Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
ASB has cut 'special' rates and now has all their fixed rate offers below 4%. Details here.
TERM DEPOSIT RATE CHANGES
Both Heartland Bank and SBS Bank have also trimmed a range of TD rates, but they have both left their attractive 'specials' in place for now. ASB has also cut term deposit rates. More here.
NZGB BOND TENDER NOT SO POPULAR
The second tender of the May 2031 NZGB bond issue was poorly supported today, with only $443 mln bid for the $250 mln on offer and the lightest coverage ratio of any tender since September and the second lowest in a year. The first tender of this bond attracted twice today's support. The yield was 1.23% and down from 1.58% the last time.
VOLUMES UP ON FLAT PRICES
Auckland house prices largely flat but prices are continuing to rise in other regions, the Real Estate Institute of New Zealand says.
NOT SO GOOD A TIME TO BUY
Just 22% of people think it's good time to buy a house according to ASB's latest Housing Confidence Survey, which was taken before coronavirus became a big issue.
PONZI GUILT
A Dunedin man who ran a ponzi scheme has admitted defrauding investors of at least $15.7 mln. Barry Edward Kloogh (57) pleaded guilty in the Dunedin District Court today to all but one of the charges brought by the Serious Fraud Office. Kloogh provided financial advisory services through several companies of which he was the sole director and shareholder. He had approximately 2000 active clients in May 2019.
SECURITISING PERSONAL LOAN DEBT
Harmoney has raised to $140 mln its debt securitisation warehouse from BNZ to support its online personal lending capability in New Zealand. It has also completed an AU$115 mln debt securitisation warehouse facility in Australia. Selling personal loans off its balance sheet to outside investors allows it to lend faster than if it held them. On-selling personal debt obligations via securitisation was a favoured technique before the GFC.
AUSSIE STIMULUS
Australia announced a AU$17.6 bln stimulus and recession-prevention plan. It includes "a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients" that will cost almost AU$4.6 bln. They have been told to "spend it". Also included is "$6.7 billion to Boost Cash Flow for Employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses," and "$1.3 billion to support small businesses to support the jobs of around 120,000 apprentices and trainees." Business gets another AU$4 bln for other programs, and regional assistance gets AU$1 bln. That is a ration individuals / business / regions of 26% / 68% / 6%.
AU$770 MLN SHORT
And staying in Australia, their tax authority says wealthy Australians are engaging in "artificial and non-commercial arrangements" that are robbing the system of hundreds of millions of dollars annually.
US/EUROPE VIRUS NUMBERS JUMP
The latest compilation of Covid-19 data is here. The global tally is now 126,135 of officially confirmed cases, up almost +5000 from just this morning. Most of those additions so far today are in Italy, Spain, France, Germany and the USA all up +35% in one day. While it is true that these absolute growth numbers aren't large in proportion to the size of their populations, the sudden spurts indicates authorities there aren't or weren't in control of the spread.
MARKET ROUT
Wall Street (S&P500) ended down -4.9% earlier today. Since then, very poor US virus policy announcements has seen the futures markets tank and Wall Street will undoubtedly open very much lower tomorrow. Shanghai is down -1.7% in early trade today, Hong Kong is down -4.3% and Tokyo is down -5.1% following those US Statements. Locally, the ASX200 is down -6.6% so far and the NZX50 Capital Index is down -5.4%. All these are daily declines. We are in a very bad bear market now and the American Administration is making things substantially worse.
LOCAL SWAP RATES STEEPER
Wholesale swap rates noticeably steepened today. The two year is down -3 bps, the five year is up +1 bp and the ten year is up +5 bps. The 90-day bank bill rate is down -1 bp to 0.90% as markets now settle on an agreed level. On August 7, it was at 1.44% just before the surprise -50 bps RBNZ rate cut. At 0.91% markets are not pricing in any further cuts by the RBNZ. In Australia, their swap curve is higher and steeper today. The Aussie Govt 10yr is up another +6 bps at 0.77% after yesterday's recovery. The China Govt 10yr is little-changed at 2.68%. The NZ Govt 10 yr yield is now up to 1.06% and a further +6 bps daily rise. The UST 10yr is also in its new comeback mode and now at 0.82% and up +13 bps in a day. Again, markets aren't expecting more US Fed rate cuts, but looking for fiscal action instead.
NZ DOLLAR HOLDS
The Kiwi dollar is marginally lower than this time this morning at 62.6 USc. Against the Aussie we are back up to 96.7 AUc. Against the euro we are holding at 55.4 euro cents. That means the TWI-5 is still at 67.6.
BITCOIN DIPS
Bitcoin is now at US$7,868 and down -1% from this time yesterday. The bitcoin price is charted in the currency set below.
This chart is animated here.
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