A review of things you need to know before you go home on Thursday; many rate cuts, population adjusted down, NZGB bond yield sinks, Heartland profit rises, swaps drop, NZD stable, & more

A review of things you need to know before you go home on Thursday; many rate cuts, population adjusted down, NZGB bond yield sinks, Heartland profit rises, swaps drop, NZD stable, & more
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Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
ASB, the Cooperative Bank and ICBC all cut rates today. More here.

TERM DEPOSIT RATE CHANGES
ASB, the Cooperative Bank and ICBC all cut term deposit rates, and NBS and SBS Bank both reduced savings account rates. More here.

ANYONE SEEN NELSON?
The latest update from Statistics NZ reveals they have revised our population lower by -50,000 people. ("We just lost Nelson.") They now say that at June 30, 2019 the New Zealand resident population was 4,917,000. We are further away from reaching the 5 mln mark than we thought. As at today, after this revision, the estimate of our current population is 4,934,000 and we won't hit 5 mln for at least another year.

EVER CHEAPER LONG-TERM MONEY
There was $150 mln tendered today of April 2037 Government bonds. That attracted $528 mln in bids and the average successful yield was only 1.36%. That is stunningly low for an 18 year bond and well below the 1.98% at the last equivalent tender just four weeks ago. The highest tenderer today was 1.5% and was well off the mark. And today the LGFA signaled that it wants to issue more 20 April 2029 bonds and is assessing demand.

UP STRONGLY
There has been a strong rise in the number of new dwellings being completed in Auckland. More than 10,500 new homes were completed in the Super City in year to June, +12% more than in the prior year which itself was +27% above the year before that. This momentum started in 2015.

A NINE PERCENT RISE
Heartland has reported after-tax profits of $73.6 mln for the June financial year and is forecasting a profit of between $77 million and $80 million for the forthcoming year.

MORE JOBS
The Aussie economy economy created +41,100 new jobs in July, above expectations of a gain of +14,000, but it was not enough to move their overall unemployment rate from 5.2%. (The New Zealand jobless rate at June was 3.9%.)

MARKET UPDATES
Wall Street was down -3% today, spreading gloom among markets worldwide. But the opening of Shanghai is so negative, only down -1% in early trade. Hong Kong is down much less, Tokyo a bit more. Locally, the ASX200 is down -2.3% while the NZX50 is down -1.2%.

SWAP RATES DROP
Wholesale swap rates have sunk across the curve today. They are down -2 bps for 2 year, down -5 bps for 5 years, and down -8 bps for ten years. The 90-day bank bill rate is unchanged at 1.21%. Australian swap rates are down half the amount. Updated: The Aussie Govt 10yr is down -6 bps to under 0.90%. The China Govt 10yr is down -1 bp to 3.02%, while the NZ Govt 10 yr is down -8 bps to 1.05%. The UST 10yr yield is down -11 bps from yesterday, now at just under 1.56%.

NZ DOLLAR UNCHANGED
The global gloom is not moving the Kiwi dollar any lower. The Kiwi dollar is little-changed at 64.4 USc. Against the Aussie we unchanged since this time yesterday at 95.1 AU cents. Against the euro we are also unchanged at 57.8 euro cents. That means the TWI-5 is now at 69.7.

BITCOIN DOWN AGAIN
Bitcoin has sunk again over the past 24 hours, now at US$10,085 which is another -4.7% fall in that time. The bitcoin price is charted in the currency set below.

This chart is animated here.

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USD 
NZD
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Source: CoinDesk

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We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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32 Comments

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Highlight new comments in the last hr(s).

The US 10 yr is at 1.55%. NZ 10 yr rates look out too.

You are quite right. The original version was wrong. It is updated now. Thanks for the heads-up.

Most welcome David.

inverted yield curve = recession....

Can we revise the average NZ property price by -50,000 please StatsNZ?

7% increase expected by Westpac chief economist. YEAH RIGHT!

JN, so by your logic, every year NZ's population grows by 50'000 people means $50'000 added to each house's value… hmmm you're sure about that?

I'm really starting to think its not an act now..

Thumbs up.

Come now, don't get like that, I was just illustrating the subjectivity of lies... damn lies.... and statistics.

David Chaston, what does this news about bitcoin mean?
I haven't seen anything about it in NZ news.

https://www.businessinsider.com.au/new-zealand-legalizes-cryptocurrency-...

Any employee has a legal right to insist on payments in cash in New Zealand. It looks like this just makes it legal to be paid in bitcoin if both employer and employee agree. Why anyone would want to be paid with currency they can't use to buy things is beyond me, though.

Think it's the equalavant of Bitcoin in dollars. I doubt anyone will be taking that offer up after todays market slip and Bitcoin going with it.

I thought that was no longer the case?

What's no longer the case? Bitcoin is still only good for human trafficking and illegal drugs, if that's what you mean. Employees still can insist on being paid in cash, too (http://www.legislation.govt.nz/act/public/1983/0143/latest/DLM74845.html).

This is not about the New Zealand Government legalising payment of salaries using bitcoin as is suggested by the article.
Rather it simply appears that the IRD - under the Income Tax Act 2007 - has made a binding ruling that salaries paid in crypto-currencies are subject to income tax.
The link to the bulletin is:
https://www.classic.ird.govt.nz/resources/1/c/1c6029d0-611c-4a15-9cbf-b7...
It appears as though this bulletin is legitimate and it is this that is the source of the reports.
The news report - and others - have bent the true situation a little; rather than approving payments in Bitcoin, it is ruling in the situation where someone accepts payment in Bitcoin then that income is subject to income tax.

In Australia, real estate and property job ads are still down almost 10 per cent over the past year.

Sectors with even bigger job ad declines include design and architecture; advertising, arts and media; construction; and retail and consumer products.

The industries that posted more job in July than in June were community services and development, education and training, science and technology and healthcare.

Re: The population stats - does this mean migration may not have been as high as thought? And how much of that minus 50,000 people can be deducted from Auckland? If its 15,000 less people in Auckland, then that effectively reduced the housing shortfall by 6,000 houses.

Plus the new increase in house production numbers. This could push the Alk market off a slight down ward to biger slide which could be spread to the rest of the country quite fast in this environment.

OK, so we don't need so many houses built after all !!!!

As per my earlier post today, our immigration numbers are falling based on the 12/16 methodology.. esp Auckland is losing a lot more than initially estimated..

So the whole point of a shortage is in Question..

these numbers will be further recalibrated lower as the months go by..

Fletcher shares will take a hit as there will be less demand for their prefabricated houses

NZIIBDT002C2 - 2.0%, 20/09/25 linker trades at 121.77 which yields -0.096%

Negative real yields are spreading out the curve, it can go a lot further than this as well.

Bitcoin needs Lonewolfnz to buy the dip . Under 10000.

Slight problem.. Lonewolf (aka [deleted]) doesn't have anything to buy the dip with... https://www.reddit.com/r/newzealand/comments/cgx2e3/labours_secret_inter...

Crony capitalism at it's finest:

August 7, 2019 – The board of directors of General Dynamics (NYSE: GD) has elected James N. Mattis to be a director of the corporation, effective August 7.

Mattis, age 68, is the Davies Family Distinguished Fellow at the Hoover Institution at Stanford University. He served as the 26th United States Secretary of Defense from January 2017 to December 2018. Link

Fletcher Building , closing at another low. With annual results, due 21 August, notwithstanding a 300 million buyback programme to follow, looks set to leave both MSCI world and NZ indices November barring a miracle. Irrespective of interim global stock market gyrations. Its outlook could become increasingly stark .

They're trading very heavy, close to the old write-down lows. Still plenty of downside possible, if you have the conviction short them.

I believe I am a long term bear. Shares need a 3 in front before the vultures. Cannot believe I wrote the crap below

by Cowpat | 8th Feb 18, 4:53pm
4
up
by Cowpat | Sat, 18/03/2017 - 13:08
up2
On a weekend where you have one of New Zealand's largest companies in a trading halt, undoubtedly preparing the market for some unpleasant news on Sunday, where instead of building a conference centre it may have only costed for a carpark, only one commentator broached the subject. Our nation is so infatuated with real estate, so besotted by our recent found paper wealth, so deluded, that after two decades of incessant vested real estate drivel that buying a home is the path to success, yet oblivious to the cliff edge rapidly approaching ahead .Like Fletchers, Hunan Daking went into a trading halt last week.,, but as long as the neighbours made money on flipping a home New Zealand will be fine.
by Cowpat | Mon, 20/03/2017 - 09:45
up2
Fletchers out of trading halt, EBIT down 110 million from previous update. Reading thru the lines , more bad news will come

There is always a defined pathway . Serco, Carillion Capita are but recent UK examples. The only question remains is which company (ies) will benefit from a shrunken Fletchers. And we mock HNA

I still struggle to understand how such a dominant player has so little pricing power. Clearly it was/is an industry with over-supply, either that or there was complete and utter incompetence and hubris right across the board.

"...the Merval immediately dropped 10% at which point its standard circuit breaker clicked in, then on re-opening the stampede for the door saw the Merval drop 48% on the day, the world's second largest ever one day market drop anywhere in the last 50 years.
When rip-offs are this big and done this well, I am forced to sit back and applaud. The people behind the Elypsis and BTG Pactual polls have pulled off one of the biggest white collar crimes of all time, right in front of your noses and instead of it causing an international financial scandal, it takes a pissant blog in a dark corner of the interwebnetpipes to point it out to you all."
https://incakolanews.blogspot.com/2019/08/exclusive-how-argentinas-stock...