Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
BNZ rounded out the main bank home loan cuts. More here. NBS did so too.
TERM DEPOSIT RATE CHANGES
BNZ also cut most of its TD rates. Rabobank did so as well.
NOTHING BUT AWFUL
April’s factory PMI was never going to be anything but awful. And so it was. With various lockdown rules in place through the month, the index fell to its lowest ever level at 26 (50 is neither expansion nor contraction). This is less than half its 53 expansion norm and materially below the previous low of 36 recorded in November 2008 during the GFC. (For perspective, Australia's factory PMI in April was 44, and the US's was 36. Our almost complete shutdown tells the tale.)
VOLUMES SCARCE, PRICES WEAK
House sales slowed to trickle in April, down -80%, and median prices were also weaker in most regions, the REINZ reported.
ALMOST FREE MONEY
Investors (including the RBNZ?) got out their cheque books for the three NZGB bonds tendered today. $1.05 bln was on offer and bids totaling $2.8 bln were received. The April 2023 bond ($500 mln) was won at a 0.08% pa interest rate, the April 2029 bond ($350 mln) was won at a 0.53% interest rate, and the April 2037 bond ($200 mln) was won at 0.98% pa yield. For the April 2023 issue you have to assume the main bidder was the RBNZ, but in the end there were 11 successful winning bids.
THE CHANGING FACE OF THE JOBLESS
There are many more - and new - people on our unemployment benefit, called JobSeeker Support here. MSD has been looking at where this surge has been coming from. Here are some highlights: 38,960 of new job seekers applied during the lockdown. 46% had little or no previous benefit history. compared to 26% last year. They were higher earners – those earning $585 a week or more outstripped those earning less or with no previous income. 4,718 were New Zealanders returning home as the virus swept the globe, compared to 424 last year – that’s a 10-fold yearly increase. 65% were NZ European, Other, or unspecified ethnic groups, compared to 48% last year. 45% were in their 20s, compared to 37% last year.
THE DOLE AND SUBSIDIES
As at April 3, $5.36 bln in wage subsidies were paid out to 876,218 people (747,315 employees and 128,902 self-employed). The average is $6,120 per person claimed. Given that there were 2,666,600 people employed at March 31, that means a third of all people in the workforce are on this subsidy. And in addition, 186,826 people are now receiving JobSeeker support which is 6.7% of the labour force. As at March, there were 124,000 people unemployed, so that is a jump in the jobless ranks of +60,000 during April.
LOCAL UPDATE
One additional case today in the Auckland Marist cluster. There are now 1498 Covid-19 cases identified as either confirmed or probable. Twenty-one people have died (unchanged). There are still only two people left in hospital with the disease (unchanged), and neither are in ICU. Our recovery rate is now just under 95% with 77 people known to be still infected (-9) and 62 of those are in 9 clusters. That means just 15 other cases are recovering in self isolation in the community (-3 from yesterday).
AUSTRALIA UPDATE
In Australia, there are now 6989 cases (+14 since yesterday), 98 deaths (unchanged) and an unchanged recovery rate of just on 90%. 50 people are in hospital there (+1) with 18 in ICU (+1). There are now 688 active cases in Australia (-16).
GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 4,441,600 and up +96,000 from this time yesterday, which is a rising level of growth. Now, just on 32% of all cases globally are in the US, which is up +27,000 since this time yesterday taking the total to 1,417,500 and the only country to exceed 1 mln cases. This is also a rising level of increase. US deaths have reached 86,000. Global deaths exceed 302,000. Both Canada and Mexico are struggling with containment although not to the same extent as the US.
FALTERING RESTART I
In China, retail sales in April were unexpectedly weak. There were down -7.5% in April when markets were expecting a lesser year-on-year fall and a larger recovery from March to April of +6.5% for the month. Chinese electricity generation and overall industrial production did rebound in April however. But the recovery probably isn't enough for Beijing, so markets are expecting more stimulus. But it could just be more debt stimulus.
FALTERING RESTART II
In Australia, major building and infrastructure supplier Boral is instituting shift reductions and temporary plant closures "to align production with current and expected lower levels of activity".
EQUITIES UPDATES
The S&P500 rose steadily during today's session on Wall Street to be up +1.2%. That means it is heading for a weekly -2.7% fall with one day to go. Frankfurt is down -5.2% heading into their Friday session, the FTSE100 is down -3.3% on the same basis, and the Paris CAC40 is down -6.0%. In Friday trading so far today, Shanghai is heading for a weekly -1.0% fall, Hong Kong is heading for a -3.8% fall, while Tokyo is looking at a -1.6% decline. Locally, the ASX200 looks like it will end unchanged while the NZX50 Capital Index might scrape in a +0.2% weekly rise.
SWAP RATES UPDATE
We don't have wholesale swap rates movement details today yet. We will update this later in the day if they show a significant movement. But yesterday, we recorded minor rises. The 90-day bank bill rate is down -1 bp to 0.27%. The Aussie Govt 10yr is up +1 bp to 0.91%. The China Govt 10yr is unchanged at 2.70%. The NZ Govt 10 yr yield is still rising, up another +4 bps to 0.65%. The UST 10yr is little-changed today at 0.63%.
NZ DOLLAR UNCHANGED
The Kiwi dollar is stable today, still at about 60 USc. Against the Aussie we are marginally lower at 92.8 AUc. Against the euro we are little-changed at 55.5 euro cents. That means the TWI-5 is still at 66.
BITCOIN FIRMER AGAIN
The price of Bitcoin is firmer at US$9,517 and up another +2.1% from this time on yesterday. 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 ».
Daily exchange rates
Select chart tabs
32 Comments
BBC Rick Bright: 'Ousted' vaccine expert says US is facing its 'darkest winter'. "Mr Bright also told the House of Representatives subcommittee on health "lives were lost" because of government "inaction" in the early stages of the outbreak." https://www.bbc.com/news/world-us-canada-52657815
China wants to 'cripple' Australia and 'hold our corpse up as an example'
https://youtu.be/hW0QC8EQJ2A
China on Monday threatened to place a close to 80 per cent tariff on Australian barley exports, under the guise of an 'anti-dumping probe,' giving the Australian government less than two weeks to resolve the issue.
The communist country has now chosen to suspend imports from four separate Australia abattoirs, one of which is actually Chinese owned.
Mr Murray said the next battle for Australians after dealing with the horrific bushfires and the ongoing health crisis, is "displeasing China, the cost of which could potentially be billions and many thousands of jobs".
"All of this is a 'get-square' because we - God forbid - said there should be an independent international investigation into the virus".
I've been putting the warning out but it seems everyone has been sold a great line with the virus hyteria and let this degradation of their civil rights slide right on by. One pollie on the job, however I'm not convinced he would do any different if in power. https://www.facebook.com/SimonOConnorMP/videos/296876708382981/
You are right Scarfie. People are listening tho and doing their own research. There is plenty of information available, from credible sources, about what’s going on. The problem is that the outrage that is building is not getting through to the power brokers, who continue to drive the fear campaign and use the ‘crisis’ to advance ideologically driven agendas. They thumb their snouts at the public, refuse to be transparent, refuse to allow the public to be consulted on hastily drafted legislation, then passed under urgency. The rules are pathetic and so are our masters. We need some honesty and accountability in our system, from all political persuasions.
People assume that this quote means Franklin was making an observation on the dichotomy between individual liberty and government power. However, this is not the case. In fact, when you look at the context of the quote, Franklin was defending the authority of the Province of Pennsylvania's legislature to govern in the collective interest as opposed to that of the Penn family, which did not want to acknowledge the authority of the legislature to tax.
'4,718 were New Zealanders returning home as the virus swept the globe'
That totally defeats the rhetoric of some of those spruikers saying all these kiwis coming home are going to boost house prices.
They won't.
Many of them don't even seem to have jobs, judging by these stats.
Not if they are anything like my son whose UK 2 year visa is close to expiring, and has little choice but to come home and try and find work even though for an MSc there's not likely to be much in his field. And of course any money he has saved has largely gone through sustaining himself on bare essentials after job loss over there.
Aussie retailers Myer and Solomon Lew have their landlords over a barrel. Myer is close to signing a deal under which the retailer will make lease payments equivalent to as little as 6 per cent of sales.
https://www.watoday.com.au/business/companies/it-took-a-pandemic-but-le…
Investors (including the RBNZ?) got out their cheque books for the three NZGB bonds tendered today. $1.05 bln was on offer and bids totaling $2.8 bln were received. The April 2023 bond ($500 mln) was won at a 0.08% pa interest rate, the April 2029 bond ($350 mln) was won at a 0.53% interest rate, and the April 2037 bond ($200 mln) was won at 0.98% pa yield. For the April 2023 issue you have to assume the main bidder was the RBNZ, but in the end there were 11 successful winning bids.
What makes you think the RBNZ would buy these issues directly from Treasury when it's LSAP operation is active in the secondary market.
I can certainly see a situation where successful bank dealer bidders in the 15/04/23 tender would actively swap it's 0.0772% yield at the next appropriate RBNZ QE window for cash reserves paying OCR at 0.25%
there is only 56 active people still infected not 77.
https://www.health.govt.nz/our-work/diseases-and-conditions/covid-19-no…
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.