What happened Friday

A review of things you need to know before you go home on Friday; retail rate cut flow continues, Jobseeker benefit applications jump, AIAL downsizes, swaps flat, NZD up, & more

24th Apr 20, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
~~No changes today~~. Update: Westpac has cut their one and two year 'special' fixed home loan rates by -4 bps to 3.05% and 3.35% respectively. That brings them into line with some other majors.

TERM DEPOSIT RATE CHANGES
First Credit Union has cut rates for all terms 6 months to 3 years. BNZ has cut savings account rates for Personal On Call / Total Money / Business OnCall accounts from 0.10% to 0.05%. Update: Westpac has cut all its TD rates for terms to 9 months by about -15 bps, and cut its 18 month offer by -15 bps as well, to 2.45%. 2.45% is now its highest offer for any term. These Westpac cuts are effective on Tuesday, April 28, 2020.

CAN YOU HELP?
We are being read far more these days than pre-lockdown. And we have seen our comment volumes jump, with many days well over 600, some days over 800. These volumes are overwhelming us. Rather than turn comments off or limiting them in other ways, we are asking registered readers for assistance in identifying comments that breach our commenting standards. A simple "Report" button is now active on each comment.

COST/BENEFIT UPDATES
Number of people on Jobseeker Support increased by +20%, or +7700 in a week to April 17 (latest data). And that takes the April total to 327,800 people who are on a main income support benefit of the various kinds. The latest estimate is that 5.8% of the working aged population is on a Jobseeker support benefit. More than 400,000 people have been approved for wage subsidies. The total cost so far of the wage subsidy program has now exceeded $10 bln. Applications for subsidies for almost 100,000 people have either been declined or ore now closed (withdrawn).

MORE CHARTS
StatsNZ has launched a data portal tracking economic, social and health data for the pandemic that will be a useful resource for a set of quick updates.

SHARP DOWNSIZING UNDERWAY
Auckland Airport is now operating at about 10% of its capacity with no certainty in the near term of when the market would recover. They have started "consulting with staff about proposed changes to staffing levels", in line with a much smaller capital program and fewer flights and people travelling. Almost all the emergency capital raising recently has gone to just paying current operating expenses and preparing for the sharp downsizing.

LOCAL UPDATE
There are still 1456 Covid-19 cases identified in New Zealand, with 5 new cases today and more than yesterday's +3 increase (net zero). Seventeen people have died, one more than yesterday, all geriatric patients. There are now 8 people in hospital with the disease, with one in ICU. Our recovery rate is now up over 75% and rising.

AUSTRALIA UPDATE
We need to fess up to using out-of-date official data for Australia. The infection and death data has been correct, but the recovery data was incomplete. We were using the JHU source (below) but there is a more direct official source. That shows their official recovery rate at just under 76% today. (H/T BdB)

GLOBAL UPDATE
Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 2,707,400 and up +81,000 this time yesterday which is an unchanged rate from yesterday. Now, just over 32% of all cases globally are in the US, which is unchanged in a day, and they are up +27,500 since this time yesterday to 868,400. This is a faster rate of increase. Just over 9% of all US cases have recovered so far, which is only a marginal improvement. Sweden (everyone's favoured control) is now reporting 16,750 cases and 2021 deaths ina population of 10 mln. Neighbours Norway and Denmark are reporting deaths of 194 and 394 for populations of 5.4 mln and 5.8 mln respectively. Finland is reporting 172 deaths in a population of 5.5 mln.

THE AUSSIE IMPACTS
The RBA has issued an update of the pandemic's economic cost to Australia. They say "National output is likely to fall by around 10 per cent over the first half of 2020, with most of this decline taking place in the June quarter", "Total hours worked in Australia are likely to decline by around 20 per cent over the first half of this year", and "The unemployment rate is likely to be around 10 per cent by June".

FORGET BLNS, IT'S TLNS NOW
In Europe, leaders have unexpectedly agreed to a €1 tln collective rescue for Europe's free-falling economies as key data showed much larger declines than in the GFC. That comes after the US Congress agreed an almost US$½ tln addition to their support measures, taking them up to US$3 tln. And Japan has rushed through additions taking their support package to US$1.1 tln.

EQUITY UPDATE
The NZX50 is level-pegging today. The ASX200 is doing better, up +0.8% so far. Shanghai, Hong Kong and Tokyo have all opened lower today catching the fading New York mood. The S&P500 ended its session unchanged, giving up earlier gains that topped +1.6% while EU bourses were actually higher by almost +1%.

SWAP RATES UPDATE
Yesterday, swap rates basically held the whole curve even if slightly soft at the short end. 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 is down another -1 bp to 0.31%. The Aussie Govt 10yr is firmer, up +3 bps to 0.89%. The China Govt 10yr is down -3 bps at 2.54%. The NZ Govt 10 yr yield is down -5 bps at just under 0.85%. The UST 10yr is down -6 bps from this time yesterday to 0.59%.

NZ DOLLAR SLIPS
The Kiwi dollar has hovered around 60 USc today, up strongly from yesterday and now at 59.9 USc. Against the Aussie we are unchanged at 94.2 AUc. Against the euro we are much higher at 55.7 euro cents. That means the TWI-5 has risen +60 bps to 66.3.

BITCOIN FIRM
The price of Bitcoin is up +5.3% to US$7,517. The recent rise is ahead of the expiration of CME April futures contracts. 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 ».

Our exchange rate chart (including bitcoin) is here.

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57 Comments

by Mr T | 24th Apr 20, 4:06pm 1587701192

ICYMI: "Truly bad things are coming down the pike and Labour lacks the depth of political talent required to deal with them" https://bowalleyroad.blogspot.com/2020/04/deposing-simon-bridges-would-…

by Glitzy | 24th Apr 20, 4:14pm 1587701689

Simon Bridges ain't the answer to anything. National need to dump the China sell out and become a credible opposition again.

by Smalltown | 24th Apr 20, 4:40pm 1587703209

Who's this Simon Bridges guy now that Key has given him the evil eye.?

https://thedailyblog.co.nz/2020/04/23/watching-john-key-horrifically-un…

by Kezza R | 24th Apr 20, 5:34pm 1587706479

Lol Paula Bennett a leadership contender.
From what I hear from people who have worked for her.... bad idea.

by Tim Depositor | 24th Apr 20, 4:18pm 1587701902

National benches are a rump of former talent as such as it was. We would be in austerity measures under National making things so much worse. Selling land to billionaires, and little else.

I'm glad Robertson and Orr are guiding the country in these days.

by Foyle | 24th Apr 20, 6:26pm 1587709581

The coalition are hopeless at everything except espousing good intents. National are Keynsians same as every govt that can afford to be. 60Billion borrowed over 5 years to pull NZ through the GFC+Earthquakes, but unlike Labour they keep their eye on improving NZ's long term economic position rather than the short term party long term pain of Labour's wasteful spending and mismanagement that has been driving NZ economy down. We can be very thankful that National fixed Labour's mess (huge structural deficit + recession), grew GDP spectacularly and reduced unemployment to historic lows or we would be in far worse shape now.

by wirehunt | 24th Apr 20, 6:39pm 1587710398

Oh yeah that worked great. Hocking the country off to anyone with a few bucks worked so well for us, a lot like work visas are a fantastic idea.....said no one ever except for a few nats and act.

by Independent_Observer | 24th Apr 20, 6:44pm 1587710676

So the coalition caused the GFC and now this?

Have you ever not voted National?

by Lanthanide | 24th Apr 20, 11:03pm 1587726186

NZ entered recession in 2008 before other countries did.

Because of drought. Foyle blames the weather on Labour.

by Tim Depositor | 24th Apr 20, 8:59pm 1587718752

I rely on the views of economists. Wealth protection policies for those with it already is fine as a political strategy, but not for long term economic productivity.

by Glitzy | 24th Apr 20, 4:06pm 1587701204

Global Economic Outlook from Fitch Ratings headlined Unparalleled Global Recession Underway, was accompanied by a commentary by Brian Coulton, Fitch Ratings Chief Economist. "World GDP is now expected to fall by 3.9% in 2020, a recession of unprecedented depth in the post-war period,". "This is twice as large as the decline anticipated in our early April GEO update and would be twice as severe as the 2009 recession."

by Henry_Tull | 24th Apr 20, 4:10pm 1587701410

IMF too

The IMF believes New Zealand will see the biggest fall outside of Europe, except for Venezuela, an economy already in freefall.

https://amp.theaustralian.com.au/news/latest-news/the-great-lockdown-sh…

by Yvil | 24th Apr 20, 4:36pm 1587702966

Title "The 'Great Lockdown' shrinks NZ economy" who would have thought?

by Fritz | 24th Apr 20, 4:57pm 1587704278

Need to move to level 2 ASAP, Yvil.

by Kezza R | 24th Apr 20, 5:50pm 1587707427

Title.
History showed the second wave killed the most, we didnt listen!

by Homer | 25th Apr 20, 8:51am 1587761499

21?

by frazz | 24th Apr 20, 4:57pm 1587704252

Let me guess the IMF wanna give us a loan? (No strings attached..honest)

by youngdumbandbroke | 24th Apr 20, 6:52pm 1587711141

The original loan shark

by Korki | 24th Apr 20, 5:38pm 1587706730

What is IMFs record for getting predictions right? I.e do we believe this?

by Kezza R | 24th Apr 20, 5:52pm 1587707542

I'll take a wild guess that these stats are done without thought for a second wave of infections that kill younger people.

by Lanthanide | 24th Apr 20, 11:10pm 1587726637

Which you shouldn't expect, since the 1918 flu appears to have been singularly unique in that respect.

by Rosenstein | 24th Apr 20, 9:10pm 1587719408

MAVA!

by Yvil | 24th Apr 20, 4:29pm 1587702570

I admit knowing very little about bitcoin. I'm somewhat surprised that a commodity (can we call it that?) with no current use in the real world (correct me if I'm wrong) has held its value quite well over the last month

by bw | 24th Apr 20, 4:42pm 1587703373

All you need to know is that it is just like any other speculative asset; be that shares, paintings or tulips.
You buy it because you think someone else will pay more for it later on, and you sell it if you think others will want to sell in the near future - timing being crucial of course. And the most important thing to know? Don't get caught with it when it falls. You can survive 'not having it' if the price rises, but may not if the reverse happens.

by Farce Majeure | 24th Apr 20, 5:30pm 1587706240

-Bitcoin has a fixed supply, there will only ever be 21 million units. No central bank can inflate the supply.

-It currently costs around $7000 usd worth of electricity to produce a single bitcoin (as opposed to keystrokes by central bankers to produce more fiat currency).

-Bitcoin is protected by the largest, most decentralized computer network on earth.

-Bitcoin transactions are censorless, permissionless, with no third-party involvement and are generally very fast.

-Bitcoin can be exchanged for local currency in almost any country on earth.

-If held securely on your own off-line storage device, bitcoin cannot be confiscated by governments, courts, police, customs agents, ex-spouses, etc. You can carry an unlimited amount of bitcoin on a thumb-drive sized device and walk through any airport in the world--try doing that with more than a few ounces of gold or more than 10k worth of fiat.

-Anyone who has ever bought and held bitcoin (not counting a few months in late 2017 and late 2019) is very well up on their investment.

It may ultimately succeed, or it may not. But it doesn't take much imagination to see some value in the above attributes.

"We can't have a good money again before we take the thing out of the hands of government, that is, we can't take it violently out of their hands. All we can do is by some sly roundabout way introduce something the can't stop" - Friedrich Hayek

by Pragmatist | 24th Apr 20, 6:05pm 1587708334

And at the end of the days, its still just electronic 1 and 0s. Won't feed you, wont keep you dry and warm, doesn't produce an income, can't even turn it into pretty baubles like gold or silver, not backed by any government.

by J.C. | 24th Apr 20, 6:16pm 1587709001

And at the end of the days, its still just electronic 1 and 0s

As is most of the currency you have. Compared to the amount of "digital fiat", there will only ever be 21 million bitcoin.

by Pragmatist | 24th Apr 20, 8:01pm 1587715301

one is backed by the government of NZ, the other?

by Pragmatist | 24th Apr 20, 8:01pm 1587715302

one is backed by the government of NZ, the other?

by bw | 24th Apr 20, 6:42pm 1587710571

And there will ultimately be only 84 million litecoins and only 21 million bitcoin-cash and of course and an unlimited amount of ethereum and....on it goes...

by Nzdan | 24th Apr 20, 7:05pm 1587711902

And Dogecoins.

by J.C. | 24th Apr 20, 7:19pm 1587712740

And there will ultimately be only 84 million litecoins and only 21 million bitcoin-cash and of course and an unlimited amount of ethereum and....on it goes...

I guess that means you're suggesting that they're all the same.

by rastus1 | 24th Apr 20, 9:23pm 1587720214

Btc. Con job that will eventually return to its inherent value of nil. But these good young things think us old farts just don’t get it!
Relies on the greater fool.

by J.C. | 24th Apr 20, 6:26pm 1587709585

You can survive 'not having it' if the price rises, but may not if the reverse happens.

If you can't afford to lose "everything", don't invest in Bitcoin. However, it's still one of the better perforning asset classes in 2020.

by frazz | 24th Apr 20, 4:58pm 1587704330

It can be used to settle a contract any where in the world in seconds - no middleman involved...

by J.C. | 24th Apr 20, 6:17pm 1587709077

It's also much more traceable than fiat currency.

by Lanthanide | 24th Apr 20, 11:12pm 1587726739

If "by seconds" you mean at least ten minutes. And typically 30 to 60.

by wirehunt | 24th Apr 20, 11:59pm 1587729553

Where as by bank it could be a day or two or several.more. Even in this day and age.
Work that out.

by Pietro | 24th Apr 20, 6:48pm 1587710929

You do mean gold?

by Smalltown | 24th Apr 20, 4:30pm 1587702617

https://i.stuff.co.nz/travel/news/121180751/beach-lodge-offers-discount…

I think this ones an example of "if you are not sure, it's probably a no"

by Audaxes | 25th Apr 20, 7:29am 1587756581

The NZ Govt 10 yr yield is down -5 bps at just under 0.85%.

Nice long weekend present for the rentier bond trading cohort.
Yesterday, Treasury issued $350m of the 2.75% 15/04/25s @ 0.4743% - clean price $111.15 per $100 face value.
Today, RBNZ scoops up $150m of the 2.75% 15/04/25s @ 0.4280% - clean price $111.39 per $100 face value.
Both settle 29/04/20.
Taxpayer books a $16.725 million loss if the RBNZ holds the notes to redemption and services the coupon payments from taxation - which enables the whole shambles known as QE for the benefit of a tiny minority.

by Justa comment | 24th Apr 20, 4:58pm 1587704338

BNZ TD 18 months now the last chance to get 2.65% with WBC highest now 2.45%. I think BNZ will join them next week. Meanwhile over in guaranteed deposits land australia theres nothing over 1.01%. (I only include banks with A ratings in these comments)

by bw | 24th Apr 20, 6:48pm 1587710898

I'm not sure most understand what the implication of tieing up cash for 18 months at a gross 2.65% p.a is.
A clue - it's not inflationary........

by Glitzy | 24th Apr 20, 5:27pm 1587706027

Sweden closes confucius institutes.

https://hongkongfp.com/2020/04/24/gothenburg-axes-twin-city-agreement-w…

At last. When do we do the same ?

by RickStrauss | 24th Apr 20, 5:43pm 1587706991

This is a very interesting lesson: https://www.youtube.com/watch?v=fFqg8ZNtUlc

by Lapun | 24th Apr 20, 6:11pm 1587708691

Thank you for the link. What chance that lady will come to NZ and stand for parliament?

by Pietro | 24th Apr 20, 6:47pm 1587710820

Useful story on Stuff at the moment, detailing which people are most at risk. Why couldn’t this have been made available earlier?

https://www.stuff.co.nz/national/health/coronavirus/121263295/coronavir…

Herald has some b******t overseas story about Trump saying “inject disinfectant”, which is an obvious beat up. The Herald’s approach has been tabloidish and frankly, unhelpful IMO.

by Fritz | 24th Apr 20, 7:23pm 1587713029

Would you expect anything else from that rag?

by powerdownkiwi | 24th Apr 20, 7:29pm 1587713380

https://www.bbc.com/news/world-us-canada-52407177

You don't need a beatup where Trump is concerned. He makes George Dubya look positively Mensa material.

The worry isn't that drongo's like him exist - distribution being what it is - but that 50% of America voted for it. That's the scariest thought on the planet.

The second scariest thought is all those wide-eyed believers who think that growth was (a) possible forever and (b) coming again.

by printer8 | 24th Apr 20, 7:39pm 1587713990

PowerdonKiwi
Agreed that it is a worry that 50% of Americans voted for him. I look differently at Americans now.

by printer8 | 24th Apr 20, 7:59pm 1587715195

Pietro
Your comment amazes me.
You clearly think the NZH report not credible and absurd - then you have clearly have not seen Trump’s press conference; his comments regarding injecting disinfection into the lungs were definitely not credible and absurd.
NZH is not upbeat at all - YouTube his press conference.
Seen a clip of Birx’s reaction - she looked totally aghast.
But there again you are likely a die hard Trump fan and not interested in the truth by verifying the situation.

by powerdownkiwi | 24th Apr 20, 7:55pm 1587714925

Goes with the territory y'all.

https://www.youtube.com/watch?v=TkU1ob_lHCw

enjoy :)

by Hans Brink | 24th Apr 20, 9:22pm 1587720144

Yeah thats pretty cool

by Henry_Tull | 24th Apr 20, 11:56pm 1587729416

Printer8, too funny, he is talking about the use of UV light as a disinfectant.
He just described a UV light endoscope.

https://youtu.be/QtgVxGkrX1Y
Now watch the clip again.

There is a great uv light tote bag you can get, has uv diodes, in 3 minutes it disinfects your phone, glasses, keys, pens etc.
You should get one.

by Randomman | 24th Apr 20, 7:53pm 1587714833

Yeah pietro, heres another useful stuff article about those great leaders who are showing us the way (not to do it)
https://i.stuff.co.nz/national/health/coronavirus/121235256/trump-joins…

by Fritz | 24th Apr 20, 10:49pm 1587725393

Interesting article on covid-19 form a Swedish Genetic Epidemiologist:

https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12327…

by Keen Observer | 24th Apr 20, 11:07pm 1587726441

Dynamic assertions into NZ economic philosophy need to be changed from static believe of forever wealth creation. Nature has thought us in order to walk straight or changing directions, we ought to use both feet, we can tip the left or right leg movement to be more pronounced in order to achieve desired destination. Every ruling elites of the day need their own balancing, Kiwis loves to walk in circles every 9 years in the dark. Unfortunately, we've been caught in the day time now. Heat, thirst, predator, tired,.. oh missed my RE location.