Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
ANZ cut almost all its fixed mortgage rates, including taking their one year fixed rate down to 2.79%. TSB followed. SBS Bank also cut rates, including a 2.99% one year rate..
TERM DEPOSIT RATE CHANGES
ASB cut term deposit rates today by between -10 and -20 bps across the board. When rate levels are this low, cuts of this magnitude qualify as 'significant'. ICBC and Kookmin Bank also made significant term deposit rate cuts. TSB have cut term deposit rates too.
DIVE, DIVE
Credit card spending crashed in April (of course), down more than -$1.5 bln from March, and down almost -40% from the same month a year ago. That means that the balances owing took a dive as well, down by -$1.1 bln at the end of April from the end of March, and down -20% from the level in April 2020. Early indications (March) are that credit card customers are not letting the balances incurring interest rise, but we won't get a proper fix on that until the May data is available in June. More here.
HOT DEMAND, LOW RATES
Another very large offer of NZ Govt bonds today with a three-part tender. They offered $500 mln for April 2025s and that drew $1.6 bln in bids. The resulting yield was just 0.22% pa. They offered $350 mln for April 2027s and that drew almost $1.1 bln in bids, resulting in a yield of just 0.37% pa. And they offered $300 mln of April 2033s drawing $600 mln in bids and bringing a yield of just 0.73%. All these yields are sharply lower that at the prior tenders just two weeks ago. All up, $3.3 bln was chasing just over $1.0 bln on offer.
HARD TO FORECAST
Fonterra has revealed its level of uncertainty over the milk price for the new season. It says that is due to unusual global uncertainties. It's mid price for current season is now set at $7.20; earnings for current year still picked to be between 15c-25c a share. Full perspective is here.
LOCAL UPDATE
We now have had ten straight days where there are no new cases. The total is still 1503 Covid-19 cases identified as either confirmed or probable. Twenty-one people have died giving a death rate of 1.4%. There is only one person left in hospital with the disease, and they are not in ICU. Our recovery rate is now just under 97%, with only 30 people known to be still fighting the infection (-5).
AUSTRALIA UPDATE
In Australia, there are now 7081 cases (+8 since yesterday), 100 deaths (unchanged) and a recovery rate of just on 91%. 43 people are in hospital there (-2) with 9 in ICU (-3). There are now 535 active cases in Australia (37).
GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 4,995,700 and up +98,200 from this time yesterday. Now, just 31% of all cases globally are in the US, which is up +23,000 to 1,551,700. US deaths are now exceed 93,000. Global deaths now exceed 328,000.
"TIME TO USE YOUR BUFFERS"
The head of the RBA is calling on Aussie banks to run their "large capital and liquidity buffers" down, previously built up for operational resilience, to assist the central bank and fiscal authorities meet the challenge of the recession starting to bite there. Depositors might have a different view. And so might credit rating agencies.
GETTING HEATED
The Australia:China trade tiff is getting serious. China has changed its inspection procedures for iron ore imports under new rules that analysts say could be used to block Australia's most important export. The Americans aren't helping, cheering the Aussie and jeering the Chinese from the sidelines. China notices.
EQUITIES UPDATES
Earlier today, the S&P500 ended its session up +1.7%. Prio to that, European equity markets were also up, generally more than +1%. At their open today, Shanghai and Hong Kong are marginally higher, Tokyo marginally lower. The ASX200 is heading for an unchanged session while the NZX50 Capital Index is losing steam and looks like it will close -0.1% down after rising +0.5% earlier.
SWAP RATES UPDATE
We don't have wholesale swap rates movement details today yet but early suggestions are that they have firmed marginally. We will update this later in the day if they show a significant movement. The 90-day bank bill rate is marooned at its record low 0.25%. The Aussie Govt 10yr is -2 bps lower at 0.93%. The China Govt 10yr is also down -2 bps at 2.70%. The NZ Govt 10 yr yield is also lower, down -4 bps at 0.63% although earlier the RBNZ fix was up +5 bps to 0.70%. The UST 10yr has slipped back to 0.66% today and down -3 bps..
NZ DOLLAR UP
The Kiwi dollar has held on to all of its sharp recent gains to be now up at 61.3 USc. Against the Aussie we are also marginally higher at 93.4 AUc. Against the euro we are firm at 55.9 euro cents. That means the TWI-5 is up at 67.1.
BITCOIN SOFT
The price of Bitcoin is lower by -2.9% at US$9,476. 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 ».
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52 Comments
Ardern looks at 4 day week.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
Dibert has you covered
https://www.youtube.com/watch?v=S4Bavp0mHvQ
I don't see that here;
try this you can see the difference in there deaths compared to their neighbours , its double and their rate of infection is putting them on track to reach the top
https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda759…
Spain, France, UK, Italy and Belgium have higher death rates than Sweden. I don't think you can have a "death rate per capita" can you? (edit: I guess you can if you use a number like 0.00039)
They are facing recession largely because half of Sweden's GDP comes from exports and everyone around them has come to a standstill.
I haven't seen any reports of regrets as it is early days yet and they are going for herd immunity.
Here is a fairly well balanced piece from a few days ago:
https://youtu.be/0UvFHDaVRQo
She did great. And she's full of good ideas. Just have another holiday. I'm happy to pay for my employees another day doing nothing. And now we pay even more since 1 April. I'm really looking forward to see what the next idea is, we need plans I say. But she has no example of what other countries do, she is lost.
Ardern and her government are devoid of any good business ideas as they have no success whatsoever with business.
Very easy to close a country and make it broke but a lot harder to get it back to prosperity.
Any are going to learn that we were locked up far too long for no benefit whatsoever!
You do realise that people can disagree with your view without being envious?
Imagine if a prostitute were to tell tell me I’m envious of they money they’ve made while they’re carrying venereal diseases due to their business practises, well it’s just no so. Similar with landlordism.
Yep. Zombie industry. Most wouldn't last 30 seconds trying to run a real startup. In fact it's not uncommon for Boomers to take out a business loan against their property inflation gains, based on misplaced confidence that they 'understand business,' and then fail miserably trying to do the real thing.
Another billionaire saying current form capitalism isn't working:
https://www.theguardian.com/business/2020/may/19/jamie-dimon-coronaviru…
So?? At this point it is kind of like...is there anyone that can be worse than the current immature, inexperienced buffoon currently in the White House. My view is...NO. All trumps experience comprises of is using other peoples money to bankrupt a business and walk. He was doing this with the USA before Covid with extreme budget deficits..opposite of what he campaigned on, but then if anyone believed anything he says then they deserve to have a moron try and lead a bunch of fellow morons. I would say leave them to it but the problem lies in the fact that it effects the rest of the world as well.
The USAs nationalistic policies of the 1930s helped lead to WWII. You ready for that scenario? because it will make Covid look like a weekend sausage sizzle. You need someone in charge of the USA that has some diplomacy, billionare or otherwise. A vote for trump in the next election will be the final nail in the coffin for the USA as a world leader as no country takes him seriously. I do feel sorry for trump, he needs to be committed to a mental health institution so he cannot do further harm to the public.
Yip and Elon Musk selling all his assets - watched that interview with Joe Rogan the other night. Either he thinks the property market is going to tank (but then he owns $60m or property which when he's a billionaire isn't much of his total wealth) or like above he's worried about the guillotine.
It was meant to be a reminder that unchecked ideology of any persuasion is dangerous even for those who initially back it.
And that's not just communism that also applies to what has happened to the housing market here - people loving their CGs but locking their kids out of houses etc.
I prefer to make my point subtlety and with humour as apposed to your attack, attack, belittle approach (which is a clear sign you're a leftie). I might give these comments a miss now, because your inability to have a civilized, mature, good willed discussion has ruined it. A lot of what you have to say is valid but your delivery would make good script for Mean Girls 2 - so much for your beloved leaders "be kind" message.
Even though I share a lot of the left's ideals I can't support them because it's clouded in faux compassion, and deception.
Musk is a bit of a different beast, he needs the cash to exercise options: https://www.theverge.com/2020/5/8/21252487/elon-musk-personal-finances-…
I was a huge Musk fanboy before all this but he has really lost the plot since the pandemic started. I couldn't even get all the way to the end of that Rogan interview. I watched it to see if he had some kind of coherent explanation for his stance but nope... just the same tired libertarian conspiracy theories as everyone else. Kind of made me realise he is pretty much just a kind of high-tech Richard Branson. It's all a big 'personal brand building' exercise. I think he basically just sees climate change as a way to get really really rich.
Found this last night, makes quite funny reading: https://elonmusk.today/
Why cannot trust anyone with vested biased view and FHB have to be careful to avoid FOMO and rushing to buy.
RE Agents : https://www.newshub.co.nz/home/money/2020/05/how-is-the-real-estate-mar…
And that’s coming from a company that helps sell houses. Just as sure as a barber is going to agree that you need a haircut, you can expect the real estate industry to paint a rosier-than-likely outlook for the housing market.
Economist : https://www.newshub.co.nz/home/money/2020/05/new-zealand-s-housing-bubb…
Is RE Agents putting a spin or Economist ?
Wow. Just wow. Extraordinary collusion between the University of Queensland and China. Disgraceful.
https://www.macrobusiness.com.au/2020/05/uq-collaborated-with-ccp-in-at…
another thing that happened today is more short notice job losses,smithcity laid off all the staff in whangarei and are closing the shop,I was in there on saturday and they were back in business,today they are stripping the shop out and they are all shellshocked.tough job market now with layoffs at the timber plant in marsden point as well.
Just another company that adds almost nothing but sucks others dry by inserting themselves between customers and sellers.
https://www.stuff.co.nz/business/better-business/121497258/queenstown-o…
And what's this?
"Website Travel, which ran on "a negative working capital model", had "unwound at such a rapid pace" because of the Covid-19 pandemic "
Is that code for a Ponzi scheme?
Edit to add. Realised that this Australian based company wants to borrow from the NZ government when realistically it has a snowballs chance in hell of repaying. Where's all.the profits gone?
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