Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
China Construction Bank has cut many standard fixed rates today but left its market-leading 'specials' unchanged. In addition, they cut their variable home loan rate to 5.50% which is a market leading level and -20 bps lower than most main banks..
TERM DEPOSIT RATE CHANGES
The Police Credit Union has trimmed many term deposit rates today.
'WARNING SHOT'
Consumer confidence, as measured monthly by Roy Morgan, dipped in July to its lowest level in 2019 and threatening the 2015 lows. Regional divergence was a key theme, with Wellington confidence up marginally but Auckland dropping sharply. The least-confident region is the South Island excluding Canterbury.
PRICE CUTS WORK
In Auckland, the largest realtor reported July results today. Barfoot & Thompson's median selling price dropped more than -5% month-on-month in July but sales volumes rose +12%. Lower prices are unlocking sales. The median Auckland selling price is now barely above $800,000 with highest July sales volumes in three years.
FLASHING RED
If you usually skip reading the Swap Rate item below, I suggest you take the time to do so today. There are very serious movements going on in the money markets, flashing red.
GRIM AUSSIE RETAIL SALES
June retail trade data out in Australia today isn't especially encouraging. June 2019 retail turnover is up just +1.9% from the same month a year ago and given that Aussie inflation is +1.6%, this is a very anemic result. In fact, if it wasn't for food (groceries, eating out, etc), there would have been almost no growth (+0.5% with inflation at 1.6%).
ACTIVE SUPPRESSION
We should also note that the Chinese Consul General in Auckland has put out a Statement supporting the thugs at Auckland University for physically attacking Hong Kong students, praising their defence of "the rule of law" (no kidding). It is clear that Chinese government offices here are attempting to suppress free speech. The reach into our communities of Chinese secret police activity is a serious worry.
EQUITIES DROP HARD
The -1% drop for Wall Street equities earlier today (actually more, because because they were up about +1% before the latest Trump tariff announcement), is being followed in Shanghai (down -1.7%), Hong Kong (-2.2%) and Tokyo (-2.4%). Locally, the ASX200 is down -0.5% and the NZX50 is down -0.1%.
SWAP RATES DIVE
Wholesale swap rates dived today across the curve. The two year is down by -4 basis points, the five year is down by -7 bps and the ten year is lower by -10 bps. These are HUGE moves. That means the 1-5 swap curve is now a negative -5 bps and the 2-10 curve down to just +34 bps. The 90-day bank bill rate has slipped another -2 bps to 1.46%. Australian swap rates are also a little softer today, although only by -2 to -3 bps. The Aussie Govt 10yr is down -11 bps to 1.09%. The China Govt 10yr is down -5 bps at 3.14%, while the NZ Govt 10 yr down -9 bps today 1.39%. The UST 10yr yield is now at just 1.88%, and down an eye-watering -16 bps since this time yesterday. Bond markets are flashing serious warning signals.
NZ DOLLAR DIPS
The Kiwi dollar is marginally weaker today, but not by much, and is now just on 65.4 USc. Against the Aussie we firmer at 96.1 AU cents. Against the euro we are fractionally softer at 59.1 euro cents. That all means the TWI-5 is now down at 70.9.
BITCOIN FIRMS
Bitcoin is firmer today at US$10,389 and up +4% since this time yesterday with a rally that started about nine hours ago. The bitcoin price is charted in the currency set below.
This chart is animated here.
Daily exchange rates
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29 Comments
We need a recession !
... there , I've said it ... the world didn't stop , the sky didn't fall ...
The warning signs are out there ... collapsing consumer confidence , OCR cuts not working , debt levels at hysterical highs , tariffs , house prices sliding ... yadda yadda . .
That's exactly what the government yield curve has been telling us for the past six months. Today we have 10 year rates way below 1.50% and curve inversion out to five years. Not reported anywhere in the media.
Wake up folks. STORM WARNING. GALE FORCE WINDS ARE EXPECTED TO HIT OUR ECONOMY WITHIN 12 MONTHS. STORM PREDICTED TO LAST UP TO 4 YEARS.
Really? This article from the herald uses your exact metaphor... (albeit behind a paywall)
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
That's quite comical. I don't pay for the herald so had no idea !
I tell you though, no news channel has reported the drop off in govern yields and its is insane. 9 months ago the Apr 2033 issue was trading at 2.92%. Today its at 1.56%. And this is what's pulling the swap market lower and enabling banks to offer lower and lower fixed rate mortgages. And yet nobody has talked about what it means.
Ooh look, lower mortgage rates seems to be covered every single day. But oh fck we are headed for a period of zero growth and a multi year recession seems to attract no news.
The genuinely comical aspect of all of this is that Interest say they are informing people to help them make financial decisions. So how the hell have they ignored this story for so long ?
It's somewhat of an exaggeration to describe the recent mildly heated discussion at Auckland University campus as "thugs.. attacking Hong Kong students"
Here's a video:
https://www.reddit.com/r/universityofauckland/comments/cjle1d/chinahong…
Some action at 4:50. Looks a touch theatrical to me.
It's hard to have much sympathy for the students as they have been known engage in "active suppression" themselves. There really is quite a climate of fear in Universities these days.
Having spent 25 years living in HK and China I don't wish to see our country as a place where people are attacked for their views. Its irrelevant whether the person is trying to abuse someone from Hong Kong, someone of different religious beliefs or someone who is of a particular race. No place for that in our society. Stamp it out firmly and kick out any foreigner who is inciting hate against others. This behaviour is against our collective value system.
No. Respectfully, you are all wrong there. Are you saying its ok if someone chants you're a gay animal ? What about if they verbally abuse a Maori for his or her culture. There isn't a place for it here. Cultured debate yes, the strongest argument forged in the fire of debate yes but abuse ? Never.
We don't support calling the police for such things.
However my main objection is simply that the term "thugs" is too strong a word to describe these characters and also that the consulate's declaration is pretty much what one would expect to see come out of this particular mouthpiece. I kind of found their support touching in this politically correct miasma we are ensnared in today. All good fun really.
i hope she is not studying drama, that fall would be a C- at best , "security" very funny
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12254118
Yep and few less pro China articles would be a nice place to start. We don't need academics and think tanks telling us about how great OBOR is gonna be, we need some stories on the human cost of having 2mm people in concentration camps and the Confucius institutes role in spreading propaganda
Really!
The Chinese machine is a virus! trying to buy their way into politics, laundering money iinto our housing market, surpressing any anti chinese sentiment or threatening a backlash for any truth spoken about them.
They are encroaching on our every day kiwi life whether you like it or not and if dont think that massively effects finance you are totally naive
Why do you think Trump has bipartisan support, from Dems that Loathe him...
China is a plague that can only be fixed by an overthrow of the communist regime
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