at 3.28% on Thursday. The Australian 10 year bond yield is up +3 bps at 4.21%. The China 10 year bond rate is holding at 1.64%. The NZ Government 10 year bond rate is up +4 bps at 4.59% and was up +2 bps at 4.57% in the earlier RBNZ fix today. The UST 10yr yield is now up +7 bps from yesterday at 4.33% as bond markets made early reactions to the awful US budget..

EQUITIES MIXED AGAIN
The NZX50 is up +0.4% so far today. The ASX200 is up +0.1% in Friday afternoon trade. Tokyo is up a minor +0.1% in early Friday trade. Hong Kong is however down -0.8% at its open while Shanghai is up +0.3%. Singapore has opened down -0.3%. Wall Street rose in its half-day Thursday trade ahead of their July 4 holiday weekend with the S&P500 closing up +0.8% to another new record high.

OIL PRICES HOLD
The oil price in the US is unchanged at just under US$67/bbl and just on US$68.50 for the international Brent price.

CARBON PRICE HOLDS
The carbon price has has held at NZ$57/NZU as more trades get done. The next official carbon auction is on September 10, 2025. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD SOFT
In early Asian trade, gold is down -US$22/oz from time yesterday, now at US$3327/oz.

NZD HOLDS
The Kiwi dollar is unchanged from this time yesterday at 60.7 USc. Against the Aussie we are also unchanged at just on 92.4 AUc. Against the euro we are up +10 bps at 51.6 euro cents. This all means the TWI-5 is still at 68.1.

BITCOIN RISES AGAIN
The bitcoin price is now at US$109,196 and up +0.4% from yesterday. Volatility has been low, now at just on +/-0.8%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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10 Comments

by profile | 4th Jul 25, 4:39pm 1751603949

No wonder their finance minister is crying. Rapidly running out of other people's money.

"A surge in the number of people claiming disability benefits has seen the number of Motability customers rise by about 200,000 over the past two years to 815,000.

Such is its scale, nearly one in five new cars sold in Britain today now comes from Motability. Turnover at the group jumped by a quarter to £6.9bn last year – making it bigger than ITV, Burberry and Direct Line in sales terms."

https://www.telegraph.co.uk/business/2025/03/11/car-giant-cashing-in-on…

by Independent_Observer | 4th Jul 25, 5:00pm 1751605229

Ray Dalio's latest thoughts on the US situation:

"Now that the budget bill has passed Congress, we can see what the projections look like for deficits, government debt, and debt service expenses. In brief, the bill is expected to lead to spending of about $7 trillion a year with inflows of about $5 trillion a year, so the debt, which is now about 6x of the money taken in, 100 percent of GDP, and about $230,000 per American family, will rise over ten years to about 7.5x the money taken in, 130 percent of GDP, and $425,000 per family. That will increase interest and principal payments on the debt from about $10 trillion ($1 trillion in interest, $9 trillion in principal) to about $18 trillion (of which $2 trillion is interest payments), which will lead to either a big squeezing out (and cutting off) of spending and/or unimaginable tax increases, or a lot of printing and devaluing of money and pushing interest rates to unattractively low levels. This printing and devaluing is not good for those holding bonds as a storehold of wealth, and what’s bad for bonds and US credit markets is bad for everyone because the US Treasury market is the backbone of all capital markets, which are the backbones of our economic and social conditions. Unless this path is soon rectified to bring the budget deficit from roughly 7% of GDP to about 3% by making adjustments to spending, taxes, and interest rates, big, painful disruptions will likely occur"

It appears that it doesn't matter if its the Democrats or the Republicans in control...the debt spending is unsustainable and in my opinion quite reckless given the consequences (but the typical thinking is 'who cares, the negative consequence will be another generations problem to rectify' ie somebody else's problem).

by interesting1234 | 4th Jul 25, 5:59pm 1751608759

My pick is that the wealthy want this, they will profit as much as they ever have given they know how to given these conditions, then will siphon off wealth from the US over the next 5 or so years so when it all goes tits up, they have boltholes and options in other markets. We'll see how this comment ages, place your bets now.

by Phoenix (FKA JC) | 4th Jul 25, 5:12pm 1751605973

Skellerup manufactures its products in its own and "partner" facilities in each of New Zealand, China and Vietnam. They sell more than a third of the products in the US.

Their partner in Vietnam is Ruthimex. Vietnam is one of the world’s largest producers and exporters of natural rubber. Many Vietnamese rubber manufacturers primarily use locally grown natural rubber due to its abundance and competitive pricing.

Vietnam relies on China for sourcing in its manufacturing. So the question is how does the U.S. define trans-shipment. If for ex the Vietnam partner sources chemicals from China, then it's unclear whether or not tariffs are added to the final product.

by Foxglove. | 4th Jul 25, 5:32pm 1751607175

Those at the positions of power will sort all that out for themselves as they go along. The more the complication the more the opportunity. Corruption in US Customs Houses is as traditional as it is notorious. Chester Arthur who would later become president was booted out of the New York Customs House by President Hayes not only for colossal self enrichment but the simultaneous lucrative patronage of the Republicans that had and still opposed Hayes’ nomination. Coincidentally enough it was Arthur who would subsequently sign the Chinese Exclusion Act 1882, banning Chinese immigrants for a ten years period. Best way to sum up the American laissez faire approach to its collection of duty is as per Groucho Marx something like - you’ll enjoy doing business with me because I have principles, and if you should not like those, well then I have others.

by Phoenix (FKA JC) | 4th Jul 25, 5:18pm 1751606302

The bitcoin price is now at US$109,196 and up +0.4% from yesterday.

Biggest story around rat poison in 2025 is the emergence of Bitcoin treasury companies - basically adding BTC to their balance sheets causing stock prices to rise at a factor much higher than the BTC price.

Now, U.S. company BitMine Immersion Technologies started an Etheruem treasury on June 30. ETH is widely recognized as #2 in the crypto space behind ratty.

The stock price up 2,900% in 5 days. Good for those who got to punt on this I guess.

https://www.tradingview.com/symbols/AMEX-BMNR/

by rolande | 4th Jul 25, 6:33pm 1751610831

I wonder how many are wrapping and staking their BTC? Attractive returns but also risk getting rugged

by Phoenix (FKA JC) | 4th Jul 25, 6:51pm 1751611907

I wonder how many are wrapping and staking their BTC? Attractive returns but also risk getting rugged

Suspect they wouldn't. Most partner with specialized custodians such as Coinbase Custody, BitGo, Gemini Custody, or Fidelity Digital Assets. These custodians use a combination of cold storage (offline wallets), multi-signature schemes (requiring multiple approvals for transactions), and insurance coverage to protect assets. This approach simplifies security management and compliance but introduces some counterparty risk.

by kiwikidsnz | 4th Jul 25, 7:02pm 1751612562

The Great Bitcoin Power Shift Has Large Holders Dumping 500,000 Coins

https://www.bloomberg.com/news/articles/2025-07-03/the-great-bitcoin-po…

by Phoenix (FKA JC) | 4th Jul 25, 5:35pm 1751607317

Have the Vietnamese snookered Trump? Some food for thought on the China-Vietnam double team:

1. The continuous weakening of Vietnam’s currency has neutered Trump’s attempt at a Plaza Accord against Vietnam, maintaining its manufacturing competitiveness of Chinese raw materials and inputs while blunting Trump’s attempt at weakening the USD to increase more debt for consumption.

2. China’s opening wider its market for Vietnam’s agricultural goods have shielded Vietnam’s exports to the US while simultaneously making American access to affordable food groups in the world markets much more expensive.

3. Vietnam is embarking on a state-led super investment drive on technology upgrade & infrastructure to boost domestic demand, while filtering out all “low value” supply chain of Japan, South Korea and Taiwan to replace it with Vietnam’s own support industry and joint collaboration with Chinese industries.

4. China’s tightening its core critical minerals exports have also made sure that only Chinese finished parts being plugged into Vietnam’s manufacturing will be available on the world market, and Vietnamese & Chinese industries will become “non negotiable” in the dollarized markets due to price competitiveness.

5. The rise of two countries, two industrial parks" model between Vietnam and China’s Greater Bay Area is strengthening industrial linkages with Vietnam's 'Two Corridors, One Belt' initiative, increasingly drawing more trade, capital and commodities exchange away from Western financial hub Singapore.

6. Vietnam finally joining BRICS allows it unlimited access to Eurasian resources to embark on an accelerated industrial development path that will wipe out what’s left of Japanese, South Korean and Taiwanese industries (who have no such access) after China finished them off. As a BRICS member, Vietnam’s already de-dollarized trade structure with China and Russia will extend to other members, blocking any traceability of the dollar system while bleeding it at the same time.

7. Vietnam have recently proposed establishing a robust financial connectivity network to create a seamless inter-regional financial ecosystem of ASEAN – GCC – China, making effective use of existing frameworks such as the ASEAN-China Free Trade Agreement, promoting the signing of the ASEAN-GCC Free Trade Agreement, and at the same time studying and promoting inter-regional connectivity into a comprehensive tripartite economic cooperation mechanism, including the possibility of building an ASEAN-GCC-China Free Trade Agreement.