Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No home loan rate changes advised so far today. But we have reviewed the rate premiums that apply for borrowers who have less than 20% equity, here.
TERM DEPOSIT RATE CHANGES
ANZ, BNZ and Heartland all cut rates today. More here.The Wairarapa Building Society also made its own cuts.
UGLY RESULTS DUE
Our national airline says there's still too much uncertainty to forecast earnings for the financial year that ends in a month, but says it hasn't needed to draw on the $900 mln loan facility offered by the taxpayer yet. It has its cash burn down to $60 mln per month while waiting for redemption..
AN UNUSUALLY POSITIVE TRADE RESULT
We posted a +$1.3 trade surplus in April 2020 which is vastly better than the +$361 mln surplus in the same month a year ago. This is because although exports fell a modest -4%, imports crashed -22%. Basically, we did without 'stuff', especially things like cars.. Compared with many other countries, Covid-19 has made us a net gainer. Food exports have proven to be more resilient in a crisis.
POSITIVE CHANGE IN FED FARMERS BANK SURVEY
Federated Farmers says the number of farmers feeling satisfied with their banks has risen slightly, and the number feeling under pressure has dropped. Federated Farmers' May 2020 banking survey of 1,400 farmers shows respondents feeling satisfied or very satisfied with their banks rose to 69% from 68% over the past six months. Those feeling under pressure dropped to 19% from 23%. Satisfaction has slipped as a trend since the twice yearly survey started in August 2015 with this being the first positive change since then. Federated Farmers notes the Government and Reserve Bank have been encouraging banks to support lending during the COVID-19 crisis.
WHAT FARMERS PAY
Based on survey responses relating to nearly 3,000 on-farm positions, the 2020 Federated Farmers/Rabobank Farm Remuneration Report shows the average farm employee remuneration package for dairy farm workers rose by +9.7% to $57,125, across sheep/beef farm roles it was up by +7.6% to $55,568, across grain farms it was up by +3.1% to $58,800 and in ‘other’ specialist farm roles outside standard position descriptions, it was up by +16% to $61,288.
BOUNCEBACK TO NEAR 'NORMAL'
Paymark is reporting that consumer spending is recovering fast, and in the week ended May 24, it was down only -2.3% from the same period a year ago. At its depth (April 12) it was down -58%. Similarly, the two regions that had the largest year-on-year fall, Auckland and Otago, have experienced the strongest comeback, +16.2% and +16.9% week-on-week.
GOVT'S COVID-19 VACCINE STRATEGY
The Government is putting $37 mln towards a COVID-19 vaccine strategy. It says this will enable NZ scientists to contribute to global research efforts and explore the potential for vaccine manufacturing capability in NZ. It aims to secure a safe and effective vaccine in sufficient quantities at the earliest possible time. $10 mln will be used to support research in NZ, and $5 mln to support potential manufacturing capability. Up to $15 mln is for international research collaboration, and $7 mln for Gavi, which distributes vaccines to developing countries.
A DIM OUTLOOK
Westpac isn't positive about the future of the constructions sector. It may be springing back to life as the lockdown is lifted. However, they think the sector faces another significant downturn in 2021. Job losses, stretched balance sheets, and nervousness about the economic backdrop will result in home building falling -20% below preCovid levels over the year ahead, that say. Slower population growth will also dampen construction activity. Even so, many parts of the country will still be wrestling with a large shortage of houses for an extended period. Commercial construction is set to fall by -15%, weighed down by weakness in tenant demand and increased investor nervousness.
MORE ENERGY CONSUMED
In the past week, electricity demand has pushed up higher than for the same week a year ago. Hydro lakes are at normal levels, and inflows are normal for this time of year.
STILL AT CRISIS LEVELS
Our Auckland readers will know that winter rain has returned. That means +70% more than normal has flowed into the City's water storage reservoirs - for the week. But that still leave this storage at only 43% of capacity when it is normally 77% full at this time of year. The Queen City water crisis hasn't passed; in fact it hasn't even started to improve yet.
WATCH WE ARE WATCHING
We are keeping an eye on bankruptcies and no asset procedure levels. Through to March, they were unremarkable. In April, the numbers fell sharply, but that may have just been a processing anomaly. From here on out they may get 'interesting' one would think.
LOCAL UPDATE
There were zero cases again today, leaving the total at 1504 cases identified as either confirmed (1154) or probable (350). There is still only one person left in hospital with the disease, and they are not in ICU. Our recovery rate is now just over 97%, with only 22 people known to be still fighting the infection (-5).
AUSTRALIA UPDATE
In Australia, there are now 7126 cases (+12 since yesterday), 102 deaths (unchanged) and a recovery rate of just under 92%. 31 people are in hospital there (-5) with 5 in ICU (unchanged). There are now 484 active cases in Australia (-17). Just for comparison, the recent Aussie bushfire emergency cost 445 lives.
GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 5,494,300 and up +87,800 from this time yesterday. Now, just 30% of all cases globally are in the US, which is up +19,000 to 1,662,300. US deaths are now touching 100,000. Parts of the US are convulsed by stupid conspiracy theories. Global deaths now exceed 346,000. Deaths in the UK now exceed 37,000, the country with the second highest global total.
EQUITY MARKET UPDATES
Equity markets in Shanghai (+0.7%), Hong Kong (+1.6%) and Tokyo (+2.2%) have all opened today higher. And the ASX200 is up +1.8% so far today, while the NZX50 Capital Index is up +1.3%.
SWAP RATES UPDATE
Update: Swap rates moved higher today, with the two year up +2 bps, the five year up +5 bps and the ten year up +6 bps. We don't have wholesale swap rates movement details today yet but early suggestions are little-changed. We will update this later in the day if they show a significant movement. The 90-day bank bill rate is unchanged at 0.26%. The Aussie Govt 10yr is little-changed at 0.87%. The China Govt 10yr is up +2 bps at 2.67%. The NZ Govt 10 yr yield is up +4 bps at 0.65%. The UST 10yr is basically unchanged at 0.67% awaiting tomorrow's market opening in New York.
NZ DOLLAR FIRM
The Kiwi dollar has been in a firming trend all day, now just over 61.2 USc. Against the Aussie we are unchanged at 93.3 AUc. Against the euro we are also firm at 56.1 euro cents. That means the TWI-5 is up marginally to 67.1
BITCOIN FIRM
The price of Bitcoin is up by +1.1% since this time yesterday at US$8,875. 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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35 Comments
Some encouraging stuff in that :) Though I still fear it is the calm before the economic storm. Should we expect that out of work building industry folks will just shift offshore as happened to a significant degree during the GFC (leading to a very slow 10year rebuilding of house building capacity that in turn contributed to housing crisis)? If out of work do flee to OZ we won't be paying benefits, but we will still pay a hefty economic price.
Its like that with the youth also in NZ.
The whole economic fallout from (at least partially) Covid-19 will put people off retiring, and the domino effect of that suppresses everyone below it. Thats bad enough as is, but the job market is going to be a whole heap worse than where we left it in early March.
The solution? I don't know. Yes the youth could potentially head overseas, but outside of Australia I'd say the resurgence in nationalism will put the priority on giving local people local jobs. I think the days of making a six figure salary contracting for two years in London are a thing of the past.
I'd agree that all signs point to the erection of barriers to international movement of Labour, (and a sharp step back from globalism in general) particularly for educated and student chinese . UK over last decade made it difficult for antipodeans and other commonwealth youngsters to work there as EU was forcing them to take immigrants they didn't want, and they were responding by limiting those they were allowed to. Bad as UK does very well out of global gastarbeiters - relationships formed greatly increase UK's 'soft' power in the world.
Commercial construction has had a lot of projects in the design pipeline which should gain consents as the Councils catch up. The start of this year was extremely busy the same as the start of last year but new projects have fallen off. Investors are waiting to see how this plays out.
2020 definition of conspiracy theory - something someone doesn't believe in.
Remember - jet fuel melts steel, only three buildings fell that day, it was a bat from a wet market, Epstein killed himself, Andrew can't remember that picture and a pandemic caused all this mess.
Also... chem trails... and all bankers are Jewish elite reptiles, along with the Queen of England in the super secret New World Order of Illuminati, who also conspire with aliens, who built the pyramids and are secretly replacing the human population with clone hybrids. And somehow, inexplicably, all this super secret stuff about the global elite reptile aliens are known by incel bloggers and conspiritards, including their supreme leader, ex-sports presenter and rose quartz worshipper, David Icke.
Great post Masher.
Out of Interest, how do commenters feel about 9/11 and it potentially being an inside job?
For myself, I haven't been able to find anything that helps me reconcile WTC7 falling down as it did, so put my dollars on there being some element of conspiracy. Thoughts?
Oh please, the damn thing was on fire for 12 hours and concrete doesn't give the steel superstructure a fire rating for that long. Concretes job in such a stucture is the stop the steel losing its strength by delaying the heat transfer in the hope the fire will be extinguished. It wasn't. The steel got hot, expanded, weakened, and failed.
WTC7 is the smoking gun. Theres no way it fell by the official narrative, and given that, what credibility can you give to buildings in the same complex falling on the same day?
That, and why do they keep going on about only three buildings falling that day? What about WTC6?
I’m glad the editorial staff don’t bow to that minority of their readership who would rather drink bleach than admit Trump could be, uh, handling some things slightly better. It’s been horrifying watching the mental decay as punters drift rapidly from ‘sceptical of mainstream media’ to ‘Covid is a UN depopulation conspiracy to kill millions that is also a Chinese terrorist activity and also a complete media beat up that has only killed old people and also a Muslim plot to close churches and it’s actually CNN’s fault for holding Trump accountable for the virus which is, after all, a natural act of God...’ At this point Trumpists are beyond rational dispute... you’ll have better luck arguing with vegans or Hare Krishnas.
Bit harsh on the Vegans and hare Krishnas.
The thing is , these conspiracy theorists arent out there risking it in general public places, definetly not front line workers etc . They can sit behind their anonymous web personas , claiming they will be eliminated if made public. There is no risk , and a kind of fame of sorts been an "influencer". Best of all you can't be proven wrong , any facts that don't support your case are obviously the conspiracy trying to shut you down. the only proof you need is a link to a you tube video by a fellow theorist , or some disgruntled academic , who is of course, subdued/snubbed by the "establishment" .
Like your comment. However need to point out that there are 38 million odd trump supporters who lap up these conspiracy theories when you have the schoolyard idiot promoting them and the mainstream media repeating them.
Even my son in law is a subscriber to such conspiracies,(he lives in the states) and an avid trumper. Unfortunately no one really ever said he was particularly smart either, which is a bit of a shame for the family in general, but I digress. All in all , a very sad state of affairs.
Yep. Classic boom-bust cycle, classic problem with the construction industry. Get them building state houses I say, there’s plenty of demand. Could entice new builders into training with a job guarantee - work for whoever you want, but there’ll always be a job building state houses for $25 an hour as a backstop if you need it.
work for whoever you want, but there’ll always be a job building state houses for $25 an hour as a backstop if you need it.
According to Ashley Church in Granny Herald, NZ will got bankrupt if the govt were required to provide state housing. He thinks that the govt operates like a household and is funded by taxes.
That's the level of Granny Herald.
And the border is open, and open for business. If only we'd known...
Interesting to know who the other people are, other than the film people.
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12333398
Hundreds of foreigners have been allowed through New Zealand's closed borders, including key production crew to the blockbuster Avatar sequels.
The film industry says allowing key film personnel, like producers and cast, into New Zealand would be "huge" as it could trigger thousands of jobs for Kiwis.
Economic Development Minister Phil Twyford revealed today there was a little-known category for border exemptions for foreigners deemed essential to a project of "significant economic value".
Hitler had his Breitspurbahn (wide guage railway that planners worked on until the war ended). Auckland council has its Northern Pathway (a seamless dedicated walking and cycling link between Auckland’s City Centre and the North Shore).
https://www.nzta.govt.nz/projects/northern-pathway
Today they sent an email asking for advice about it but didn't supply an option suggesting the council might wish to postpone it given its current funding problems. Am I the only North Shore cyclist who can divide its $360m cost by the number of cyclists in North Auckland?
Contractors lose their jobs. High level salaries are trimmed. They are talking of redundancies and savings (my guess shutting libraries and reducing litter collections). If that $360m was all going in wages to otherwise unemployed NZ citizens it might be defensible. Bureaucrats have not realised times have changed.
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