A review of things you need to know before you go home on Thursday; Some tweaks to fixed mortgage rates and TDs, FHBs get a break, more record low yields in bond tender, swap rates firm, dollar soft, bitcoin below US$10,000 again

A review of things you need to know before you go home on Thursday; Some tweaks to fixed mortgage rates and TDs, FHBs get a break, more record low yields in bond tender, swap rates firm, dollar soft, bitcoin below US$10,000 again
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Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
The Bank of Baroda has trimmed its fixed home loan rates, with the 1-year moving from 4.69% to 4.59% and the 2-year from 4.59% to 4.49%.

TERM DEPOSIT RATE CHANGES
SBS Bank has cut most of its term deposit rates, with the reductions between 25 basis points and 35 bps. Biggest drop is for the 6-month term, which goes from 3.2% to 2.85%. The biggest bps cuts were at the shorter end. TSB also cut most of its rates.

FHBs GET SOMETHING GOING FOR THEM FINALLY
Lower quartile house prices dropped significantly in parts of Auckland in July leading to ongoing improvements in affordability, the latest interest.co.nz Home Loan Affordability Reports show.

MORE RECORD LOW YIELDS IN BOND TENDER
There were $250 million of April 2025 NZ Government Bonds tendered today and they came in easily at a record low yield for this bond. The average accepted bid yield was 0.8411, easily coming in below the previous low for these bonds of 1.21%. This was the 34th tender of these particular bonds. Today's tender attracted a moderate $553 million of bids, giving a cover rate of 2.212 (the highest ever cover rate was 7.125 in March 2017). The highest rejected bid was 0.9%, while the highest successful bid was 0.845%. The lowest successful bid was 0.83%. 

THE HISCO HOUSE SALE WAS 'MATERIAL'
The FMA says ANZ NZ should have disclosed the sale of an Auckland house to the wife of its former CEO David Hisco as a related party transaction in its 2017 financial accounts and has questioned the role of auditor KPMG 

SKY FALLS
The share price of Sky Network TV fell by 9c to $1.08 after it wrote off $670 million in goodwill, producing a net loss in the June year of $607.8 million. It was a busy day for financial reporting. Among other notable results announced were Air New Zealand's profit of $270 million (down from $390 million) and Auckland Airport's $523.5 million profit (down from $650.1 million). The results given here are the statutory profit after tax figures, rather than the companies' own chosen highlighted earnings performance measures. 

SUDDEN DIP
In Australia, their August PMIs are raising eyebrows. Their factory one is broadly stable (at 51.3) even if it is recording only a very slow expansion. But their services PMI has made a sudden turn down, and is in fact contracting (at 49.2 and down from 52.3 in July). Australia may be the only economy where the factory PMI is more positive than their service sector PMI.

SWAP RATES FIRM
Wholesale swap rates have risen today after yesterday's slippage with the 2 year up +1 bps, the five year up +2 bps and the 10 year up +3 bps. The 90-day bank bill rate is up 1 bp at 1.18%. Australian swap rates are little-changed so far today. The Aussie Govt 10yr is down 1 bp at 0.93%. The China Govt 10yr is up +1 bp to 3.07%, while the NZ Govt 10 yr is up +5 bps at 1.13%. The UST 10yr yield is up +1 bp to 1.58%.

NZ DOLLAR SOFTER
The Kiwi dollar is still soft and down at 63.9 USc and still its lowest since January 2016. Against the Aussie we are lower at 94.4 AU cents. Against the euro we are little-changed at 57.6 euro cents. 

BITCOIN LOWER
Bitcoin has slipped below US$10,000 again today, recently at US$9,946 and that is down -5.6% in the past 24 hours. The bitcoin price is charted in the currency set below.

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Back in the Dark Ages I used to set the rates for the mortgage book based off the 7 years Government Bond rate. have a look at the 7 years Swap rate in the above graphs for a clue as to what's coming....

You could try here

I wonder if that is RE agents pulling the Aussie PMI down?

NZ peso now in the 63 cents US range. Strewth.

I expect it will be closer to 40 cents by the end of 2020.

All by RBNZ design and intent – inflation stirring is their mandate apparently.

Get ready to pay more (possibly a lot more?) for imported products.

Good luck though with that pay rise request to offset the above.

Gold and US dollars have been the things to buy this year so far.

And overseas holidays

Air New Zealand's profit of $270 million (down from $390 million) Shares down 19% year on year.

...the iron law of investing is that a security is nothing but a claim on a future stream of cash flows. Valuation is a crucial determinant of long-term returns. The higher the price an investor pays for those cash flows today, the lower the long-term rate of return earned on the investment. Link

I'm sure my father's AIR shares are still in the bottom draw waiting for me to dispose of them. He gave up on them in disgust many years ago.

RBNZ have signaled a cliff isn’t enough – after that they will completely bury the $NZ if necessary.

It appears they will blindly follow the 2% inflation mandate no matter what the consequences.

Purchasing power may well be horribly eroded – the economy could be pummeled to a pulp – but if the RBNZ decide negative interest rates / quantitative easing is required – then it’s off to the races we go.

As a commentator suggested a day or so ago - completely bonkers!

Yeah could get ugly.
What price petrol in a year? $2.60 - $2.80?

But the silly thing is that rising petrol prices will be “looked through” - due to volatility.

So they don’t count – really?

Try telling that to the gas-pump.

On a day that the NZD goes sub 64 USD ,property becomes more affordable for lemons and Hisco makes the front pages, time to recall Irish banks and Sean Fitzpatrick , the Irish banker not sometime hooker.

https://www.ft.com/content/67ae51e2-5e35-11df-8153-00144feab49a

I can recommend 'Rosie' an Irish movie:

ROSIE tells the story of a mother trying to protect her family after their landlord sells their rented home and they become homeless.

I remember when Sky founding holders sold out a few years back at $4.80, the shares when rated a buy, with 6% divi, the share price went to $6. A dangerous game buying overpriced shares as a dividend play. Sky shares now down 80%. There are now many shares way over priced to get 4 % dividends. Sky sticking to its format has been a slow motion train wreck. If union or league go they have big problems I think.