Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Kianga Ora/HousingNZ have cut their floating and fixed rates today. Their new floating rate is market competitive. Their fixed rates tend not to be.
TERM DEPOSIT RATE CHANGES
NZCU Auckland (NR) has a six month 'special' TD rate of 3.10%. Liberty Financial (BBB-) have trimmed their whole rate card.
BIG BILL
1,073,129 workers, comprised of 914,931 employees and 158,198 sole traders, are now having their wages subsidised for up to twelve weeks. This represents more than 40% of the workforce. The million-worker milestone was reached following $1.25 bln of payments made yesterday (April 6), taking the total paid out to $6.6 bln. This is expected to rise to potentially $12 bln. If it stops there, this scheme alone will be equivalent to 4% of annual GDP. (In 2019 payments to employees amounted to about $135 bln or 45% of GDP.)
DOWNHILL, BEFORE THE AVALANCHE?
"Business confidence has well and truly been snuffed out by the coronavirus according to NZIER’s quarterly business confidence survey. But NZIER’s survey likely understates the future hit to economic activity. Headline business confidence plunged over 40 points to show a net 67% of firms expecting deteriorating general business conditions ahead. The reading was on par with the depths of the GFC. However, domestic trading activity, a better fit with GDP, fared much better. With only a net 12.7% of firms expecting a contraction in their business activity over the coming quarter."
DO AS I SAY, NOT AS I DO
What is it with cyclists and ignoring rules - repeatedly? In this case he was the rule-maker.
BIG, FAST PLACEMENT
The Treasury today sold an additional $3.5 bln of May 2031 Government Bonds via syndication. They achieved a yield to maturity of 1.4025%. Following today's issue, there will be $6.4 bn of May 2031 bonds outstanding. The deal with Treasury was done by ANZ, BNZ, CBA and UBS. They will then offer them to their client base. They are likely to be traded on the NZDX via brokers.
RAIN FADE SIGNAL FROM BOND INVESTORS
The yield to maturity of Sky TV's 31 March 2021 6.25% coupon bonds (“SKT020”) increased from 4.08% on March 17, 2020, to 80% at midday yesterday as investors took fright at the company's survival prospects in the current media market. Today these same bonds yield 40%, a one day improvement that doesn't actually mean much. The company has become a penny dreadful with their shares trading at just 27c.
EX-ASB EXECUTIVE LINLEY WOOD JOINS BNZ BOARD
Linley Wood, who spent 25 years in ASB's executive leadership team, has been appointed as an independent non-executive director of BNZ, effective April 14. Wood is also a director of the Financial Services Council, Auckland City Mission Foundation, Auckland City Mission, and is deputy chairman of the King’s School Board of Governors.
'A VERY GOOD EFFORT'
Auckland Airport's emergency capital raising has been successfully completed. The placement was fully subscribed at the price determined in the bookbuild of $4.66 per share. This represents a discount of -7.5% to the last close price of $5.04 on 3 April 2020 and a discount of -9.5% to the 5-day average price of $5.15. In the circumstances, for a company at the core of our tourism sector, this is a very strong showing of support.
LOCAL UPDATE
There are now 1160 Covid-19 cases identified in New Zealand, with another +54 new cases today and lower than the +67 increase yesterday. That is the lowest daily increase in 13 days. The number of clusters has risen to 10. Only one person has died here. There are only 12 people in hospital with the disease today, but four are now in ICU. 21% of all cases have recovered (25% of all confirmed cases).
GLOBAL UPDATE
Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 1,348,000 and up +74,000 from the 1,274,000 we had this time yesterday. 27% of all cases globally are in the US and they are up +30,700 in one day to 368,000. The Americans are claiming the disease is peaking there, but there is no real evidence actually. Five countries now have more cases than China. Australia has now over 5800 cases, and 40 deaths, but there does seem to be a peaking there. Global deaths now exceed 75,000. Death rates in Europe are frightening. The UK's is 10.3%. But both Austria (1.8% death rate) and Denmark (3.8%) have announced plans to ease their lock-downs. Death rates in Asia are modest by comparison.
REALLY?
New York investors got very bullish on the prospect the virus may have peaked. The S&P500 ended up +7% on the day, a very unusual one day gain. But it isn't flowing through to investors elsewhere with such optimism. The NZX50 Capital Indes is up a goodly +1.7% so far and the ASX200 is flat so far today. At the open, Shanghai is up +1.7% (after being on holiday yesterday), Hong Kong is up +0.7%, and Tokyo is up +1.3% all in early trade. None of them are really buying all the American's bullish tone. The question will be, before the Easter break, can Wall Street sustain it, or is it just the now-too-familiar volatility.
SWAP RATES UPDATE
Yesterday, swaps fell at the short end but held at the long end, steepening the curve. Update: Today they held at the short end and rose at the long end, further steepening the curve. We don't have wholesale swap rates movement details today yet. We will update this later in the day if they show a significant change. The 90-day bank bill rate slipped -1 bp to 0.47%. The Aussie Govt 10yr is up +6 bps at 0.82%. The China Govt 10yr is down a sharp -9 bps at 2.53%. The NZ Govt 10 yr yield is up +5 bps at 1.09%. The UST 10yr is up +6 bps today to just under 0.69%.
NZ DOLLAR FIRM
The Kiwi dollar is up +1c from this time yesterday at 59.6 USc. Against the Aussie we are little-changed at 97.4 AUc. Against the euro we are also up, up by +¾c at 55.1 euro cents. That means the TWI-5 is now up to 66.5.
BITCOIN UP
The price of Bitcoin is also rising strongly, up +6% in a day to US$7,289. The bitcoin price is charted in the currency set below.
This soil moisture chart is animated here.
The easiest place to stay up with event risk today is by following our Economic Calendar 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.