A review of things you need to know before you go home on Monday; more TD rate cuts, pay cuts hit hard, RBNZ drifts north faster, trans-Tasman bubble slips away; swaps lower & flatter, NZD holds firm, & more

A review of things you need to know before you go home on Monday; more TD rate cuts, pay cuts hit hard, RBNZ drifts north faster, trans-Tasman bubble slips away; swaps lower & flatter, NZD holds firm, & more
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Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes to report.

TERM DEPOSIT RATE CHANGES
Rabobank have cut rates today. BNZ also cut rates across the board, and cut its bonus saver rates. General Finance also cut their offer rates.

JOBS REBOUND ...
Job numbers rose in May 2020 after a substantial fall in April, Stats NZ said today. In seasonally adjusted terms, the total number of filled jobs rose +0.8% in May 2020, compared with April 2020. This contrasts with the fall of +1.6% in April 2020 compared with March 2020. On the same basis, job numbers are +2.2% higher in May 2020 than May 2019. Auckland was up +3.6%, Waikato up +6.2% while Canterbury fell -1.2%.

... BUT PAY HIT HARD
The same data shows total earnings have fallen steeply, down -$1.4 bln from a year earlier, as pay cuts and the only-partial support of the wage subsidy hit incomes. On a per-job basis, monthly earnings declined by -13% pa, the largest drop on record over the last 20 years. (H/T Infometrics)

SLAM DUNK WINNERS
F&P Healthcare shares are rising quickly, up to $32 today and a gain of +4.6%. This now means that its market capitalisation is now $19.2 bln, a new record for any NZX listed entity and 12% of the total NZX board. The next largest is A2Milk at $14.6 bln which rose +1.4% today.

COVID-19 UPDATE
Now that the official global infection level has passed 10 mln, we have ended these afternoon updates. The morning briefing will continue however.

NOT PART OF THE PLAN
That was the plan. But we have news that Victoria is in trouble. Australia reported +78 new cases today, +75 in Victoria. For the state, that's their fourth highest total ever. Nationwide, Australia has 667 active cases now, +50% more than two weeks ago. The trans-Tasman bubble isn't happening any time soon, perhaps not even in 2020.

A SHARP SHIFT NORTH
The RBNZ today signaled that it will be building "a significant presence in Auckland" and that follows other regulators who are shifting their focus away from Wellington. This comes after the Government consented to a large increase in staffing numbers and it seems many of these now positions will be in the north and related to "supervision and enforcement". All main banks are now based in Auckland, and even Kiwibank is building its core in the Queen City with the CEO domiciled there.

LIST UPDATE
More political parties have announced their Party Lists; today it is ACT. You can see them compared here.

CHINESE 'SPY' RESELECTED
In an astonishing decision, the National Party has given a higher ranking to 'invisible man' Jian Yang. Read this. He won't talk to the New Zealand media and indicated the decision is 'indefinite'. The Labour Party also has a similar selection in Raymond Ho. That is equally astonishing - but at least he slipped lower in their list.

EQUITY MARKET UPDATES
The futures market now suggests the S&P500 will open +0.4% higher when it opens tomorrow. But the ASX200 didn't get the memo and is down -1.4% so far today. The NZX50 is of the more positive frame-of-mind, and up +0.8% in late trade today. Shanghai and Hong Kong have each opened -0.5% lower while Tokyo has opened -1.4% lower.

SWAP RATES UPDATE
Swap rates were probably lower and flatter 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 up another +1 bp at 0.31% and its highest since Easter 66 days ago. The Aussie Govt 10yr is unchanged at 0.87%. The China Govt 10yr is also unchanged at 2.91% even after returning from holiday. The NZ Govt 10yr yield is lower, down -3 bps at 0.91%. The UST 10yr is holding lower at 0.64%.

NZ DOLLAR HOLDS
The Kiwi dollar has risen steadily since it opened this morning, now at 64.4 USc. Against the Aussie we are also firmish at 93.5 AUc. Against the euro we are holding at 57.2 euro cents. We are softer against the yen. That means the TWI-5 is little-changed overall at 69..2

BITCOIN ALSO ON HOLD
The price of Bitcoin is little-changed from this morning at US$9,132. 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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End of day UTC
Source: CoinDesk

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64 Comments

Trans Tasman Bubble?
"Sydney Airport's international travellers, a lucrative source of income, will not return to pre-COVID numbers until 2024, analysts warn as the outlook for aviation darkens."

12
up

'On a per-job basis, monthly earnings declined by -13% pa, the largest drop on record over the last 20 years. (H/T Infometrics)'

One wonders just how bad things might get later this year when government support ends.

Agreed. Popcorn.

Once you remove the public organisations (who were ineligible for the wage subsidy but were expected to pay normal wages through lockdown) then that drop in theory must be a lot more than 13% across other orgs?

10
up

Which is why the recent article on improved home affordability using quarterly wage statistics and monthly house prices was a bit shaky.
A 13% decline in monthly earnings vs a 7.3% decline in house prices at the bottom end of the market doesn't look more affordable.

You can imagine the banks looking at these numbers and quietly shitting themselves at the possibilities wrt mortgage lending.

37
up

In an astonishing decision, the National Party has given a higher ranking to 'invisible man' Jian Yang. Read this. He won't talk to the New Zealand media and indicated the decision is 'indefinite'. The Labour Party also has a similar selection in Raymond Ho. That is equally astonishing - but at least he slipped lower in their list.

Some pretty worrying signs right there....

Potentially you could read too much into this. Chinese people are a significant proportion of NZ's population, especially in Auckland. Their elevation might have a lot to do with this demographic reality.

23
up

He won't talk to the New Zealand media and indicated the decision is 'indefinite'.
Doesn't look good though, does it?

15
up

Michael Riddell wrote a lengthy article on this today, it's quite staggering. What would be my chances of moving to China, becoming a senior state official, refusing to give an interview in Mandarin and buying a house?

11
up

Same as the warriors winning the premiership this season

"As critics pointed out, the FPP system tended to create Parliaments quite different in composition to those that the voters appeared to want. The answer, some people argued, was a system of proportional representation in which each party's share of the seats in Parliament would be close to its share of the overall vote."

https://nzhistory.govt.nz/politics/fpp-to-mmp

That bad? Sheesh

The Chinese aren't stupid enough to allow for an avenue like that. Kuiwuis on the other hand....

19
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Possibly. Or possibly these two have infiltrated the two main political parties for CCP paymasters.

It seems unusual overseas Chinese want to enter domestic politics unless to push back against the CCP. These two seem to push for China trade.

13
up

Chinese born NZers need representation, ideally not answering to PRC, but not sure if that is really possible given Beijing's reach - chinese are all hostage to PRC if they have family or friends there. What would be worse is a chinese party that could likely hit 5% threshold and forever hold balance of power. They could also game it by taking over an electorate (already 20-30% in some parts of Auckland) and could work seriously to NZ's disadvantage. Several chinese per main party is a reasonable compromise, they will inevitably be somewhat PRC aligned but hopefully held in check.

23
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Ideally if we limited voting for central government to citizens only (NZ is one of only 5 countries in the world that allow residents to vote after just 12 months of living in NZ) then this would become a non issue.

Some might then complain that the Chinese could not then vote as they cannot hold dual citizenship with China if they have NZ citizenship.

That's when I say, choose a side. Either commit to one, or the other. Want to have a say in NZ and help it's long term prosperity? Then commit to the country full time as a citizen.

11
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I’d like NZ Citizens who are non residents for tax purposes to be barred from voting. If you are willing to drop Kiwis in the mess like the Greens proposed yesterday then you need to swim in the fetid financial swamp you voted for.

I wonder how many other countries allow non resident Citizens to vote.

I know that the USA does - is that because their citizens still have to pay US taxes no matter where in the world they are?

Exactly EE. Instead they're focused on prisoner voting rights

Haven't they learned that some animals are more equal than others?

Interesting. I don't live in NZ and I don't pay PAYE to the NZ Government. My trusts are resident in NZ and they pay tax to the NZ Government at 33%. Now tell me Ex, why do you think I should not vote? is that because the government has no power or influence over my assets? or is it that I should just pay tax because of everything the NZ Government provides for me personally? Think about it.

Are those assets yours, Wazim, or your Trusts? If you're arguing you should still have rights because your Trusts have assets here there's a decent argument you should still be a tax resident due to your enduring ties to the country. I'd be careful about being too indignant about this in case the tax man thinks you're trying to have this both ways.

Hi GV, no I am legit to the nth degree. Tax exile, trusts are legal and tax paying. My supposed 'indignance' is with the implication that NZ is so damn good that us ex-pat kiwis are all clamoring to get home and have you pay more tax to enable us to stay in the Pullman for two weeks, nothing could be farther from the truth, you are living in a slowly devolving socialist nightmare. The trusts pay tax to both local, regional and central government so are entitled to whatever 'services' that brings (can't think of many right now...) Me? I have no personal financial ties to NZ, only familial and social ones. The NZ Government does exactly zero for me and that is how it should be but as the trustee of the trusts, I have a strong imperative to vote for the candidate and party that best reflects my wants and as a New Zealand citizen, this is an inalienable RIGHT (at least it is at the moment)

20
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In an astonishing decision

I'm not astonished. The govt and opposition are taking the pis. I know of a lawyer who's requested FOI documents related to Yang. Lees-Galloway's office has refused.

It's FOI in the US - our equivalent is OIA.

10
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Yes. The point remains. NZ is a laughing stock from the POV of the CCP and those who understand what can be got away with.

What point? That you're an American?

Dp

21
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"In an astonishing decision, the National Party has given a higher ranking to 'invisible man' Jian Yang. Read this. He won't talk to the New Zealand media and indicated the decision is 'indefinite'. The Labour Party also has a similar selection in Raymond Ho. That is equally astonishing - but at least he slipped lower in their list."

Perhaps Labour and National could put the country first and deselect these two.

28
up

They must go if they will not give a reasoned discussion of the CCP. I'm a POM and rather proud of it and if I was was Chinese I would be proud of that; however as a POM I can discuss the merits and faults of UK govts during my lifetime. Surely an MP in our parliament of Chinese origin should give an informed explanation of significant Chinese issues such as Tibet, Uighurs, Falun Gong, Taiwan, Hong Kong, origins of Covid-19, S.China seas arbitration, etc. National and Labour must produce MPs who can express opinions of their own not just parrot the latest CCP propaganda.

16
up

And explain why Mao is still revered; being the biggest mass killer of all time.

kc - there is cause, and there is causal.

Mao only gained traction because of mass angst. That's repeated story, many places and many times.

And Mao didn't cause the Dresden firestorm (social narratives always excuse themselves)

"Power speaks from the barrel of a gun" as the 120 million Chinese dead found out all too late; can't see the connection between Bomber Harris( merely brutally militarily incompetent) and Mao really, but the Communists in China and Russia ;(and the Nazis) certainly had a lot in common, having origins in bands of armed thugs who, through sheer ruthlessness certainly inspired enough general "angst"(I'd use the word terror, really) to develop brutal totalitarian states. The numbers killed at Dresden etc would have barely been mentioned on the Russian Front, and never in Mao's China.

Oh dear, history from the back of a bubblegum wrapper. Let's compress all opposition to dominant elites into a "one size fits all they're all thugs" headline. Grow up. Read history. And recognise that, yes Dorothy, our wealthy have not always been benevolent role models.

How many MPs and their party are captured by corporate funding without explicit disclosure to the general public?

19
up

Yes its not just the spy.
Key was captured. Bridges was captured. Parker of Labour was captured. And there will be many more. That is why NZ is falling out with 5 eyes partners. NZ does not make strong statements about things like South China Seas, the current Indian land grab, backing Oz about a Wuhan inquiry etc. Its becoming embarrassing. And down right dangerous.

And down right dangerous.

In what way?

If we side with China I believe that we will end up divorcing ourselves from our good relationship with Oz. The UK. The USA. And with the aggression that China is now showing it may not be too much of a stretch to imagine that there will be military action in the not too distant future. Where would that leave NZ? Well who knows, but I would not put it past China to take advantage during hostilities...

We'll not side with China, no way Australia would leave the back door open.

dp

She's gaggin forit;-)

Out there for all to see.
Both National and Labour on bed with China.
Do NZF and ACT read the masses and act?

Whatever makes our Masters Happy for Rock Star Economy.

Raymond Huo is happy to give interviews!

https://www.stuff.co.nz/national/politics/116715353/labour-mp-raymond-hu...

Surprised he didn't get moved further (way further) down the list.

That was a direct Jab at Jacinda

I know!

34
up

It's not the fact that they're Chinese, it's the fact that they won't talk with the media. No publicly elected official should have such a right. C'mon Mr Muller. This is starting to stink.

20
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NZ politics is a joke but I'm not finding it funny at all.
Screw the pot referendum, let's have a 'walk away form the CCP' referendum.

Side note: is 27 high enough to return to parliament?

They may, potentially correctly, feel they have no obligation to talk to the media, if there is nothing sinister. It's quite possible there's nothing sinister, in which case why would they feel they should oblige the media?
I am not saying there isn't any sinister, but it's quite possible there isn't.

I bet he talks to chinese NZer's. Agree is a bad look, but he is in a pretty tough spot as all questions will be of the type that will piss off wider party or his core support base however he answers, and is difficult to avoid question as all politicians do when you are not comfortable in the language. Discretion is his lowest cost approach.

Also the fact that Yang admitted lying on his citizenship application, appears likely to be a spy, and National seems completely unbothered by either prospect.

The National Party should consider changing its name to something less professing of nationalism. False advertising.

Dutch pick up on Doughnut Economics and being implemented in Amsterdam. Notice that affordable housing for 'everyone' is a key pillar in what they're setting up.

https://www.bbc.co.uk/reel/video/p08hppxt/how-the-dutch-are-reshaping-th...

If housing is affordable people are more able to raise children and more of their money is recirculated through the local economy rather than being sent offshore via banks. Makes a lot of sense. We just need less self-absorbed older folk in governance and central banking to govern NZ for more New Zealanders, and to aim at building a productive country rather than their own portfolios via credit bubble economics.

On the equity markets, since the start of the Covid fall, say around mid February, the DOW is roughly -13.7%, S&P500 -10.8%, FTSE -16.8%, ASX200 -19.1%, DAX -12.3%, and yet the NZX is only -7%.

Down to our Covid successes, or printers going brr, or what?

Take out the heavyweights of atm and fph and it is likely quite dismal

22
up

CHINESE 'SPY' RESELECTED

Now as out in open are doing blatandly with attitude like it or leave as we do not care the public sentiment.

Lot of Chinesse money in play in NZ politics. Sad but true.

Ironic given plenty of Kiwis have the cheek to call Americans stupid...

He only represent China's interest in NZ

https://www.stuff.co.nz/national/politics/116715353/labour-mp-raymond-hu...

Real shame.

Use democratic rights and #boycottanypartywithCh...

Lots of Russian money in play in British politics - but it's not necessarily associated with the Kremlin.

It seems like the easiest Corona virus management strategy may be elimination. Australia was very close at one point. Luckily the new cases have remained geographically isolated but that's unlikely to last.

Close but no cigar. I wonder did any opposition MPs claim that Australia had a better response to Covid than NZ? It seemed to be a popular theory not long ago, I don’t hear it so often now.

So the National party is well and truly in the pocket of the Chinese Communist Party? it seems so. Shocking that he was on the Foreign Affairs and Defence Select Committee - don't we have vetting by NZ SIS?
https://www.newsroom.co.nz/newsroom-video/46657/newsroom-investigation-n...
https://www.newsroom.co.nz/2019/01/09/280568/follow-the-money-and-the-in...