Here's our summary of key economic events overnight that affect New Zealand, with news the gold price has made a run at its highest ever level, one reached in August 2011.
But first up today there was another dairy auction overnight and prices were basically stable, even if slightly on the soft side. They were down -0.7% overall in US dollar terms and down -1.9% in New Zealand dollar terms. The key WMP price actually rise +0.6% as did the cheese price, but most other lines dipped, and especially butter that was down almost -5%. The key here however is that overall it cements in the prior auctions +8% rise and so this one poses no threat to farm gate milk prices.
In the US, retail sales rose at a +1.9% rate from the prior week, but are still down -7.5% from the same week a year ago and that is a steeper year-on-year decline that we saw last week.
The Chicago Fed's National Activity Index was up in June from May with a minor +4.1% gain given that May was a relatively minor rebound from the deep April contraction.
In China, we are keeping an eye on their flooding situation which seems to be worsening. The alert level at the massive Three Gorges Dam is at its highest level now. There is potential for a major disaster here.
The Australian government has expended its payroll support program for another six months through to March 2021, but cut the level of payments sharply, especially for part-time workers. It is estimated that 2.5 mln people will move off the program in its revised form leaving only 1 mln on it. And it is expected that ½ mln will move on to their unemployment benefit.
After nearly five days of intense haggling, the EU has done its €750 bln stimulus deal. It is a deal notable for its firsts: European countries will raise large sums by selling bonds collectively, rather than individually; and much of that money will be handed out to member nations hit hardest by the pandemic as grants that do not have to be repaid, and not as loans that would swell their national debts. This is also a deal where Germany and France sided with the poorer Southern members, and although acrimonious probably points to a new more federal union that will stand up to the new autocrats in the east.
The European equity markets were positive about the outcome, rising modestly overnight after pricing in a good gain in anticipation of the deal. In current trading, Wall Street's S&P500 is up +0.6% partly on the same news. Yesterday, and quite separately, Shanghai was flat (+0.2%) while Hong Kong (+2.3%) and Tokyo (+0.7%) both posted good gains. Locally, the ASX200 ended the day up a strong +2.6% on the Aussie wage support announcement, and the NZX50 Capital Index was up +1.6% on strength with two icon stocks, FPH and A2M, both of which have pandemic advantages.
The latest compilation of COVID-19 data is here. The global tally is 14,775,000 and that is up +208,000 since this time yesterday. Global deaths reported now exceed 612,000 (+5,000).
A quarter of all reported cases globally are in the US, which is up +60,800 from this time yesterday to 3,989,400. US deaths now exceed 144,400 and a death rate of 436/mln (+2/mln). The number of active infections in the US is now up +12,000 in a day to 1,982,600.
In Australia, there have now been 12,428 cases reported, another +359 since this time yesterday, and still concentrated in Victoria but growing in NSW in Sydney's suburbs. Their death count is up to 126 (+3) and 38 people are now in ICU (+5). Their recovery rate has slipped back further to under 69%. There are now 3761 active cases in Australia (up +207 in a day).
The UST 10yr yield has dipped by -1 bp to 0.61% and that is its lowest level in three months. Their 2-10 curve is little-different at +46 bps. Their 1-5 curve is soft at +13 bps, but their 3m-10yr curve still at +51 bps. The Aussie Govt 10yr yield is down -1 bp at 0.87%. But the China Govt 10yr is down -2 bps at 2.95%. The NZ Govt 10 yr yield is down -3 bp from this time yesterday at 0.86%.
The gold price will start today sharply higher at US$1,843/oz which is a large +1.5% daily rise or a +US$27 gain overnight. Much of the gain however relates to US dollar weakness. (The highest price ever was US$1918/oz on August 22, 2011. The highest daily close was US$1895/oz on September 5, 2011.)
Oil prices are up about +US$1 today. They are now just under US$42/bbl in the US and the international price is just over US$44/bbl.
And the Kiwi dollar will start today sharply firmer against the greenback (which has sunk in overnight trade), and is now at 66.4 USc and almost its highest level of the year. But other currencies have also gained sharply against the US dollar so we are down more than -½c at 93.1 AUc. Against the euro we also stable at 57.6 euro cents. That means our TWI-5 is now at 70.3 and still broadly the level of the past three weeks.
The bitcoin price is +1.8% firmer at US$9,369. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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113 Comments
Just looked at the increase today 12%. Wow.
I've read, watched videos and talked to people about this happening for over a couple of hundred hours I'm guessing, I was extremely confident that this was going to happen but as someone who isn't an expert on this by a long shot, it is a completely surreal experience to say the least watchingvot actually play out on real life.
Think I'll splash out and get a pie for lunch, maybe two.
Above all stay calm and don't spend it before it is in your hand.
NZ mint yesterday.
1kg Silver ABC bar - $1109 per kg (2-3week lead time
I think it was Masher that posted link to an Ozzy site yesterday that you could get them a bit cheaper and faster delivery.
I think silver is going plus 50% by the end of the year and exponentially higher after that, so a few bucks extra now isn't something I am concerned about. It wasn't long ago that silver increased 8.5 times it value and this time arround an excess of 10 times. At that return even $10k will get you a very nice new car after the 30% tax on the profit.
If you use NZ Mint, I'm sure Int.co would like a shout out for advertising purposes.
Yes there is risk but not that much, silver is the lowest it has ever been in dollar buying power.
Little down risk and a very high return if it dose go, is good bet logically in my book.
Watch this, long winded but it needs to be. I've watched it twice now and I will watch it a couple it more times to get my head fully arround it and factor it out logically.
https://youtu.be/9EOPKizJ_Y4
Regarding the 30% tax, don’t you think it’s bollocks that the IRD deems silver and gold a speculative investment (and so capital gain is taxed) yet someone leaving their home empty (and therefore is using for speculation rather than rent) is not taxed on the capital gain?
Not the only way. This sold for $29,500 within 24 hours of being listed. https://www.abouttime.co.nz/rolex_watches/rolex-oyster-perpetual-submar… It could be worn on a wrist through customs and sold anywhere in the World for the same price.
Perth Mints rates are well below everyone else.
Yes, theres postage to pay from WA, but even with that factored in its far cheaper than any alternative in NZ, and will be with you in 3-5 business days.
Postage to NZ works out to be cheaper than the premiums dealers are charging.
Me? I’ve been buying coins from New Zealand Gold Merchants. My focus is on precious metals as an alternate currency so I prefer coins. Gold has a slight problem that it’s too valuable for small transactions so I bought Silver Maples for that. They appear to have run out of Silver Maples and that happened with the Gold Kangaroos as well. A kg of Silver is now NZD 1,150. You would need a big safe to store significant value in Silver. Gold and Rolexes (of the right type) are easier to store and liquidate.
When I first got some silver I was paranoid about it getting stolen and tried thinking of different spots to hide it.
Now I'm by far more relaxed, in reality there is very little chance of being broken into and someone going through everything looking for a stash. A tone of places to put it. The roof space is one spot that no burglar is ever going to look. If you are freaking rip off a section of wall lining and pop them in the wall, re line, plaster and paint.
Basically anyone ripping a house off is thick and they will go your high end easy to grab and run items. They arent going to spend hours goiing through every nook and cranny.
The story of silver should be understood by everyone as it's the most suppressed asset price on the planet and the actions of largely JP Morgan are nothing short of criminal. Everything wrong with our financial system seems to be illustrated by the manipulation of the silver price (as opposed to house prices where there is concentrated efforts across the board to make prices rise or stop them falling). But now it appears that the whole cycle is unravelling. The huge short positions held by JPM should be hurting them. I cannot really understand what is going on and you can't help wondering if it's more chicanery orchestrated by JPM to make a buck. Very hard to tell. But it's clearly obvious that silver and silver miners seem to be one of the better bets of 2020 right now.
And very few realise that yet. It is only just being spoken about on Int.co now and there will be a good size lag untill articials in the mass media start.
There are supply restrictions with it at present, you can start to get the over all iew of how crazy it will go if the greater public becomes more aware.
We only need to look at the amount of increased interest on this site in the past two days to get an idea of how the narrative has changed.
Last week if you mentioned it, you were a fruit cake doom and gloom nut job. Now it is I'll take a look and in a week to a month it'll be buy, buy, buy, but by then it I'll be extremely hard to get.
This is really long winded but it is an extremely complicated yarn that isn't easy to explain. It's a must watch in my book.
https://youtu.be/9EOPKizJ_Y4
JPM got out of their short positions in silver in April. They made a profit and are now all long, making huge gains on all those suckered in by their regulator free manipulations of silver, and of course gold.
Wrong. JPM are never out of their short position on silver. You're probably meaning to say they've reduced their short position. Remember, JPM is one of the largest owners of silver in the world. Some of their short positions on silver have been equivalent to 20% of the amount of above ground silver.
" I just need the NZD to drop, but I’m just as wrong as all of those commentators that dumped on Kerr a few weeks back.' Mr Kerr the perennial NZD bull surprisingly called for NZD short term weakness in his last NZD commentary. Doing the opposite of what Mr Kerr has forecast in his weekly columns has brought better returns.
RBNZ , this morning announced need to provide enhanced liquidity has diminished
it will be reducing its interventions via its term auction facility (TAF) to weekly (from daily)
NZD/USD technically has breached significant upside resistance.
How does the EU deal work? They are raising the money by selling bonds, but giving it to the countries who need it as grants? But I thought when you bought a bond, it was effectively an investment that would be paid back with interest? So how will those bonds be paid back and over what term?
The 'Frugal Four' acting all high and mighty here are highly dependent on much of the rest of Europe to buy their goods and supply them with skilled labour. Walk into a hi-tech workshop in Austria and every third worker you spot will be from Southern or Eastern Europe. So they owe a significant part of their economic success to the structural inefficiencies in the East and de-industrialisation in the Southern states.
Also, a lot of the funds have been earmarked for renewable projects, which should reduce some of the region's dependence on Russian gas.
M86 - It doesn't. Same way an increasing amount of debt doesn't, globally.
What I wonder about, is how it plays out when the masses catch on. If debt is unrepayable, what are money and assets 'worth'?
An interesting link; worth the read: https://www.counterpunch.org/2020/07/20/what-lies-ahead-2/
Could the massive flood in China be the final straw that breaks Xi's grasp on power? Or will it enhance it? Presumably the Chinese people will continue to do what they are told, but will there come a point when they start to push back and the CCP moderates gain legitimacy from the Stalinists? Especially if food prices go up. Plagues and famine stalk the land.
The fall of the USSR was bound up with high price of wheat and the low price of oil. Maybe Stalinist China will fall with high rice, high pork, and high oil prices.
I think a soft coup is a likelier outcome, mainly because no one seems to think it possible. The CCP has it's own internal democracy, and it may choose to go back to the more moderate policies that worked so well in the past, in order to maintain the CCP members' privileged positions in society. The CCP members are not stupid. References to the wisdom of Deng may be the only outward sign of that change. They have sold a dream to the Chinese which is basically "We too can all be rich, just like the Americans".
Maybe, but I doubt they expected how suddenly and completely the entire Western world has turned against them. Everyone now agrees that China is dangerous and untrustworthy. No one likes them or is willing to give them the benefit of the doubt. Doors are closing against them in a cascading fashion. They thought democracies were lazy and divided, when in fact they only appear so. Trust is a hard thing to regain.
From my limited knowledge of these dams, if they opened the floodgates, the people and stuff downstream suffer, but not the dam itself. Waitaki dam is designed to let excess water, and the occasional boat go over the top of it with no damage to the dam itself, but very limited control or influence on downstream flooding. So what is the dam problem then? Trust me, if lots of people and property downstream of 3 gorges suffer, will Xi and the CCP care?
'The Australian government has expended its payroll support program for another six months through to March 2021, but cut the level of payments sharply, ................'
It indicates that now Aussie government will provide cushion for worst affected, who are unable to do business due to border restriction with clarity till March 2021 for those business.
An outlet in Sydney airport will survive but not at Auckland Airport as government in NZ is unable to differentiate between business that now are genuinely affected and need support than other businesses which have started to operate - may be with lower volume but have started work unlike many that are still shut for no fault of their.
Have a friend who operates in both the country and it is his first hand experience.
So you think the Government should support a small outlet at Auckland Airport indefinitely until International travel starts? Maybe they should close down like Travel Agents and come back when the time is right? One thing I have learned prior to Covid 19 - you need a more than 1 string to your bow these days.
I doubt many of the business currently facing trouble will be coming back at all. The convenience and cost-effectiveness of e-commerce has a lasting effect on consumers. Fewer people are coming back to brick and mortar stores in advanced countries that have fully reopened.
Are you suggesting that all travel agents should shut down and what about many businesses/outlets that depended on Tourist specially in tourist hotspot like Otago (Though many will survive with some business from domestic tourist or may also do well but not all)
Now government should look at businesses that have been worst hit and are directly affected by border closure and try to see how they can be helped to survive (Unless one assumes that borders will never be opened in future) and can have strict parameters to support to ensure that is not being exploited.
Business still have to pay rent and other expenses from their pocket but subsidy will help to minimize/ cushion the loss to survive and avoid adding to unemployment benefit.
Unless people like you or government is of the view that borders will never be opened up. Understand is uncertainity as of now but hopefully will get clear picture in next few months and all those businesses should be given an opportunity to try and survive just like other businesses that have been luck and have started operation.
Yes I do think they should shut down.The government cannot conjure up "tourists" while the pandemic is still rife in the many countries around the world. I have booked 2 weeks in the Sth Island and plan to spend up and support the industry while down there (and many Kiwis are). But at the moment that's the best we can do. I also don't agree with the big handout to AJ Hackett...what next a bail out of the Warehouse?
Well you are entitled for your opinion but I feel all should be given a chance and support, some may need for shorter duration depending upon the nature of their business and some more but agree cannot be forever and also not in favour of big bailout and also not supporting manipulation of support to make profit.
I too am in favour of not opening up border for now as that is only thing preventing us from second wave.
Opportunity should be given to those businesses that have a plan to get off subsidies and need financial support to pay for execution. Opportunity or support shouldn't be money to keep the lights on in the hopes that customers arrive.
Speaking of hope, the underlying assumption that closed borders are the only deterrent against NZ tourism returning to its pre-Covid glory days and cashing in on the global travel frenzy seems ambitious.
Our main value markets are hurting economically, the cost of air travel might skyrocket in the near future due to lower economies of scale and in a desperate attempt to stimulate job growth, many foreign governments are incentivising local tourism.
Bit hard to have an Autarky (the technical term for a self-reliant economy). To take one tiny example of NZ's complete reliance on imports, the metals needed in everyday life include Al, Cu, Sn, Zn, Li, Ti, Cr, V, Mn, Co, Ni, Mo. So unless a return to prospecting and mining is part of 'self reliance', fuggedaboudit......
I am a biomedical engineer and luckily not affected but do know people from various industry and one of my neighbour has business in both Auckland and Sydney airport and could see when chatting with him and those businesses though small compare to brands like warehouse, etc but are no means cheap to let them shut down when know that in future should be fine and are excellent business.
What sort of "outlet"?. What sort of merchandise? Has Auckland International Airport provided any rent concession? Has Sydney Airport provided any rent concession? I think the bulk of the passing foot-traffic at Sydney Airport is domestic (when State Borders are open) Whereas AIA foot-traffic is/was largely overseas traveller's both in and out. And they aint coming back anytime soon
The UST 10yr yield has dipped by -1 bp to 0.61% and that is its lowest level in three months.
There is insatiable demand by private bank investors seeking liquidity and the return of their money - there just isn't enough pristine collateral to meet investor needs.
Now Bloomberg comes up with this rubbish to either frighten the horses or support central banks seeking any signals of inflation to justify their failed monetary actions. - A $1 Trillion Glut of Bonds Is Dwarfing Central-Bank Demand
Yes, there is a complete disconnect between what is happening and the suspicious "explanations" and stories we are told. The bond market is saying things are bloody awful and will only get worse. The unemployment figures are above recorded historical records. We are in a sort of phoney war period before the bombs start falling. Next comes the onset of a year of despair, followed by a slow rebuilding, based, hopefully, on firmer foundations.
We frown, sanctimoniously, on "What China is a doing to small Nations! Getting them into unrepayable debt, then taking their assets when they can't repay. Shocking! It shouldn't be allowed".
And yet what do we think is happening to us at an individual level?
Return of your capital is paramount at the moment.
The gold price will start today sharply higher at US$1,843/oz which is a large +1.5% daily rise or a +US$27 gain overnight. Much of the gain however relates to US dollar weakness.
Probably not.
In terms of gold, however, a rising price actually has less to do with inflation (or falling dollar, if you like) than you’ve been told. Historically, gold has been a very poor inflation hedge. That’s not really why gold is bid, as I described during last August’s deflationary “recession scare” which really was a whole lot more serious than a scare:
In other words, even on the inflation side we have to qualify gold’s value as a hedge. It doesn’t protect against inflation shifting from one moderate level to another; say, from around 1% to 2%. Or even 3% and 4%. As is clear on the chart above, gold skyrocketed when inflation was pitching double digits – meaning an economic situation that had gotten way out of hand despite the “best” efforts of officials.
" It wasn’t protection against the accumulation of small errors, it was in demand for the probability of the big one. And in the late seventies, even Congress had figured out that central bankers and Economists had no idea what they were doing. That’s when gold soared; when it was obvious to everyone but central bankers that central banks were failing.
This holds true even in the first decade of the 21st century; the last some Economists still associate with the Great “Moderation.” To most people, there was nothing moderate at all about the middle oughts, in particular. And that’s just when gold popped."
The metal had enjoyed its best run beginning around 2005 and lasting through the obviously not-inflationary Great “Recession.” That just so happens to coincide with first Alan Greenspan’s “conundrum” over longer bond rates that wouldn’t rise as he “commanded.” Link
Gold will rise due to what you say, and also this wee chestnut:
Is there anything more tedious than overseas Kiwis on six figure salaries in Europe trying to raise a petition on behalf of the 'team of six million' about why they shouldn't have to pay anything at all to come back temporarily to a country they treat as a passport office at the bottom of the world?
Government may soon come out with a policy that all who have travelled before lockdown and returning will be exempted to pay but those travelling now, knowing that will have to Quranatine on return will have to pay as making informed decession -being fully aware of the procedure and cost.
Wait and watch.
Common sense - sick of seeing these bull**** sob stories. Winny outlined SIX MONTHS ago to come home if that's what you were intending. Now the grass is greener they think they are entitled to $4k of taxpayer funding (which they haven't been contributing to). Not acceptable after the 'team of 5 million' have gone through the sacrifice of lockdown + everything that came with... Definitely room for compassionate consideration but vast majority should be covering it.
Compassionate consideration should only be given to those that have spent x amount of time in NZ over the previous x years.
This includes bereavement. I dont think the govt should be picking up the tab for overseas visitors just because a NZ taxpayer died/is dying.
I get it that some Kiwis may have been away for a long time and want to come back, but what bothers me is that I bet plenty come back for a relatively short time and as soon as the coast is clear, so to speak, they take off back to where they have come from i.e. they have no plans to stay in NZ long-term. It seems to me anyone doing this should pay for their own quarantine. How about making everyone pay for quarantine but allowing them to apply for a refund of the quarantine fee if they stay in New Zealand for x years. I know, it's probably way too bureaucratic.....just trying to think a little outside the square!
TTP and Houseworks' godfather is back in the headline again.. The famous Mark Bryers!
https://www.brisbanetimes.com.au/national/nsw/from-high-life-to-handcuf…
Personally I would put a freeze on any New Zealand First and Foremost obsessions with getting away with doing things wrong.
In fact it is becoming apparent that there are many and varied Ministerial bents and things that should be exposed and mandatory over many things and all expenses and predilections mandated, back dated and returned to the poor over taxed Ratepayers and Taxpayers.
These rorts and playing away, free ice creamed trips are so easily hidden behind the frame-work of their inclinations....and foibles.....not mine.
Please can we stop Taxpayer largess and easy pickings and any self serving items from becoming a way of life for ANY politicians and curtail things with an open tracker of expenses, whereabouts, fly-byes and incentives to others, not being apparent to any leader and any Newspaper to Act upon. National may have planted the latest bit, but like many items of Interest to the World......there is a lot to answer for, when playing the field, benefiting from making the rules and bending others over to their mandate and Borrowing heavily to their advantage....their lifestyles of the rich and infamous.
I could automate things, so that it would be wide open and transparent, if the Taxpayers so wish. Might be the first in the brave new world...we live in.
Keeping politicians on track, now there is a thought...
Anyone want to help Finance the APP......plus body camera, We could make a killing, selling it around the entire Globe. You read it here first.....Maybe made in China to start with.... Snap, Snip, Drone on.
Or Make America Great Again...Donald might be Highly Delighted...He likes to drone on.....and share his intelligence....too. on Twitter.
Billions could be saved. Keeping track of the wastrels......implanted to save us all, till kingdom.....come....and way beyond our current ....remit.
Tossing money around like confetti...at the behest of heaven knows...who. And blaming others when recorded for posterity.
Re-play, re-play....gotcha.
PS...could be silver plated.......too...make a killing. Pure gold.....mates...but Why are they selling.???...tis a mugs game.
AUS Mining stocks, silver often a byproduct of the gold diggers. Looked at physical via NZ Mint and decided same re spread. i believe Perth Mint does a crypto backed by gold (not to be confused with the empty vessel call btc), may do one for silver..check them out. Definite hold for me, but I am not a trader. And whats the alternative?
A heap about this at the top.
I buy from NZ Mint. Masher has a Ozzy contact that is cheaper if you hit him up.
I will be holding for the forseable future. The big game plan is to sell once the price is close to what stocks are. But thia is something new and there is no rule book so playing ot as it comes. Study, study and more study to figure out where it is going, then act accordingly.
That spread is pretty standard for silver coins, less for bars as there are less production costs in creating a bar. Also bear in mind PM dealers will buy it back at below spot. Stick with reputable brands like Perth and Canadian mint. Watch mike Maloney’s “hidden secrets of money”.
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