Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
China Construction Bank became the third local bank to push fixed mortgage rates below 3%, with a 2.80% one year 'special', and a 2.85% two year 'special'. They also cut their floating rate by -50 bps to 5.00% but that is not especially competitive.
TERM DEPOSIT RATE CHANGES
BNZ continued the trend of banks cutting TD rates by small amounts and regularly. The declines are adding up fast.
SHARP VOLUME DROP
Barfoot & Thompson's sales volumes halved in April compared to March but there's probably worse to come because many of these completed transactions were started in March. But prices only dropped slightly in the month. New listing levels were very low too.
SHARP PROFIT DROP
Westpac NZ half-year net profit tumbled -44% as loan impairments and expenses rose and income fell.
TURNBULL RETURNS
Tower Insurance has appointed New Zealander Blair Turnbull as its new CEO. Turnbull was most recently with Aviva Group in London. Prior to that, he was Executive General Manager, Wealth and Insurance at ASB Bank.
UNCHANGED
Standard & Poor's has confirmed New Zealand's sovereign credit rating as AA, with an outlook as 'Positive'. It said: "New Zealand's monetary flexibility, wealthy economy, and institutions are conducive to swift and decisive policy actions and support the ratings positive trajectory."
LOCAL UPDATE
There are 1487 Covid-19 cases identified in New Zealand, with zero new cases today on a net basis (+1 on a confirmed basis), down from +2 yesterday. Today's one was outside a confirmed cluster. Twenty people have died, unchanged from yesterday, almost all geriatric patients. There are just four people left in hospital with the disease (-4), and none are in ICU. Our recovery rate is now up over 86% and rising.
AUSTRALIA UPDATE
In Australia, there are now 6801 cases (+34 since Friday), 95 deaths (+2) and a stable recovery rate of just over 85%. 75 people are in hospital there (-8) with 28 in ICU (unchanged). The Aussies are having issues with cases at meat processing plants (+19).
GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 3,506,700 and up +31,000 from this morning which is an unchanged level of growth. Now, just over 33% of all cases globally are in the US, which is up +15,000 since this time yesterday taking the total to 1,147,900 and the only country to exceed 1 mln cases. This is also an unchanged level of increase. US deaths now exceed 68,000. Global deaths are about to exceed 247,000. Another country we haven't mentioned before that is in trouble is Canada, and they will be the next to pass China's infection rate. Caseloads are rising there, and 3800 people have died there so far.
EQUITY UPDATE
The Aussie equities market is up +0.8%, a faint shadow of the -3.8% fall on Friday. The NZX50 Capital Index is down -0.5% near the end of trade today. Shanghai is on holiday again today. Hong Kong has returned, but is falling hard today, down -3.7% in late morning trade. Tokyo is also on holiday today and probably pleased it is. All eyes will be on New York overnight and the rush of earnings reports this week.
SWAP RATES UPDATE
Local swap rates opened the week at new record lows after sharp falls on Friday. The two year started today at 0.19% and -10 bps lower in a week. The five year at 0.33% and -13 bps lower in a week. The ten year at 0.72% and -14 bps lower in a week. 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 unchanged at 0.26%. The Aussie Govt 10yr is down -2 bps at 0.84%. The China Govt 10yr is unchanged at 2.52%. The NZ Govt 10 yr yield has fallen another -5 bps to just 0.57% and now well below both the equivalent Australian and American rates. The UST 10yr is unchanged from this time yesterday at 0.62%.
NZ DOLLAR SOFT
The Kiwi dollar has given up some of its recent gains, now back to 60.3 USc. But against the Aussie we are little-changed at 94.3 AUc. Against the euro we are sharply lower at 55.1 euro cents. That means the TWI-5 is down to 66.2 and only a minor fall from this morning's open.
BITCOIN SLIPS
The price of Bitcoin is down -1.1% from this morning's open to US$8,751. 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 ».
51 Comments
it is amazing how its around ten years each time but you never know what will cause it from dot com burst, to GFC to covid 19,
and you can tell old someone is by their first crash that effected them, i remember the oil shock when i was a child and carless days
but my first real one was black Monday and the aftermath of that , a mate telling me to get my money out of the BNZ before it went belly up and being young and naïve not listening and telling him its all good it can not crash as the government owns it , next minute money pumped in and sold
https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_mar…
hopefully we will be smart,
aussie are spending 300 million on developing hydrogen, we have more water than them and geothermal to use to create, hopefully our government will look at us becoming an exporter of hydrogen as that will be the future for large transport, there is an industry there waiting to be created that we could excel at
Ah. no. Being smart would be good, but developing hydrogen and being smart are mutually exclusive.
The EROEI (sorry to those who have heard it often - Energy Return on Energy Invested to those who haven't) of hydrogen is so bad it may well be negative.
Add to that the storage required........... ain't gonna happen. And I champion renewables, live off-grid and energy-efficiently, with no particular product to promote or axe to grind.
The Aussies would be smarter doing solar/steam/electriity - it's low tech and known tech. The Moore film (which made many valid points re energy return) missed that the mirror plant merely failed commercially, not physically. And I use stainless as a mirror.......
I think we can - ex corporate BigAg - produce enough biodiesel to keep our needed tractors/trucks going. Known tech, local tech, existing machinery.
before you right it off , we have a power station at the bottom of the south island suppling tiwai which we all subsidize and that same power station pumps fresh water out to sea.
we would be much better off using both that power and water to create an export
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=1293791
gee, big question.
Depends what you define as 'recovery'...
Let's use GDP - flawed as it is.
I don't think our GDP will recover to what it was pre-lockdown in the next 5 years at the very least.
If we have some luck, implement good policy, and get effective treatment and/or vaccine in the next 18 months then we *might* get back to 90% of pre-lockdown GDP by 2023.
But a lot of buts, if's and maybes in that.
The thing is, despite what some people say, what the government does or doesn't do in the next 6 months will have a massive bearing on the recovery.
But I wouldn't count on the current clowns getting things right.
Jacinda Ardern to join Australian national cabinet on Tuesday
Good odds that NZ picks you the Australian APP. - MoH taking too long.
Sky news.
https://youtu.be/5pcXsQzw0ZE
You tube commentators, can't tell if they are Oz or Kiwi.
From Bloomberg :- oil companies have to deal with a new normal
So let’s make a guess about the loss in future demand. Let’s assume the loss is about 5-million barrels a day. That doesn’t sound like too much; it’s about 5% of 2019’s global oil demand. The drop in worldwide oil consumption in April has been put as high as 35-million barrels a day, and forecasts estimate 2020 oil use will be 10-million barrels a day (or 10%) lower than in 2019.
Sure, many of us will return to our pre-Covid-19 ways of life just as quickly as we can, but others will gladly give up the daily commute in favour of working from home more often — and employers may be happy to accommodate their wishes. After months of successful teleconferencing, those business trips that helped keep planes full of high-paying travellers may also come under more scrutiny. These changes may push up electricity use while they dampen fuel demand, but that will do little to help the oil industry, which is struggling to hold on to its fragments of the power generation sector.
Of course, we could collectively shrug off this latest crisis, just as we did the financial crash of 2008-2009, which was consigned to history with barely a backward glance. But the global pandemic feels different from the financial crisis. It hits at our physical wellbeing as well as our financial health, and it has forced us all, to one degree or another, to adopt new ways of living and working, whether we like them or not.
The industry can survive a 5% drop in long-term demand, but it will find it much harder to thrive.
A loss like that will cause structural overcapacity, right through the oil supply chain. There will be too many wells to get oil out of the ground, too many ships to move it, too many refineries to process it.
Society did not leave the GFC without a backward glance. Some of us didn't even call it with the F, just calling it a GC.
Since then, steroid injection has kept the patient alive - more debt injected than real work done, a widening spread. So it was due to implode anyway.
The problem is that the remaining oil energy takes more energy to obtain, that past options did - sequentially more. To an extent, that reflects in cost, also int he ability to turn a profit. Even with Govt backing, tar-sands had trouble and fracking seriously burned cash. We simply cannot afford ourselves any more, in energy terms.
In terms of infrastructure, the talk was, even a decade ago, that there was no point in building new refineries. The same probably applies to tankers, and I wouldn't be a shareholder in a pipeline company if you held a gun to my head. A bit like buying a blacksmith's in say 1935.
aussie has 96 deaths and the meat works in Vic is cedar meats, shows how one case can blow out (34 cases) before it gets found
https://www.news.com.au/national/victoria/news/coronavirus-melbourne-ce…
We have just entered month 5. We spent the first 2 months like possums in the headlights before belatedly jump starting the response half way through month 3. We spent most of month 4 still in shock I think. Just as well the weather was nice. Month 5 has begun, so where to from here? As it's both global & local there are probably a couple of answers. The Aussie-Kiwi bubble sounds interesting. Let's hope it's got some legs. From our friends in the far West things don't look so rosy. They've well & truly been China'd. Let's hope there are some cool heads being heard by our/their gov'ning elites. As for the university modelers? Pass.
"Hydroxychloroquine treatment is significantly associated with a decreased mortality in critically ill patients with COVID-19 through attenuation of inflammatory cytokine storm. Therefore, hydroxychloroquine should be prescribed for treatment of critically ill COVID-19 patients to save lives."
https://www.medrxiv.org/content/10.1101/2020.04.27.20073379v1
"We also urge journalists and other individuals who report on medical research to the general public to consider this when discussing work that appears on medRxiv preprints and emphasize it has yet to be evaluated by the medical community and the information presented may be erroneous."
More dubious posts from Profile?
Read an interesting article about Sweden today. Will be interesting to see how it all pans out but there was one point I did agree with and that is that lockdown is only going to delay the inevitable for most countries (we may get lucky and achieve total elimination with our ocean borders and small population but that isn’t an option for most countries). If there is no cure for 1.5 years or more the lockdown countries will be going in and out of lockdown constantly. The population will soon get sick of doing that. You have to wonder what the long term goal is? It seems the only countries that have a long term goal are NZ (elimination) and Sweden (herd immunity)
Agree totally Carlos. Nobody is commenting how poor our initial response was. Then we had to bring out the heavy artillery at the expense of the economy. Poor nats cant get a word in without getting lynched. They were screaming for quarantine of arrivals ages ago.
Agree totally Carlos. Nobody is commenting how poor our initial response was. Then we had to bring out the heavy artillery at the expense of the economy. Poor nats cant get a word in without getting lynched. They were screaming for quarantine of arrivals ages ago.
Its really down to a balance of how to you get herd immunity while not doing an Italy.
The reality is that we will all eventually get infected or inoculated, personally my preference is inoculation but for the community I think we should lockdown just elderly and high risk for 6 months while we let it spread through the healthy population which will eventually protect the others.
Daily Mail UK is reporting that Roche Diagnostics claims that it has created antibody tests kit that are 100 per cent accurate. Not as good as a vaccine but can define how big the herd is.
https://www.dailymail.co.uk/news/article-8282929/Antibody-tests-tell-mi…
Here is the analysis of where ICU beds are located through out the country.
https://www.rnz.co.nz/news/national/415774/icu-beds-increase-as-ministr…
This refers to MoE survey 26 March.
https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018740328/c…
Problem is there is no estimate range of what to expect planned for (est need) in L1 & L2.
Not great context either.
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