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A review of things you need to know before you go home on Monday; Lending Crowd cuts loan rates, housing market buoyant; ANZ pays penalty, equity market turmoil; swaps sink, NZD lower, & more

A review of things you need to know before you go home on Monday; Lending Crowd cuts loan rates, housing market buoyant; ANZ pays penalty, equity market turmoil; swaps sink, NZD lower, & more

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
Update: ANZ has ended its eight month special rate of 2.80% (reverting to 2.65%) and cut -10 bps from its one year rate, taking ity back to 2.60%.

LENDING CROWD GOES LOWER AGAIN
Lending Crowd have reduced their peer-to-peer interest rates. At the highest credit standards the reduction is -20 bps for a three year loan and -40 bps for five years. For lower credit standards some of the reductions are much more substantial, up to -260 bps for B1 grade on a five year loan. Lending Crowd's retail : wholesale funding split is 96% : 4%. They claim very low default rates. SME loans carry rates +50 bps higher than personal loans, but for A1 Credit grade that is still less than 7%.

BOUYANT, BUT ...
The February housing market remains buoyant. New listings are up and average asking prices are on the rise but total housing stock available for sale remains tight.

A PEAK, BUT DOWNHILL FROM HERE?
New Zealand's terms of trade hit a record high at the end of 2019, surpassing the previous high at December 2017 and the June 1973 historic high. This latest peak was driven by high protein prices whereas oil and vehicle import prices have declined. They may decline further in the first quarter of 2020, but it is almost certain our export prices will fall more sharply.

TRAVEL BAN EXTENDED BY 7 DAYS
Update: The Government has extended its travel ban preventing people from China and Iran from coming to New Zealand. The ban has been extended from March 3 to March 10. Travellers from Northern Italy and South Korea will also be required to self-isolate for 14 days and register with Healthline.

SNEAK PEEK
Based on the yeoman work at Massey University's Albany campus, we are now offering the key charts that make up their GDP Live on our service. You can check them out here. We will be launching formally later in the week. It is a project many readers will appreciate. GDP results are released about 80 days after the end of each quarter. But the AI team at Massey have access to a huge range of official and unofficial data and using machine learning have a model that now gives a close growth result well before the StatsNZ release.

BIG PENALTY
ANZ NZ to pay customers more than $35 mln after admitting a breach of its responsible lending obligations in relation to a coding error within a loan calculator. This is the largest monetary settlement ever for the Commerce Commission. It was an issue with an internal ANZ loan calculator between June 2015 and May 2016 that meant some interest to be charged to customers was left out when calculating their repayments or loan term. More than 100,000 personal and home loan customers were affected. The $35 mln penalty represents 1.9% of ANZ's tax-paid profits in the year to September 2019 and were all provided for in those accounts..

QUADRUPLING
The latest compilation of Covid-19 data is here. There are now 8558 cases outside China, a rise of +1796 in one day. A week ago that outside-China number was 2208 so it has almost quadrupled in a week. That's all based on the official data, but false negatives, and China not counting asymptomatic positives (and Iran hardly counting anything), make all this data suspect. We have now pushed though 3000 deaths worldwide (and almost all of them in Hubei Province, China).

EQUITY MARKET UPDATES
The NZX50 Capital Index is now down -2.5% from Friday's close, which is less than the -3.2% drop it opened with. The ASX200 is down -1.8% in early trade. Tokyo opened lower, then turned higher and now up +0.5%. Shanghai has opened up +1.6% and Hong Kong opened up 0.2%. Tomorrow's Wall Street reaction will be "interesting" to say the least.

LOCAL SWAP RATES DOWN VERY HARD, YET AGAIN
Earlier today, wholesale swap rates sank up to -20 bps across the curve, but some of that has been pared back subsequently. At present, the two year is down to just 0.69% and down -17 bps from Friday. The five year rate is down -15 bps to 0.77%, and the ten year down -13 bps to 1.07%. These are all record lows, dipping below the previous benchmark set in October 2019. The 90-day bank bill rate is also down very sharply, down -19 bps to 0.87% in anticipation of central bank rate cuts. In Australia, their swap rates are marginally higher with most market players not expecting a rate cut tomorrow by the RBA and most of their fall coming on Friday. The Aussie Govt 10yr is sharply lower at 0.71%, down -15 bps from Friday. The China Govt 10yr is also soft at 2.76% and down -5 bps. The NZ Govt 10 yr yield is lower too, down -10 bps at 0.97%. And the UST 10yr yield has reached a new record low, now at 1.10% and another -3 bps fall from where it closed on Friday. Remember, this time last week the UST 10yr was at 1.38%.

NZ DOLLAR SINKS
The Kiwi dollar has slipped further, now at 62.3 USc and -½c lower than this time on Friday. Against the Aussie we are lower at 95.6 AUc. Against the euro we are much lower at 56.3 euro cents. That means the TWI-5 is now lower at under 67.9, a -100 bps drop since Friday.

BITCOIN SLIPS
Bitcoin is down -4% today from Friday at US$8,522 although most of that happened over the weekend. 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 comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

32 Comments

A 65-year-old Chinese woman who fell seriously ill after being infected with the coronavirus made a startling recovery after being given stem cell therapy
Link

Can we get past this 'end of the world' crap and get on with buying and selling houses?

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I've heard that Chinese medicine practitioners and acupuncturists have cured all Chinese patients.

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GDPLive looks cool and interested to get my head around the methodology.

On a positive note, the Australasian equity markets weren't too badly beaten up and the Nikkei has even bounced back 1.1%. USDJPY also strengthened.

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Though at the moment US Treasuries don't appear suitably enthused - bucking the positive trend...

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https://gdp-live.s3-ap-southeast-2.amazonaws.com/GDP_Live_Working_Paper…

Be interesting to see how it goes.
Methodology is black box. Some time series, if I remember correctly. But not much.

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In other news, somebody has made a Corona Cryptocurrency, with "proof of death" tokenomics. I'm not making this up.

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so we can finally take it with us.

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I don't know whether Coronavirus is just a huge overreaction, or whether some people are just naive and in denial. To see the ASX where it is now, given it was tanking this morning is very surprising.

It appears a lot of rules are out the window in this day and age. Hope is such a bigger factor than it used to be.

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Yes projected earning are almost irrelevant these days

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Masher,

Should I dump my Corona beer, or just drink it all?

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“Let’s call it pure luck,” he said. “We decided to choose coronavirus as a model for our system just as a proof of concept for our technology.”
“Given the urgent global need for a human coronavirus vaccine, we are doing everything we can to accelerate development,” MIGAL CEO David Zigdon said. The vaccine could “achieve safety approval in 90 days,” he said.
https://www.jpost.com/HEALTH-SCIENCE/Israeli-scientists-In-three-weeks-…

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Gotta love the Chinese way.

The Shanghai Index around 3066 at the beginning of the year - after all the turmoil of the last couple of months currently trading at 2955.

It’s cute they even bother with the pretence of calling it a “market” – though “manipulated nonsense” probably wouldn’t sit so well with the great unwashed.

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There is a Shanghai TOP 50 Index Fund on the TSE. Up by 4.3% today. Down about 70% since inception in 2007.

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From David’s morning piece:

“And on instructions from Beijing, China's banks are no longer recording loans as 'bad' as a result of coronavirus economic pressures.”

It’s seems China is determined to play the “pretend” game with their economy until the end of time – its whole underlying structure simply now rotten to the core.

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Nice one.
The CCP's directive over the weekend to the nation's state-owned banks was to not classify billions of dollars in toxic assets as 'bad' loans.
Never have I ever seen a state-mandated accounting scandal of this proportion!

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To be honest I don’t think these accounting/classification “shenanigans” are particularly new to the CCP.

They keep popping up under different guises and with different players but the underlying pretence remains – and as you suggest, they just continue to manifest on themselves.

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Financial fraud. There goes the good character test on many many OIO applications.

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custard,

Just like their GDP stats.

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China's biggest export this year is the flu. Thanks for nothing Mr Xi. Mind you, the way the media whip it up, repackage it & make it sound like the end of the world doesn't help. I wish both of them would calm down a bit.

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GDP Live – nice work – will be interesting to see how it measures up to its US counterparts.

The machine learning will certainly enter some challenging months ahead – hope it doesn’t learn any bad habits from the experience.

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http://www.nzmessengers.co.nz/2020/03/02/南岛尼尔森两人被隔离-曾与新西兰首位冠状病毒患/?from=…

Nelson-Marlborough Health confirmed that two people from Nelson were suspected of being infected with a coronavirus and were placed under surveillance. However, the samples have not yet been submitted for inspection.

A spokesman for the Authority said the two were passengers on the Emirates flight from Dubai to Auckland via Bali and were on the same plane as New Zealand's first coronavirus patient.

Doctors in the Nelson-Marlborough area urge people with cold or flu symptoms to call their doctors instead of visiting the clinic directly.

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We’re confident the swift actions by the person and their family, and the health sector, means there is a low risk of any spread into the community from this case.

https://www.health.govt.nz/our-work/diseases-and-conditions/covid-19-no…

The MoH have no update for 2 March 2020.
There was an update for yesterday, Sunday.

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so how did they get to nelson , on a local flight or flights, so if they were infected they could of in turn could have passed it on and the chances of know to whom and where are slim.
this is going to spread very quickly once we get a few cases

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I wouldnt be surprised if the US stock market regains some of the losses after the Fed promised on Friday to use its "tools" to support the economy

Although the coronavirus crisis will ultimately be the controling influence over the next wee while

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Sky news.
Human to human transmission on NSW soil.
Including a health worker.

https://youtu.be/H1fom0-7kzs

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two stories i heard today, jaccinda told the airport she wanted the Egates closed to people from Singapore, He rang the controller whom asked who told you this? jaccinda she is standing next to me, jaccinda who?
another was a passenger came in from bali on the same plane as the infected person, no one asked where he came from or checked him out at the airport and he only found when he watched the news and still no contact
that pretty much sums up our response at the border like swiss cheese with huge holes in it.
every passenger needs to be checked and data lodged at the moment so if a case comes in the response can be swift and capture all those that he/she may effect.
otherwise just treat it as bad flu and lets get on with life ,

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9:30 here. US futures up 2%. FTSE100 up almost 3%.

It doesn’t make sense. Since last week news has only been increasingly dire. I can only assume investors have a hard-on for more interest rates cut which have been eluded too by most central banks over the weekend.

The problem is still worsening. More debt and virtual money is still being created. Call me a DGM but I firmly believe things are going to get much worse.

I will be taking this opportunity to unload my last 10% of shares.

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The BoJ got the ball rolling.

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Exactly, according to people like this who do know somewhat more than Joe Bloggs, the falls have only just started: https://kingworldnews.com/michael-oliver-2-29-2020/

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Cats, bounce, dead etc - traders being traders - knife edge stuff - underlying fundamentals remain increasingly ugly - unless you really know what you're doing - stay away.

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VofOCR,

Just to be helpful; it should read 'alluded to'. My Collins dictionary has this note; "Allude is followed by to. Be careful not to confuse this word with elude, meaning escape".

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