Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No more changes here today as we await reaction to the RBNZ review.
TERM DEPOSIT RATE CHANGES
NBS has cut TD rates. Update: ANZ has cut rates across the board, between -5 and -15 bps.
OCR & QE UNCHANGED, BUT ...
RBNZ says the balance of economic risks still remains on the downside and it is prepared to provide additional stimulus as necessary.
MR NO
NZ First has blocked the Auckland's light rail project. The Ministry of Transport however backs the NZ Infra bid but it is unclear whether NZ Infra is interested in continuing with the project after the election.
'WE NEED YOU TO BE WEAKER'
In Australia, regulators have told banks that they expect them to run down their capital buffers, supporting their customers with increased lending in high risk situations. No doubt these same regulators will throw the law books at the banks if things go pear-shaped.
THE AUSSIES LOVE ARDERN
An updated poll of Australian attitudes (in March) to other countries and their leaders reveals a sharp fall in trust of global leaders. Only one in three Australians (30%) express some or a lot of confidence in US President Trump ‘to do the right thing regarding world affairs’. Confidence in China’s President Xi has also fallen sharply, with only 22% of Australians expressing confidence in him. New Zealand’s Prime Minister tops the list of leaders again, with 87% of Australians expressing confidence in her. 73% expressed confidence in Japan’s Prime Minister, a rising trend. 60% have confidence in the Australian Prime Minister.
CHINA COVETS THE TPP
China is showing more detailed interest in joining the TPP, now seeking Japan's attitude to an application. It's own RCEP isn't looking so attractive these days, even to it.
AUSTRALIA UPDATE
COVID-19 infections are rising faster across the ditch. In Australia, there have been 7521 cases, +29 since yesterday. Their death count is up +1 at 103 deaths and their recovery rate is back down slightly to 92%. There are now 503 active cases in Australia (+28).
GLOBAL UPDATE
The latest compilation of COVID-19 data is here. The global tally is now 9,237,600 and up +164,000 since this time yesterday. This is a rising pace. (And a reminder, when this tally exceeds 10 mln, we plan to give up reporting the number daily. And at the current rate that may be by before the end of the week.) American cases have risen by +35,000 in one day to 2,345,900. That is a larger-than-usual daily rise too. The number of active cases in the US is now 1,577,100. US deaths now exceed 121,000. Global deaths now exceed 477,000.
EQUITY MARKET UPDATES
At the end of the New York session, the S&P500 fell away and ended up a little less than +0.4%. The Shanghai index has opened +0.2% higher today, Hong Kong is +0.6% up and Tokyo is up +0.4% is early trade. The ASX200 is flat but the NZX50 is up almost a full +1.0%.
SWAP RATES UPDATE
Swap rates were probably higher at the long end today. 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 staying up at 0.30%. The Aussie Govt 10yr is up +2 bps at 0.93%. The China Govt 10yr is down -3 bps at 2.93%. The NZ Govt 10yr yield is much firmer, up another +5 bps at 0.97%. The UST 10yr is marginally firmer at 0.72%.
NZ DOLLAR FALLS
The Kiwi dollar dropped -40 bps on the RBNZ announcement and then rose immediately by +15 bps. A sharp correction following an RBNZ announcement is very normal, followed in a few days by a rising rate, above where it started. The NZD is currently at 64.8 USc and only a net fall of -20 bps. Against the Aussie we are also softer at 93.3 AUc. Against the euro we are down at 57.3 euro cents. That means the TWI-5 is lower by -10 bps at 69.4.
BITCOIN UNCHANGED
The price of Bitcoin is unchanged at US$9,640. 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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37 Comments
A 10k increase per day (one third) in the US over the past two weeks. They can't afford to do LD again so up she goes. It remains to be seen if the death stats rise sharply due to over crowding of hospitals in the US as it did in the likes of Italy. The US mindset of 'leave no man behind' is to be put to the test of how the public will react. Not well is my guess.
Our quality of Life just keeps being eroded...
"St John Ambulance service will cut up to 100 jobs as the organisation struggles...In an internal email sent to staff on Wednesday, the chief executive described the situation as dire."
More debt, that's what we need! And the cheaper and more of it, the better.....
12 May 2020
https://www.newstalkzb.co.nz/news/sport/racing-gets-72-5-million-emerge…
Racing gets $72.5 million emergency support package
10 June 2020
https://www.tvnz.co.nz/one-news/new-zealand/st-john-ambulance-warns-sta…
St John Ambulance warns staff of job cuts as it grapples with $30m deficit
You are saying the people losing jobs is bad. which is true. The NZ government is deficit spending (i.e. the RBNZ is printing money) to help these people with welfare payments. Are you saying that NZ government must stop paying welfare? and it should balance its budget to its significant reduced tax income?
There is no doubt that clever people can spend a long time thinking and debating how much deficit we should go into, what to spend it on, how to spend it etc, but i doubt that many people will disagree that not printing money will bring about certain and server hardship and social disorder.
So if you were in power, what you would have done? no deficit spending arguing that the outcome will be the same? I seriously doubt that. It is very obvious that the ultimate winner of all government spending is people who own assets in all forms and shapes as money will end up with them (and government). Many people see this as unfair, but what is the alternative? this will be the case if people are allowed to own private assets. And to stop people from owning private asset you have to stop their entitlement as how to spend their wages/earning. Any system that allows holding private assets and recognizes personal authority over them will sooner (more US type) or later (more Scandinavian type) (assuming no wars or revolutions) arrive at this point where money ends up with the rich. All wars and revolutions do is they put some new faces in the game and retire some old players.
I wouldn't stoop that low to be a politian, I am too honest and would tell everyone the real story which would sink my career.
All I said was that social unrest was on the way either way. That is how it is going to play out. Even Jacinda who likes to paint herself as saviour of the nation knows that while BS'ing the masses.
In Australia, regulators have told banks that they expect them to run down their capital buffers, supporting their customers with increased lending in high risk situations. No doubt these same regulators will throw the law books at the banks if things go pear-shaped.
I thought the RBNZ suspended the implementation of a new hardly there bank capital structure to an undefined future date.
In fact interestdotconz reported this telling observation,
According to the Reserve Bank, the new capital requirements mean banks will need to contribute $12 of their shareholders' money for every $100 of lending up from $8 now, with depositors and creditors providing the rest.
Audaxes, i've been meaning to ask... how do you think all this will unfold? Currency deflation? Bond market savaging? MMT and/or UBI? CPI deflation/inflation? You seem to be very well roundly read on the financial market/central bank dance. What is your best guess?
Bond market savaging?
The most interesting and visible option for clues to the future.
Currently, DM sovereign bond markets signal disinflation caused by tight global monetary conditions no matter what central bankers would have you believe. Yes, there are instances where high bond prices cause banks to lend to a select coterie of citizens to speculate in other asset classes to capitalise the rising discounted present value of associated cash flows, but that is not the stuff of coherent global growth for all.
To be clear, I am not ideologically tied to any dogma and run with the trend no matter what. However, over many years the bond market has never failed me in it's collective ability to signal economic reality - it just takes a little skill, mainly time, to read the various parts of the curve to lend weight to one's investment decisions on any particular day.
yes and the people in NSW are getting angry that they wont close the border like Queensland
meanwhile Queensland , WA, SA are all saying we wont open any time soon because of VIC
Jen B
I’m sick of Victoria being the laughing stock of the country!
Just been to Coles and every second person walking out with toilet paper - the crazies are back!
Everyone's got their hand out. I would have thought AJ Hackett Bungy should have some savings. Apparently not.
https://www.stuff.co.nz/business/300041475/aj-hackett-bungy-to-receive-…
Of course I took the the employee subsidy for the Motel, also I paid no tax on the profit of the sale of my own house. Your comment doesn't make sense at all, that's exactly the problem, this government is giving away too many easy $. You don't get it, if the government offers free $ and people legitimately qualify for it, people will take the $, me and you included. It becomes a lolly scramble
Absolutely furious about this decision......Tourism is toast as we see COVID numbers increase, just moth ball these ventures or let them fail, just good money after bad for lets face it the same result and a follow up inquiry in two years time just incase enough dough hasn't been squandered
The Minister of Health out making election advertisements.
https://www.newshub.co.nz/home/politics/2020/06/health-minister-david-c…
Watch the video. This is what happens when the PM and her dept take Clarkes job away (Woods) while not sacking him, leaving a wounded, cornered minister carving up a public servant.
As for Dr B, stay put. Think of it as attempted constructive dismissal, resignation gives em the scapegoat they need sacrifice.
https://www.employment.govt.nz/ending-employment/constructive-dismissal…
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