Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
ANZ cut its one year fixed 'special' home loan rate to 2.55%, the lowest in the market and below all its main rivals. They cut most other rates as well. The Co-operative Bank and TSB both also cut fixed mortgage rates too.
TERM DEPOSIT RATE CHANGES
ANZ, Cooperative Bank and Bank of China all cut term deposit rates.
FINELY BALANCED
The QV House Price Index shows property values have flattened out but it's too early to say if they are at the edge of a cliff or will start to rise again.
COURT OF APPEAL BACKS UP HIGH COURT RULING THAT HARMONEY FEE IS A CREDIT FEE
The Court of Appeal has backed up a High Court decision that the fee peer-to-peer lender Harmoney charges to borrowers for arranging loans is a credit fee. However, the Court of Appeal judgment, issued on Wednesday after a hearing in mid-March, says the High Court did err in finding that the investors were creditors. Harmoney has been ordered to pay the Commerce Commission's costs.
CAPPED
The Government says a planned +1600 rise in numbers of migrant seasonal workers next year won't now go ahead as 'more New Zealanders will be available to do this work'. That means 14,400 of seasonal migrant workers will be allowed to enter the country in 2021.
A WATER DEAL
Government puts a deal on the table for local authorities: You give up some of your autonomy and team up to meet new water standards, we help cover the costs. The carrot is $760 mln in subsidies.
WMP UP +14%
A big surprise rise in dairy prices, driven by whole milk powder prices, affirms new season farm gate forecasts. But can they hold up at this new level?
CAUGHT, OUT
Australian high-cost short-term lender Quadsaa (trading as Pretty Penny and PPL) has undertaken to write off all outstanding loan balances in a settlement agreement with the Commerce Commission. It has also quit New Zealand operations.
LAST GASP?
In is what is likely to be just of historical interest, the RBNZ is reporting that the total value of New Zealand's housing stock rose +9.0% in the year to March, to $1.23 tln. That is a gain of +$40 bln in the first 90 days of 2020 (and only the September 2016 quarter was more). The split between owner-occupied and rental (business) won't be known until September 4. However we will need to wait until October to learn how the June quarter has been affected.
'TEMPORARY' BECOMING PERMANENT
The Australian Federal Treasurer said he will announce an extension to the wage support program on July 23. This, along with the Aussie banks agreeing to extend their mortgage support program, probably means these 'temporary' programs are going to have a long life, especially as Australia seems to be moving into a pandemic second wave that will likely require widespread and increasingly serious lock downs. The economic 'cliff' these subsidy programs bring is hard to avoid. But the Aussie Government budget deficit for the current year would reach AU$240 bln - and that is before an expected announcements of tax cuts to support the economy. A budget deficit of 25% of GDP is not unlikely now, a huge turnaround from a Government that claimed it would be in surplus by now less than a year ago
HIDING THE REAL SITUATION
Aussie regulator APRA is now involved in extending regulatory distortions to ensure that non-performing loans are not classified that way by banks. It is all being done to sanitise the real impact of the deferrals policy. Regulatory collusion, even leading such distortions, are somewhat surprising as this same regulator used to be the champion and guardian of honest, transparent reporting by banks. ASIC is complicit too, turning a blind eye. At some point investors in bank shares will discount their investment. Will the bank's auditors join in the sanitising? Today, ANZ's share price is down -1.2%, CBA is down -0.1%, NAB is down -1.5% and Westpac is also down -1.5%.
EQUITY MARKET UPDATES
On Wall Street, the S&P500 gave up more ground at the end in a sharpish sell-off, down -1.1% on the day. Shanghai has opened up +0.3%, to build on the strong gains earlier in the week. It is a market driven by upbeat market commentary from state run publications and a boost in liquidity making shares seem irresistible. Hong Kong is also up +0.3%, but Tokyo is lower by -0.2% in early trade. The ASX200 is down -0.5% in mid-afternoon trade. The NZX50 looks like it will close down -0.6%.
SWAP RATES UPDATE
Swap rates are probably unchanged today especially short rates. We don't have final 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 unchanged at 0.31%. The Aussie Govt 10yr is down -2 bps to 0.89%. The China Govt 10yr is holding higher at 3.09%. The NZ Govt 10yr yield is down -4 bps however to 0.96%. The UST 10yr is also down another -2 bps at 0.65%.
NZ DOLLAR SOFTER
The Kiwi dollar is marginally lower today, now at 65.4 USc. Against the Aussie we are firmer at 94.2 AUc. Against the euro we are little-changed at 58 euro cents. And that means the TWI-5 is now just under 70.2.
BITCOIN UNCHANGED
The price of bitcoin is unchanged since this time yesterday at US$9,313. 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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89 Comments
Here comes that surge is US COVID death rates - 993 dead in a day (highest since June 10th): https://www.worldometers.info/coronavirus/country/us/
Hospitalizations rocketing - up nearly 2,000 in a day nationwide - at 42,000 highest since May 19th: https://covidtracking.com/data
Death rate only going one way now, as ICUs get overloaded:
https://edition.cnn.com/2020/07/07/health/us-coronavirus-tuesday/index…
Yet again Frazz, you need to look at the long term not at the happy clappy here and now.
I was one of the vocal people calling for a lock down, it came but it should have wen done sooner, which would have produced a by far shorter duration.
Sorry that I do not accept mediocre performance.
Rah rah..I should have brought more xero shares when they $6...but am I moaning now? What exactly do you want, we cannot change the past but as here and now things are positive. Election time soon. Sweden economy has contracted more than Finland and Denmark who both went into lockdown.
OMG. Talk about selective memory.
Who would have thought that Labour had the balls to call a LD. Not a single person alive. But only because they had to because they were not prepared after saying they were.
That is the cold hard facts of what actually went down!
FFS some people have some serious memory problems.
My memory was our NZ medical establishment & unions insisted on a LD because they had seen what happened to hospital staff in Italy. It was people power that forced the government's hand. Of course a royal commission may prove the policy and decisions were all in place and it would have happened without our Doctors and Nurses making public appeal - but I won't believe it until then.
Here comes that surge is US COVID death rates - 993 dead in a day (highest since June 10th):
Yet another example of why you can't just take raw numbers to do with COVID and draw conclusions from them without knowing the actual details of what the numbers mean in context.
1. Numbers on a Monday are always low because they're after a weekend, and the numbers reported on Tuesday and the rest of the week pick up the slack from the lower weekend and Monday numbers. Deaths don't stop over weekends or Mondays but many of the people who collate and report the numbers do.
2. This last weekend was a holiday weekend in the US, 4th of July, so the numbers over the weekend and Monday were likely much more delayed than usual, hence the big uptick in the Tuesday reported deaths numbers.
3. If you add up the deaths numbers from Saturday to Tuesday last week it comes 1,706, as compared to 1,676 this week.
How many of those deaths are of people aged under 49, with a BMI of less than 25 and no comorbidities such as hypertension, diabetes, cancer, etc.?
Just saying "deaths" gives the impression that the virus is claiming people across the board, when this is not the case. Context is really important to avoid misinforming the public.
The infected person who breached quarantine and did a runner no matter how brief needs to be made an example of as a deterrent to others.
You can't close borders, have 5 million in lock down for 4 weeks, spend considerable amounts on quarantine accommodation and staffing, and have the vast majority or returnees quarantine for 14 days for some jerk to nullify all that by spreading the virus throughout the community for selfish interest.
The word "castration" comes into my thinking.
Seriously OB1??? Labouur are useless and have taken bloody ages to sort this and still failing but somehow you tie it back to National, tribalism at it's best.
If you want anything done badly and to cost more you get the Govt to do it, it dose not matter which party we are talking about, they are all as useless as each other.
Hang on, he's only committed a specific Covid quarantine offence..... less deducted time for a first offence, less time for the 'racially-targeted' arrest, less time for promising not to do it again, less time for solitary confinement in 5-star hotel torture chamber, less time for not provided with his favorite packet of potato chips..........equals slap on the wrist with wet bus ticket.
Let's hope the ratings agencies whallop them, come out saying "we don't know what your books look like anymore, because you are cooking them. Therefore your ratings are dropping from A+++ to C----" or whatever system they use.
Let's be honest though, there isn't much hope of that considering those same rating agencies were involved in similar corruption/collusion during the GFC.
What happened to honesty?
The financial systems are morally & ethically broke, especially for main-streeters like most of us. The elite are becoming richer by the second & the tax-payers will under-write the tab. This is grand theft larseny on a global scale. We are much closer to the revolution than we thought.
1 in 8 over the age of 15 in NZ on antidepressants. The research was carried out between 2008 and 2015, but experts say these figures have increased dramatically in the last three years (2018). I wonder what we have at present... 1 in 6 would be a fair guess, maybe 1 in 5....
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12156858
Maybe today is the day that most NZers realised that their economy can still run reasonably well without high numbers of international tourists, immigrants and students. Export/Imports are still ticking along, primary production has been running all year, and employers are now looking for staff. Maybe 2020 is more positive than initially thought. And we’ve all had a chance to stop and reconsider our priorities and rushed lifestyle.
That will be a boost to the economy as they transition from institutional committee meetings & Policy etc to more productive enterprise. Hort workers are in big demand at the moment as the temp offshore workers can’t get here - that kind of real work adds to NZ Inc income
The treasury may beg to differ, 201,000 on Jobseeker or CIRP, up 50,000 since March. https://treasury.govt.nz/publications/weu/weekly-economic-update-3-july…
At some point investors in bank shares will discount their investment. Will the bank's auditors join in the sanitising? Today, ANZ's share price is down -1.2%, CBA is down -0.1%, NAB is down -1.5% and Westpac is also down -1.5%.
The smart money sold early and well over a year go in respect of ANZ.
I cannot see how investors could now make informed decisions about whether to invest in Australian banks or not when their regulators are telling them to hide non-performing loans. That sets them up for potential class action law suits for non-disclosure in the event of a sharp loss of share value if those loans get realised without being recognised...
Australian homeowners are headed for a $75 billion home loan default when the government’s wage subsidy scheme ends in a few months, new research shows. Luckily we are diffrunt?
https://au.finance.yahoo.com/news/home-loan-repayment-default-010938681…
Australian housing market keeps buoyant. Days to sell lowers.
https://www.domain.com.au/news/homes-are-selling-faster-than-last-year-…
Melbourne offers cautionary tale as house price falls worsen.
https://thenewdaily.com.au/finance/property/2020/07/01/house-prices-fal…
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