Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes announced so far today.
TERM DEPOSIT RATE CHANGES
The Co-operative Bank has trimmed term deposit rates again.
VERY EASY MONEY
If you thought bank term deposit interest rate offers were low, and are miffed that no-one seems to want the funds you have, at a decent rate, at least be satisfied you as a taxpayer are getting a good deal. Today, the Treasury launched a new April 2024 bond with a 0.5%pa coupon via syndication and bravely sought $7 bln. Then the syndicators were swamped with demand - $14 bln showed up competing for some of that. And those bidders pushed the yield down to 0.43%. That funding came in so easily, that Treasury have decided not to cut back on future bond issues, effectively raising the 2019/2020 bond program to $29 bln from $25 bln.
IN A LIQUIDITY ZOMBIE ZONE?
It is worth thinking about the economic implications of this $14 bln bid. That means there was nearly 5% of GDP of private money not willing to invest in private opportunities in New Zealand, preferring the safety of almost no yield (and the potential of capital gain from lower future interest rates). The Government has picked up half of that to "invest" in make-work infrastructure projects, many with political priority and few with meaningful productivity benefits. But the other $7 bln will languish, awaiting future Treasury issues. It seems unlikely it will be invested in the productive private economy and time soon. And until that attitude changes, we will be stuck in a zombie zone.
CONSUMER SENTIMENT DOWN, BUT NOT OUT
Consumers aren't as restrained as investors, it seems. Westpac reports: "With Covid-19 pushing the economy into a deep recession, consumer confidence has fallen to low levels and households have wound back their plans for spending. Given the extent of the economic downturn, the decline in confidence this quarter was surprisingly moderate."
INFLATION UPTICK BUT WEAK
ANZ reports: "The ANZ Monthly Inflation Gauge lifted 0.2% m/m in May – a partial rebound from last month’s 0.8% fall. Another 0.2%pts was trimmed from the annual measure, which is now running at 2.8% y/y. There were still a few residual measurement issues in May, with some services having not resumed at the time we usually capture prices. The dust will settle on these data over the coming months, and when it does we expect the inflation pulse to be weak."
SHOWING YOU THE MONEY
In the May 2020 Budget, the Government committed to spend at least $129.1 bln in the year starting on July 1. That will be about 44% of expected GDP. $54 bln will be in just three 'Votes'; Education, Health, and 'Social Development', all consumption spending. We are continuing our Budget analysis and summaries, and you can see in useful detail how that $54 bln will be spent. For example, did you know that National Superannuation now costs $16 bln alone or 5.5% of GDP? It is our largest single expense. All twenty DHBs require $15.1 bln, up +6.6% in a year. Our Universities need $3 bln over and above the fees they charge, secondary education costs $2.8 bln (+15.8%) while primary education takes $3.9 bln (+9.2%). And all these large sectors have active lobbyists and unions claiming it isn't anywhere near enough. Details here.
DISASTER!
Two people from the UK were given a special border exemption to attend a funeral in New Zealand. They have now been tested as COVID-19 positive, the first cases here since Level One. Contact tracing systems are getting a live workout. You would hope that border controls will be redoubled after this breach. Tearful TV pleas, and talking heads who think we have over-done the lockdown, shouldn't sway proper biosecurity.
AUSTRALIA UPDATE
Infections are rising in Australia too. In Australia, there have been 7347 cases (+12 since this time yesterday), 102 deaths (unchanged) and a recovery rate of just over 93% (up). 17 people are in hospital there (+1) with 4 in ICU (+1). They now 394 active cases. Small numbers of community transfer cases are popping up there however.
GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 8,015,100 and up another +116,000 from this time yesterday. This is still rising at a faster pace than recently. (When this tally exceeds 10 mln, we plan to give up reporting the number daily. It's in the wild, unstoppable on a global basis.) American cases rose by +20,000 since yesterday to 2,113,400. US deaths now exceed 116,000. Global deaths now exceed 436,000.
EQUITY MARKET UPDATES
After a small loss yesterday and being down -7% since last Wednesday, the ASX200 is roaring back today, up +3.8% so far in this session. The NZX50 Capital Index is up +0.9% near the end of the session here. Shanghai is up +1.0%, Hong Kong is up +2.9% and Tokyo is up +3.3%. All these rises follow Wall Street earlier that rise +0.8% at the end after a session that started down -2.4%, so a +3.2% turnaround in the session. Driving the sentiment shift is the usual lubricant - the promise of more huge stimulus from American authorities. Asset inflation is accelerating.
SWAP RATES UPDATE
Swap rates probably rose at the long end today, but unlikely at the short end. We don't have wholesale swap rates movement details yet but we will update this later in the day if they show a significant movement. The 90-day bank bill rate is still at 0.27%. The Aussie Govt 10yr has risen +6 bps to 0.93%. The China Govt 10yr is up +9 bps to 2.86%. And the NZ Govt 10yr yield is also higher, up +3 bps at 0.83%. The UST 10yr is up +10 bps since the end of the Friday Wall Street session at 0.77%.
NZ DOLLAR UP
The Kiwi dollar is up a strong +¾c from this time yesterday to 65 USc. Against the Aussie we are lower at 93.3 AUc. Against the euro we are firmer at 57.3 euro cents. The net off all that means the TWI-5 has risen to 69.5.
BITCOIN RISES
The price of Bitcoin is higher today at US$9,472, up +2.3%. 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
54 Comments
"there was nearly 5% of GDP of private money not willing to invest in private opportunities in New Zealand, preferring the safety of almost no yield "
And that's what happens when future risk tells you that the price of whatever you want to buy/invest in today will be lower tomorrow. The longer this goes on, the more detrimental it will be to our economy.
Co op is a feel good scam bank that pretends to be unique and different while offering nothing of any value.
Rebate? Scam that doesn't make up for lower interest rates even in ideal situations.
Fees? Garbage that tries to lock you in to give them more business at lower than value found elsewhere.
They are quick to call you to give a personal touch but can't provide anything of use.
I still have a few 100 deposited just in case they want to give me a car.
If you thought bank term deposit interest rate offers were low, and are miffed that no-one seems to want the funds you have, at a decent rate, at least be satisfied you as a taxpayer are getting a good deal.
Only as long as the RBNZ doesn't scoop them up in it's LSAP operations. If they do the taxpayer is exposed to floating rate interest rate risk payable by the RBNZ, unless of course the negative OCR interest rate option is activated.
Then one has to ask why would the banks be so stupid given the evidence of dwindling bank profits emanating from Japan and Europe caused by central bank actions?
Yes it could be a real shot to the recent favourable party voting they've been receiving.
Comes across as sloppy and incompetent.
We'd done so well to get to where we were - including not letting those living in NZ attend funerals over lockdown. Then to simply let people fly into the country and drive the length of the North Island. Seems completely insane to me. If we're back in level 4 in 3-4 weeks they're gonna really regret that decision making.
I am frequently gobsmacked by the stories of incompetence in managing quarantine of people. FFS we aren't playing tiddlywinks here. Being kind to those who fail to do their jobs properly is wrong. Heads must roll as soon as they show they are out of their depth or just lazy and putting the country at risk.
However it was being kind to the travelling women which was the wrong thing to do. The right attitude would have been to be firm.
There is a time and place to be kind.
I had a boss whose first response to everything was "no"! Sometimes he meant it, other times it was a joke. And he had a stamp he could use on written documents. It said "Bullsh!t".
He had a great sense of humour :)
Yep I have to agree. Why are they stupid enough to risk it? All they have to do is stop people from other countries spreading COVID and they will win the next election. Throw billions of dollars at it if they have to (they shouldn’t have to). And anyone from the UK and other high risk countries should be automatically in quarantine for min 4 weeks no exceptions (Why are they still bloody coming here anyway?). How many times do they need to cock this up to realise? The luck has to run out sooner or later!
Watch carefully as we unwind our excesses & recalibrate our desires into something a little less OTT. Not so great for our monthly/quarterly GDP readings but we'll figure out a new way to measure things so it doesn't look so bad. Peak tourism? Gone. Peak travel? Gone. Peak retail? MIA. Peak sport? Still critically injured. Peak globalism? Gone. Peak cars? Crashed. Peak wages? Unemployed.
On the other side of the balance sheet... Peak debt? Tripled. Peak welfare? Booming. Peak stupidity? On tv news everywhere.
In the USA they have MADD ( mothers against drink driving) you don't drink and drive in the States, they don't have to prove you are over a limit just prove you are impaired.
In California, by us, a guy drunk and high went through a red light and killed two college student, girls on the way to school.
IF you drink drive they will arrest you, I have seen it in Napa, people out for an afternoon at wineries cuffed and lying over the trunk of the car.
The guy that got shot in Atlanta would have been shot in Ca, whether is was black or white, you don't drive drunk, you don't struggle with cops and you don't steal their gun.
This guy had multiple convictions for violent offences, eventually middle America will demand action against rioters and looters, those mad mothers have clout.
Shot in the back Andrew..in NZ they would have let him run and then let the dogs catch him. He would the face legal action in a court of law and perhaps received help for his drug addiction (alcohol).
If he had a gun ..sure ..but he was asleep in a Wendys drive thru?
Maybe you should move back to Cali AJ...taser is not a gun and do you really think he would have been shot in the back if he was white? ...give me a break
I tend to agree with you on this one AndrewJ - although the initial police killing that started all this was terrible. But watching the video of this last shooting I just couldn't help but think, you idiot, don't resist, don't steal and shoot the taser, don't punch the cop in the face, don't run away....
Regardless of skin colour, these actions are likely to get you shot in the US, yet this second killing has become a race issue again when it shouldn't be.
AndrewJ, you can be a sage, but in this case you're a dickhead. Those of us in NZ with parents and uncles who have been in the Police and armed forces are proud of our parents/siblings ability to think before they act. hey... he's running away...we have his car and ID!
Your pathetic attempt to foist bad Police behaviour on "Hey, he had multiple convictions for violence... is so wrong. I watched the videos (they disgust me) and to argue that his choices made him 'deserving of a killing' means that you have lost touch with wherever you came from.
You have made a choice to side with those who defend your interests, whatever they are. You have lost my respect with this post.
It is "bad" behaviour in your opinion.From what I have seen:
This is not a dude restrained and being kneeled on.
This is not a kid with a phone.
This is not a summary execution by the cops.
Rather:
1. Guy is asleep in his car, cops woke him up,
2. Guy got lippy, cops arrested him,
3. Guy fought, cops fought back,
4. Guy stole a taser and tasered a cop, Cops tasered him back,
5. Guy fled (with Taser). Cops ...
There is a clear escalation of force here, and it wasn't by the cops. He may not "deserve" to be killed. But it was an entirely predictable conclusion given the path he took.
There are three potential issues here:
A) police in US are incompetent (two against one drunk guy)
B) police in US use weapons way too frequently (Did they even need that taser let alone gun?)
C) police in US (and probably most other places) are racist.
All three of those need to be addressed.
Maybe they would have shot a white dude in the same circumstances too; but surely you acknowledge they would be much more likely to shot a black man.
Black cops shoot more black people than white cops.
He was a big guy, everyone knows the rules they are not ambiguous.
Drink driving law requires police to arrest people who break this law, if they let him go and he crashed and killed someone they would be prosecuted.
Every time I have dealt with cops in USA they have been professional and courteous, I was witness in a murder trail in Maryland in my younger days, they were amazing.
so what's with the name calling?
The USA is very different to NZ, we don't have the high capacity weapons available and nothing like the drug problem or the unemployment.
Don't judge US cops on your experiences in NZ. Policing in NZ is nothing like what my friends have to do in the States.
I have two good friends, some of my best who are in drug enforcement in CA. They are armed up, they are the best people ever, generous and full of life, but as my wife says, don't mess with Kenny. He has been shot at from a building, he has been beaten he has even been undercover with the Russian Mafia. Yet he keeps his sense of humor, but it's very much black and white when it comes to crime and he's African American.
What we do know is there is no difference in intelligence between races except perhaps Ashkenazi Jews. So whatever is keeping people poor it's not lack of brains.
Those rules can be racist too. If you go around unnecessary killing people for committing petty crimes you are effectively targeting those demographics unnecessarily. Saying they knew the rules doesn’t make it any better.
It’s like if the NZ police decided to shoot anyone that drives aggressively; that would be racist against middle age white men driving European cars. But no one has made such a rule because those people are not a minority.
As an ex cop I find it quite insulting to say cops are racist. Cops are motivated to do a good job, period. Their job is to show a presence to deter crime, and detect crime and deal with it. Their job isn't to make crime, and there is plenty to go around without making it up.
I've watched the video of that incident and the guy is being pursued by Police as part of an arrest procedure. He turns and discharges a round from a hand gun at the Police Officer. The officer was fully justified in returning fire. Guy deserves medal in fact for putting his life on the line.
I was once involved in a drink driving incident where the offender had driving a leg of the motorway the wrong way. He was being followed by a car that had to dodge him as he came up the onramp. I was driving as we were looking for him and nearly hit him. He'd parked and staggered across the road into my lane (this was night time). Turned out he was a Detective Senior Sergeant from out of my district. Interesteing thing was the file disappeared out of my partners inbox for a couple of days. But we were taken aside by the district commander and given a very clear commendation for our handling of the event, but also a warning that if we had not processed him for drink driving our jobs would have been on the line. You can't not act when there are witnesses. How many cars on the queue for the drive through?
So despite my recent article on the unlawful action of Police in the lockdown, they have a tough job as ever clown with a keyboard can tell them their job. Try doing it mate. Try the shift work, try making good decisions at 3:00am when confronted with an armed offender.
The one concession I'd make to you is that yes the two cops should have controlled him in the arrest. That was poor form. However it doesn't detract from their actions being justified. Nothing is that urgent, always time to get it sorted with a good lawyer later on. Cops occasionally need to remember that also.
Your biggest fear, as I have pointed out, should be politicians telling Police what to do. Personally I had the joy to issue traffic infringements to a couple of judges, totally made my day when that crossed my plate. Some of the hardest hit people I had to arrest were men in domestic violence situations. A good number of white men from middle and upper class. Reason was policy set down by memorandum with "Womans Refuge" which denied these men the right to bail by Police, they had to be held in custody until a judge did the honours. A good number of these men were not abusers, but made a mistake under a barrage of abuse directed towards them. They still made the mistake of not walking out the door, sometimes a very minor mistake, but justice had to be seen to be done. Protections order at that time were easy to get and brutal, some of these men were cut from their home and their families in what was probably a very unjust manner. The higher up the social ladder, the harder the hit. It is a very different outcome to young offenders that see Police and prison as an occupational hazard.
As an ex cop? I simply can't believe this! Let us know your name and rank and period of service - and whether you served in the NZ Police or perhaps a force with fewer scruples? I have a godson and two nephews on the force in South Auckland tonight and they certainly do not share your views!
Lol, and what are your qualifications kiddo? You know some police? wow, so do I. I would wager all of the board would.
Given the interest readership numbers, pure stats says there must be at least a few cops on here.
Here are my name drops... Cousins, mates, colleagues (Now ex-cops), neighbours. Overseas and NZ (including AOS, and even one with STG experience).
Funny enough all of their advice is the same. Don't want to get shot?
a) Don't commit a crime.
b) Don't disobey a legal directive.
Not only an ex cop, the old timers here will know this, but also one that knows a bit about law. Stephen Frans (ex MP and Law Firm Owner) stated this is better than any lawyer has written on the constitutional position of Police. I worked with MP Matt King on section when I first started out, so was partnered in the car regularly with him. https://www.interest.co.nz/opinion/104830/jason-stewart-worried-we-have…
18 weeks training. 19 weeks in NZ.
2.5 years in Gertmany.
Not sure if the steroid issue is still a thing with the US police. Ex roid taking football players.
The issue is a lack of training. Better trained police would be better at handling situations and freeing up the court system.
I met a German cop while I was travelling once. He found it insane that our cops aren’t armed. His attitudes seem to align with the US which I found surprising. It’s not just about training, it’s about the mandate coming from the top and whether they do their research on tactics that work best or bow down to pressure from voters who haven’t. I highly doubt there would have been any issues had NZ cops handled that case, they probably would have bought him a burger and nicely asked him to get in the car. (Although we don’t have the stupid gun laws that they do in the states so it’s kind of hard to compare)
When you travel you end up in countries with different laws, in Singapore if you have drugs the State will kill you. In Saudi if you are involved in homosexual sex or a raft of other crimes the State will remove your head from your body. In China it pays to follow the rules, we know it and accept it.
I had a friend who went to France, got drunk and called a police officer an f-ing pig, he lost a tooth from the barrel of the guys gun, and spend a weekend in a scary police cell. In the USA they have rules too, they also have a court system that protects your rights. They also have some ugly crime stats, people vote for tough laws mostly out of fear.
I was in the UK a couple of years ago, down the road a guy was driving his car when a motorbike pulled up and emptied a pistol magazine into him, killing him, they escaped by bike. A professional hit job that got one paragraph on about the 5th page of the paper. Thats London.
We seem to think we can compare the USA to here, I think that is wrong. They are tough on crime many states still have the death penalty. High security prisons are horrific, I got to have a brief look and it was mind blowing.
They are not tolerant of people who break the law.
this is Scott Adams and he nails the problem just over 44 min in.
Another example how National has sold itself to China :
https://www.newsroom.co.nz/2020/06/16/1230298/nz-still-plotting-place-i…
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.