A review of things you need to know before you go home on Tuesday; personal loan rate changes, strong auction pickup, equity market falls slow, swaps soft, NZD firm, & more

A review of things you need to know before you go home on Tuesday; personal loan rate changes, strong auction pickup, equity market falls slow, swaps soft, NZD firm, & more
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Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
None to report today.

TERM DEPOSIT RATE CHANGES
None here either.

LOWER FLOOR, HIGHER CEILING
NZCU Baywide (and NZCU Central and NZCU South) have followed up their recent lower Personal Loan secured rates (8.90%) with lower minimum rates for unsecured personal loans as well (10.90%, down -400 bps). At the same time they have widened the band for unsecured personal loans with the maximum rates now out to 27.9% (from 21.9%).

NOT SCEPTICS
Chartered Accountants Australia and New Zealand and CPA Australia have joined 13 of the world’s largest professional accounting organisations committing to a call to action in response to climate change. The organisations represent 2.5 mln accountants globally.

'WE ARE NOT GUILTY'
The defendants in the National Party donations case have pleaded not guilty to charges brought by the Serious Fraud Office. The four men entered their pleas today during their first appearance in the Auckland District Court. Yikun Zhang (48), Shijia (Colin) Zheng (34) and Jami-Lee Matenga Ross (34) each face two charges of ‘Obtaining by deception’. Hengjia (Joe) Zheng (34) faces one charge of ‘Obtaining by deception’ under the Crimes Act and another of ‘Providing false or misleading information’ under the Serious Fraud Office Act. The charges relate to donations paid to the National Party. The defendants were remanded on bail to reappear in the Auckland District Court on 10 June.

A STRONG PICKUP
Residential house auctions are suddenly far more frequent, and a much higher success rate is being acieved. In Auckland, Barfoot & Thompson's auction rooms are recording sales on two-thirds of the presented properties.

RBNZ MAKES CHUNKY ESTIMATE OF CYBER-ATTACK COSTS
A Reserve Bank Bulletin article has reiterated the central bank's estimated cost of cyber attacks to banks and insurers. The RBNZ says they could cost $104 million a year for the banking sector and $38 million for the insurance sector, or the equivalent of 2% to 3% of annual profits for the two industries. Modelling also indicates that in any given year there is a 5% chance the costs could exceed $2.3 billion a year, equivalent to 34% of annual net profits. The RBNZ says the cumulative cost impact over, for example, a five- or 10-year horizon is substantial, particularly when considering the opportunity cost from not being able to use this portion of profits more productively in addition to the direct financial loss. The RBNZ plans to consult on the development of risk management guidance for cyber-risk this year.

FINANCIAL MARKET UPDATES
Earlier today we reported that equity markets were suffering steep declines around the world. At the end of trade, the S&P500 ended -3.4% down on the day. The Dow30 ended up down -1036 points or -3.6% lower. Gold was up +US$30/oz to US$1,673 at one stage. The UST 10yr yield dropped to 1.36%. Since the US close however, things have calmed somewhat. Gold is now at US$1,660/oz and the UST 10yr yield is 1.41%. Both are still sharp movements in the past 24 hours. The NZX50 Capital Index is currently down another -0.9% so far today, the ASX200 is down another -1.2% today. And Tokyo has just opened playing catchup after a long weekend and is down -3.0%. Hong Kong is flat (+0.1%) and Shanghai is down -1.0% in very early trade today.

CORONAVIRUS UPDATE
The latest compilation of Covid-19 data is here. There are now 2403 cases outside China. A week ago that number was 1013 so it has more than doubled in one week.

LOCAL IMPACTS BITE
It is probably similar here, but in Australia market research form Roy Morgan says in mid-February around 1-in-6 Australian businesses (15%) have already been affected by the coronavirus. This new threat to business comes after over a quarter of Australian businesses (28%) said they have been affected by the extensive bushfires over the last few months. Around 40% of manufacturers are already reporting being affected and closely followed by a third of education & training businesses and those in the wholesale industry.

LOCAL SWAP RATE DROP SLOWS
Yesterday's sharp retrenchment in wholesale swap rates has slowed today, with all rates essentially unchanged (but soft) across the board today so far. The 90-day bank bill rate is down -2 bps to 1.12%. In Australia, their swap rates are currently holding firm. The Aussie Govt 10yr is unchanged at 0.91%. The China Govt 10yr is down -1 bp at 2.87%. The NZ Govt 10 yr yield is also unchanged at 1.22%. And the UST 10yr yield is down -6 bps at 1.41% although that is a recovery from the opening this morning.

NZ DOLLAR RISES FROM FLOOR
The Kiwi dollar has shown some firmness at the day has progressed, now at 63.5 USc. Against the Aussie we are also firm at 95.9 AUc. Against the euro we are firmer too at 58.5 euro cents. That means the TWI-5 is now a tad higher at 69.5.

BITCOIN HOLDS
Bitcoin is -3.3% lower today at US$9,608. The bitcoin price is charted in the currency set below.

This chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Our exchange rate chart is here.

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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34 Comments

World's only govt guaranteed, gold-backed cryptocurrency PMGT has been officially released for some time, but only been available to U.S. and Aussie residents. However, the currency is now available from today on the KuCoin cryptocurrency exchange. This crypto is fully redeemable in gold bullion.

https://www.kucoin.com/news/en-pmgt-gets-listed-on-kucoin

A cypto backed by gold. No we are talking. Huge step up from btc...backed by nothing.

Government guaranteed too. Should be available in NZD at some stage in the future and not necessary to buy via the exchange. Early days.

Whats Fiat backed by?

Italy

Federazione Italiana de Automobili a Torino

Guns

Fiat money is backed by nothing - it’s Government money. ‘IN GOD WE TRUST’ is printed on every US green back. Says it all really. PM’s and crypto’s are ‘peoples’ money - free from Governments manipulation, they all eventually become worthless. Greece, Venezuela, Mexico, Argentina to name a few.

Its a bit too soon to say all cryptos eventually become worthless, but coinmarketcap has 5143 crypto currencies and tokens listed.. 4900 of them will be worthless in a decade, the other 100 odd.. we'll see.

Surely this new currency makes the others worthless? Why buy bitcoin and hope it’s worth something when you could buy a government approved currency backed by gold?
This has always been my issue with crypto’s. What makes the currency you’re buying better than the almost infinite other options?

The stockbrokers pulled off a clever "feint" today. As one, they all sold off enough shares this morning to create a selling panic and then rushed in to snap up cheap shares this afternoon. They do this periodically.

They are mirroring the technique of Wall street day traders, betting the Fed will pump back up any dips. But i'd be wary, the Fed knows we are in a bubble, what better way to let a correction happen than now - they can blame the bust on the virus.

They ran through the stops. Should be illegal.

Don’t hold your breath.

Trump will go very hard on the Fed – “there is to be no correction”.

His re-election hopes are built on a strong economy – and for many Americans, that means a booming share market.

I did not see anyone buying up strongly?

Can anyone lay their hands on Eyes of Darkness by Dean Kuntz? Nephew's teacher showed the class today. Predicts a virus that attacks the lungs & is released in Wuhan about 2020. Written 1991.

Despite that It's still an interesting coincidence that it was a Wuhan virus

California would seem prime spot, the homeless folk often driven by drug & mental illness.

Prime as an example of wokeness and identity politics overwhelming good governance and sound policy. It's like the Democrats have trouble running, operating/administrating, rather they flash from cause to cause racing emotions.

https://youtu.be/UDZRO4RueHI

Singapore and South Korea are good examples of 2 things.
1. deploying the community health systems.
2. learning from the SARS and putting those learnings into practice.

"The S&P500 ended up +3.4% down on the day. The Dow30 ended up down -1036 points"

English can be funny language

Maybe less the English language and more the death of copy checking due to FOMO

Guilty !

Soyman will have some explaining to do when his CCP sponsors want to know why their operatives are in court?

Must watch.

The accountants and climate change, they are claiming the role of running the numbers.
They see tremendous consulting fees on offer (on offer from all the government clients), think IT consultants and the year 2000 problem.
Fortunes were made, and will be made by believers and non-believers alike. Doesn't matter what the consulting operative thinks. Think wallet capture.

The accountants are claiming they will cost every strategy each economic policy priorities each measure.
Maybe something the climate alarmists don't want.

We have been told.

Businesses should start planning for the possible impact the coronavirus outbreak might have on their bottom lines, the Reserve Bank governor has urged.

https://i.stuff.co.nz/business/119784948/prepare-for-coronavirus-impact-...

Sounds like he was really amping up the common touch, non-institutional persona.

"I know for certain I have no idea what's going to happen next. If I did, it would be really boring. Why would you get out of bed everyday?"

He knows that housing will become more expensive next. That is his modus operandi.

Goldman Sachs, have cut New Zealand GDP to -0.1 percent and Australia to -0.3 percent .Both Reserve Banks, have different views., reinforcing their outlook late last week
Update from our consulate, (and they will be sometime in the future)
http://www.chinaconsulate.org.nz/eng/fyrth/t1748946.htm. China very concerned around Australia's ( and undoubtedly New Zealands ) un WHO like delay in letting the students return to start the term. Ironic given Hong Kong further delays the start of the school term, as has China.

Seems a bit hypocritical. They oppose international travel restrictions yet heavily impose them in their own country????

Is Iran going to be a super spreader?

https://www.nytimes.com/2020/02/24/world/middleeast/coronavirus-iran.html

And for live updates on twitter

https://twitter.com/COVID_19NEWS

Might be time to prepare...