Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Heartland Bank cut its reverse mortgage interest rate by -45 bps from 6.95% to 6.50%.
TERM DEPOSIT RATE CHANGES
Co-operative Bank made a set of TD reductions today, as did the Nelson Building Society. NBS also cut ist on-call account interest rates pretty hard, taking 'good' rates down to where the market is fallen to.
EXTREME LOWS
Full results of the ANZ business confidence survey for the month of April paint a grim picture - but marginally less grim than the preliminary results of the same survey released earlier in the month. In any event, they are still the worst on record.
TEMPORARY TAX RULES
The IRD has made a "temporary determination" during the work-from-home lockdown period that certain costs may be reimbursed without income tax implications for either the employee or employer. These rules are here. It is clear that these rules only apply if the employer chooses to make such payments.
TACKLING LOAN SHARKS WITH URGENCY
Parliament is moving to fast-track new laws tackling loan-sharking. Instead of coming into effect on June 1, they will take effect as soon as the law is passed (in the next few days). Essentially, it will mean borrowers can't be required to pay total interest more than the amount borrowed for "high-cost short-term loans", compound interest for high-cost loans will be banned, and fees will be limited to $30 unless it can be shown that costs are higher. "High-cost short-term" loans are loans with terms from 2 days to six weeks.
THE BIG BANKS HAVE CAPTURED MOST KIWISAVER ACCOUNTS
Morningstar's monitoring of KiwiSaver funds shows overall values dropped -$4.5 bln in the three months to March 2020, down to $59.1 bln. ANZ has the largest market share with 23.5% of all KiwiSaver funds, followed by ASB with 18.3%. Westpac holds third spot ahead of AMP, while Fisher
Funds sits in fifth spot. The six largest KiwiSaver providers account for approximately 80% of assets on the Morningstar database.
A ONE BRAND BAND
The latest Global Dairy Update from Fonterra reveals that the GlobalDairyTrade platform is now essentially only supported by Fonterra on the supply side. At the April 21 auction, 19,739 tonnes of the product sold was from Fonterra's and only 862 tonnes were from other suppliers. That is a 96% share. Despite this effective one-supplier basis, the platform still attracted 113 bidders at the last auction.
CHEAPER & MORE POPULAR
Another $800 mln was tendered today by Treasury in three bond series. Overall these received bids for $2.3 bln. Yields achieved for each of the three series offered were very much lower than at the previous equivalent tenders.
SUDDEN SPURT
Household deposits jumped a remarkable +$4.5 bln in the one month from February to March, reaching a new record high of $189 bln. The one-month jump was far, far higher that the +$2.6 bln that occurred in October 2008. Households clearly see bank accounts as safe places to park emergency funds.
DEBT CHANGES
Mortgage debt grew +7.1% in the year to March, exceeding $280 bln for the first time. Mortgage debt rose +$1.4 bln in one month. Business lending growth was also strong, growing +6.2%. But lending to the rural sector has stalled with no growth. Personal debt (credit card and personal loans) is shrinking, down to $16.1 bln and its lowest absolute level in 30 months.
LOCAL UPDATE
There are 1476 Covid-19 cases identified in New Zealand, with +2 new cases today, the same increase as yesterday. Nineteen people have died, unchanged from yesterday, almost all geriatric patients. There are seven people in hospital with the disease (+1), but none are in ICU. Our recovery rate is now up over 84% and rising.
AUSTRALIA UPDATE
In Australia, there are now 6746 cases (up +15), 89 deaths (+6) and a recovery rate of just on 84%, unchanged. 93 people are in hospital (-16) with 38 in ICU (-4).
GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 3,191,800 and up +76,000 from this time yesterday which is the same level of growth. Now, just under 33% of all cases globally are in the US, which is up +26,000 since this time yesterday taking the total to 1,038,500 and the only country to exceed 1 mln cases. This is also an unchanged level of increase. US deaths now exceed 61,000. Global deaths are about to exceed 227,000. The rise in new infections has reversed in Europe and there is a general tailing off - except in the UK where they are remaining worryingly high, and in Sweden where they have also leveled off at a high rate. Russia and Brazil are where the big increases are still coming from. China's recovery rate is now up to 93% but that still leaves it with 5500 active cases.
EQUITY UPDATE
The NZX50 Capital Index has lost some ground today after its recent strong showing, down -0.8% so far. Today, the ASX200 is up +0.8%. Overnight, the S&P500 fell -0.5% after European markets rose about +1.5%. At their opening today, Shanghai is up +0.4%, Hong Kong is up a minor +0.2%, while Tokyo is flat.
SWAP RATES UPDATE
Update: Swap rates fell today across the curve, and that took them to record low levels. 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. There were a few small rises yesterday in wholesale swap rates, clawing back a small portion of the prior days hard falls. The 90-day bank bill rate is up +1 bps from its record low, now at 0.27%. The Aussie Govt 10yr is also little-changed at 0.93%. The China Govt 10yr is also unchanged at 2.52%. The NZ Govt 10 yr yield has fallen again, today down -8 bps to 0.75%. The UST 10yr is unchanged from this time yesterday at 0.62%.
NZ DOLLAR GAINS MORE
The Kiwi dollar has risen again today, back to 61.3 USc. Against the Aussie we have also risen, to 93.7 AUc. Against the euro we are up at 56.5 euro cents. That means the TWI-5 is up to 67.2 and a six week high.
BITCOIN LEAPS
The price of Bitcoin is continuing is rather remarkable rise, up +17% from this time yesterday to US$9,164 in its current halving hype. 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 ».
36 Comments
The RBNZ put the rise in deposits down to the wage subsidy. Term deposits are down ... I am guessing people keeping funds in transactional accounts rather than reinvest them.
Its a bit presumptuous to say "clearly people see banks as the safest place to keep cash" when we in fact they have removed the option to take cash out!
Auckland rentals on trademe at 4,700 plus and continuing to rise with some real momentum now.
Without a lot of new participants flooding in and sadly some existing players suddenly financially strapped - who is going to help absorb all of these.
Probably a degree of downward price pressure coming to bear – and I imagine there will be existing tenants willing to go through the hassle of moving to pick up a more affordable but comparable living space.
Some newer landlords may be exposed to a situation they have never experienced before.
However – it’ll probably take a few months of stand-off for any paradigm shift to really become apparent.
If you're talking listings - around 4,450 at 30/04 2018 and 4,360 30/04 2019 – if I’ve deciphered my chicken scratchings correctly.
A couple of weeks ago it was maybe 3,500 – bit obviously meaningless under lock-down – and then again rising to maybe 4,000 last weekend with talk of imminent Alert 3.
The last few days have started to jump – as we start to enter something of a new normal.
Should Alert 2 turn up (hopefully) as expected I imagine the flurry of listings will continue.
it is hard for low paid tenants to move to a cheaper place, the new bond is the hinderance to come up with so locks people in .
that needs changing so the TT can transfer your bond and allow more freedom to move, of course if not all the bond is to be transferred then the tenant would have to top it up and even that could be structured on a weekly payment scheme
but you dont get the bond back until you have moved out and you have to come up with a new bond before you move in so for the people at the bottom the only chance they have of moving is by either borrowing some money or selling something to come up with the funds, had a fellow employee this happened to she got locked into a more pricy rental for an extra 12 months before she could come up with the funds to be able to move to a cheaper rental. she was a good tenant so got all her bond back from the TT a couple weeks after moving out but the new landlord wanted it up front before moving in.
so unless you have the money you get locked into a rental
its time the government made it easier for people to move,
https://www.tenancy.govt.nz/rent-bond-and-bills/bond/refunding-bond/
Meanwhile...Invercargill KFC has had to close its two stores as they have run out of chicken ;-) https://www.stuff.co.nz/life-style/121359222/invercargill-experiencing-…
We sold a few things this week, everybody seems quite keen to get back at it..great to see some outgoing invoices rather than just incoming.
But am a bit disappointed we did not make mask wearing compulsory when dealing with other people at this level 3. Spoke to a few people about it whilst out and about and only a few thought it a good idea, most were anti mask wearing.
At this point i would say there was a 50/50 chance we will be back at level 4 within 2 months.
Riots on the streets if level 4 reimposed. Iwi checkpoints, Waikato River Rahui, Australia’s superior strategy, arbitrary decisions re recreation, mental health issues as detailed by prof Gluckman, unemployment, huge debt pile, rushed wage subsidy, the idiot Health Minister. We need pragmatism, not statism with closet socialists pulling the strings. A ‘close everything solution’ is so easy for public servants and others with no skin in the game. I went out for a drive on Tuesday, essential of course, and almost wept with joy when I saw traffic queuing at the traffic lights again. Small things matter so much...
And don’t forget that 6.9999 billion of the worlds 7billion hasn’t been killed by Covid. It ain’t the Spanish Flu, not even close.
Yes, but have you noticed how often Bloomfield has recently been ruling out ‘probables’, saying it’s now been found they have another illness, most likely flu? And again, the annual flu deaths toll can be as high as 650,000, according to WHO, mostly in over 65s. Hmmmm.... our very low hospitalisation rates are odd too, much, much lower on a pro rata case basis than much of the US or UK, or many other countries for that matter. I read that the Mississippi region has a 31% hospitalisation rate.
Tomorrow's headlines:
"France plunges into recession"
"Lloyds Banking Group's profits have plunged 95pc"
"Shell has cut its dividend for the first time in 80 years"
"A drug, Remdesivir, which doctors hoped would offer the first treatment for coronavirus does not help recovery"
"Fed warns of lasting ‘medium-term’ economic damage"
"UN warns more than 1bn informal workers to face poverty'
I guess it all adds up to one thing - Buy!
"current halving hype" - You may call it "hype" David, but it's coming to a BTC-Node near you .. this May :)
The amount of Bitcoin mined over the next 4 years will be half of that mined over the previous 4 years.
12.5 Bitcoin a currently mined every 10 mins. That will be reduced to 6.25 Bitcoins every 10 mins. Provided demand doesn't diminish, the price of Bitcoin should increase significantly
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