What happened Tuesday

A review of things you need to know before you go home on Tuesday; few rate changes, buoyant auction sales, overseas owners sell up, labour market weak, swaps unchanged, NZD stays firm, & more

28th Jul 20, 3:59pm by David Chaston

ID 22702269 © Daniaphoto | Dreamstime.com

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
WBS cut TD rates today. Update: ANZ has reduced its TD rates by about -10 bps.

BUOYANT
The sales rate shoots up to nearly two thirds at Barfoot & Thompson's Auckland latest auctions.

SELLING UP
Overseas owners selling twice as many New Zealand residential properties as they are buying, in quarterly June data released today by Stats NZ.

FEWER SEEK MORTGAGE DEFERRALS
A new weekly data series from the Reserve Bank is giving extensive information on bank customer lending flows going back to the start of the lockdown.

AN UNPLANNED PLAN
The Government will spend $52 mln propping up the export education sector but can't say when in 2021 it'll increase managed isolation capacity to let in international students.

LABOUR MARKET WEAKENS
Although jobs numbers continue to recover from the substantial fall in April, with rises in both May and June, both gains were small and left total job numbers down -20,000 over the quarter. And this is before the end of the payroll support program that is due to end in September. Also weak were earnings for the June 2020 quarter which were down -$304 mln (-0.9%) on earnings in the March quarter. This is the first time since Stats NZ began in 1999 that June quarter gross earnings were lower than March.

A BUMPY INSURANCE MARKET
In new RBNZ data released yesterday, insurers (general and life) reported that their annual revenues fell by -$1 bln, from $10 bln to $9 bln in the year to March. About -$400 mln was because investment income fell, but the rest was because of declining net earned premiums. For life insurers, that fall was -$174 mln (-11%) but for general insurers, they rose by +$434 mln (+7%). "Other insurance revenue & commission" more than halved, dropping -$840 mln.

EARLY WARNING SIGNS
Our hydro storage lakes are low at present, reaching the seasonal low point at the end of July when it is usual for them to be this low only by the end of October. This 90 day early benchmark might be indicating that our dominant 'renewables' energy strategy could catch us out later this year. Winter rains haven't been enough to top up Auckland during water reservoirs yet. They sit at an average 60% full now when they should be at 88% full to be 'normal' for this time of year.

PUSHBACK FOR TRUST BREACH
New Zealand has "suspended" its extradition treaty with Hong Kong and made a number of other changes (including export security clearances) in light of China’s decision to pass a national security law for Hong Kong. As such, it has fallen into line with its Five Eyes partners, especially Australia. The Government has also warned of the risks of visiting Hong Kong, especially if you have a record of criticising China in the past.

EQUITY UPDATES
Wall Street ended up +0.7% earlier today (S&P500). Now Shanghai has opened much stronger, up +1.2%, while Hong Kong is up +0.9%. Tokyo can't manage the same enthusiasm, up only +0.3% in early trade. The ASX200 is up +0.4% in early afternoon trade, while the NZX50 Capital Index is up +0.8% in late trade.

SWAP RATES UPDATE
Swap rates were probably unchanged today. 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 0.30%. The Aussie Govt 10yr is firmer by +4 bps at 0.93%. The China Govt 10yr is firmer at +2 bps at 2.92%. However the NZ Govt 10yr yield is marginally firmer at 0.84%. The UST 10yr is firm, up +3 bps at 0.63%.

NZ DOLLAR STAYS FIRM
The Kiwi dollar has stayed high at 66.8 USc. But against the Aussie we are little-changed at 93.4 AUc. Against the euro we are marginally weaker at 56.9 euro cents. And that means the TWI-5 is still at or just under 70.2.

BITCOIN FIRMER
The price of bitcoin has pushed on up well over US$10,000 and is now at US$10,913 which is another +8.5% jump, and +14% in two days. 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

Source: RBNZ

Source: CoinDesk

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.

72 Comments

by Andrewj | 28th Jul 20, 4:19pm 1595909999

Interesting seeing some dry patches on the soil map, I'm in a green drought, put on some fert today and the driver said it's pretty much dry but green everywhere. We just had 4 big frosts in a row and the grass cover is definitely slipping back, month of winter to go.
We have no rain forecast for a week, I talked to a cousin with a bore and center pivot, he said water levels are still way down on normal/average.
I have pretty much stocked up, uncertainty in markets but hopefully things work out. Store prices for sheep are bonkers, I see sheep prices in Australia are well back, up to $60 a head.

Just checked YR and they have no rain forecast for 10 days, going to a dry August, our wettest month.

by finite | 28th Jul 20, 6:05pm 1595916311

I place no value on yr for rainfall where I live - Murchison.
I find metvuw.com a very reliable rain forcaster.

by Andrewj | 28th Jul 20, 6:11pm 1595916717

the Tutaki valley is pretty unique, I always wondered why people live in Murchison, but as I spent time there with friends I've grown to like the place.

by gingerninja | 28th Jul 20, 7:07pm 1595920066

We were in Murchison last week. Lovely little spot.

by realterms | 28th Jul 20, 4:11pm 1595909493

"The Government will spend $52 mln propping up the export education sector but can't say when in 2021 it'll increase managed isolation capacity to let in international students."

Subtext: government telling the universities they're on their own.

by Masher | 28th Jul 20, 4:23pm 1595910214

Wouldn't want to be a landlord in Palmerston North.

by youngdumbandbroke | 28th Jul 20, 4:27pm 1595910431

I wouldn't be too confident about Dunedin as well

by xingmowang | 28th Jul 20, 4:31pm 1595910668

One week after the election, articles on education and tourism sector's complaining will grow like mushrooms.

Then, the government (Most like Labour + the usual suspects) will push for an open border policy to make both sectors as buoyant as possible.

What the government is talking about before the election (no international student in 2020) is just make sure they are in a safe position to win.

Things will change 180 degree after the election.

by Roger Witherspoon | 28th Jul 20, 4:48pm 1595911726

What, we can't trust our politicians? Oh dear, what shall we do?

by scarfie | 28th Jul 20, 4:57pm 1595912234

Suspects? Actually I quite like that. Could it be, shock horror, that you are developing a kiwi sense of humour?

by waymad | 28th Jul 20, 4:37pm 1595911049

"...first time since Stats NZ began in 1999 that June quarter gross earnings were lower than March.". Two possibilities occur:

Sales for June 31-52 have not yet hit the series
Firms with a June 30 FY end are still agonising about how best to apply the Fiscal Glitter to the turd that is the FY20 result

by iconoclast | 28th Jul 20, 6:44pm 1595918684

If you have any stranded asset write-downs, or, some derferred trading losses, or, postponed hidden costs sitting in a bottom drawer, get them out now

by VeryInterested | 28th Jul 20, 4:38pm 1595911084

Naughty naughty Perth Mint! https://youtu.be/DGgQcIR_rSQ

by Masher | 28th Jul 20, 4:42pm 1595911337

You must be real naughty if the two naughtiest banks out there call you naughty.

by Kezza R | 28th Jul 20, 4:50pm 1595911804

Or if you flick them the bird, refusing to supply them silver to fill their orders at the price the banks set......

by Kezza R | 28th Jul 20, 4:43pm 1595911404

It was only a few weeks ago the JPM wanted to buy silver off the Perth Mint in bulk and were refused.

by Roger Witherspoon | 28th Jul 20, 5:01pm 1595912510

Oops, did our dear leaders forget to install extra water storage when they brought in an extra 1,146,200 people over the last 20 years? 11 years of Labour and 9 of National. Oh deary me, what ever shall we do? Do they actually represent the people of New Zealand, or just pretend they do?

https://www.stats.govt.nz/indicators/population-of-nz

by Masher | 28th Jul 20, 5:01pm 1595912473

Dont forget what comes out the other end also!

by Roger Witherspoon | 28th Jul 20, 5:05pm 1595912749

What the rivers are dirtier downstream of the major cities? There was I thinking it was only dairy cows that did that.

The major source of shit in Nelson Haven turned out to be from the new Library, where they had connected the toilets to the stormwater. You couldn't make it up.

by Kezza R | 28th Jul 20, 5:21pm 1595913671

Bloody useless but apparently we must suport everything our own Party dose and not like anything the other Party dose. It is time we started calling thse useless pricks out.

I've got a great idea.... In this time of uncertainty with water availability let's fork out $30million to look at building another dam.
Yeah mate, I know bloody clever.

by Andrewj | 28th Jul 20, 6:36pm 1595918200

we dyslexics need to stick together. I find playing an instrument really helps me , reading music is like another language and opens up your brain. I have a really dyslexic child who has done really well ( great at math). I got all my children playing music from young and they all still play and love it, most Piano, one Violin.

If you get a classical guitar I can help you.

by Kezza R | 28th Jul 20, 6:46pm 1595918777

I learnt German as a language.
Now days it dosen't worry me, I hire people.

by Andrewj | 28th Jul 20, 6:59pm 1595919541

good on you, but everything turns to dust, all earths proud empires fade away,

by Houseworks | 28th Jul 20, 7:31pm 1595921486

Is the HB drought affecting you Andrew

by Andrewj | 28th Jul 20, 7:36pm 1595921795

No, it's very green we just have low aquifers after the drought that are not getting recharged, and the weather is prone to change suddenly. My crops are doing well, cattle are fat, in fact cattle have done way better than I expected. You would find it hard to get a car stuck though, the moisture has got gone deep into the soil. I put some fertilizer on today just to make sure I get the growth I need in spring, but I always worry about whether that fertilizer really is as good as they say, i'm low on mg
All the stock I have are short term, I will be out of them by christmas.

by scarfie | 28th Jul 20, 8:12pm 1595923960

I guess pissing on a paddock is a little bit different to pissing on a lemon tree?

by Kezza R | 28th Jul 20, 8:28pm 1595924939

Not to mention the insane amount of beer would have to drink per hectare to irrigate that way.

by Kezza R | 28th Jul 20, 7:47pm 1595922460

Waiting on this one to fall apart.

by Pathos | 28th Jul 20, 5:10pm 1595913026

Why no mention of gold and silver rises here?? The absence of such reporting is bewildering.
Have your sponsors forbidden it? Or has it just gone under your radar?
Gold price fluctuations are strongly correlated to $US/$NZ movements, so quite important wouldn't you say?

by Shamino | 28th Jul 20, 5:23pm 1595913793

They do it every morning, presumably as USA markets are closed.

Gold still trading on some derivative exchanges though - currently around 1955.

by Kezza R | 28th Jul 20, 5:26pm 1595913963

Careful they went down this afternoon, if the Labour / Green plungers see that they will be gloating that the rich investors got what they deserved.

by Rhumline | 28th Jul 20, 5:50pm 1595915457

Wow. You must have started early today!

by Kezza R | 28th Jul 20, 8:47pm 1595926039

Silver has taken a smashing this afternoon. Down $3US per oz.

by Albert2020 | 29th Jul 20, 6:35am 1595961331

Welcome to silver volatility.

by Uninterested | 28th Jul 20, 5:24pm 1595913898

Thanks for the warning about going to Hong Kong. I now have crossed that place off my future travel list!
2 Degrees uses Huawai equipment doesn't it. They are off my list of phone plan provider.
My list is growing quite long now!

by oldbloke1 | 28th Jul 20, 5:40pm 1595914849

Vodafone use Huawei routers - I'm typing this through one.

by The Person | 28th Jul 20, 11:16pm 1595935001

Telecom uses Huawei routers too.

by Averageman | 28th Jul 20, 6:51pm 1595919060

2 Degrees cell network is operated on that gear. Hence no govt contracts....

by streetwise | 28th Jul 20, 6:11pm 1595916704

Things could be worse......watching a doco on potential disasters awaiting us......apparently out in the universe there are 'primordial black-holes' randomly travelling around left over from the 'big bang'. They are no bigger than a sub-atomic particle but because of their incredibly large mass they could punch a hole right through earth in 6 minutes causing a trail of immediate damage about 100 metres wide, but the shock to earth would be such that it would trigger huge eruptions in so-called 'super volcanoes' of which there are 12 on earth located in such places as Naples, Iceland, USA, and you guessed it.....New Zealand. The crater of our own super volcano is in fact the whole of lake Taupo and it has erupted in pre-historic times. These eruptions are called pyroclastic eruptions because of the fast widespread damage they cause....needless to say even Auckland would become uninhabitable on account of the deadly volcanic ash which is basically a mixture of tiny shreds of silica (glass) and CO2 gas topped off with sulphuric acid rain caused by the released plumes of sulphur mixing with water in the upper atmosphere. Just one breath and it's curtains.

I would venture to posit that, at the very least, this occurrence may cause a ripple or two in the housing market, but I'm no economist and I would suggest that anyone interested should consult their own bank's economists for a definitive graphical extrapolation.

Have a good day.

by powerdownkiwi | 28th Jul 20, 5:55pm 1595915722

Then there's the one threat we CAN do something about (seems to me your underlying message was that we can't do anything so why bother) which is us s----ing in our only nest.

You wouldn't be attempting to avoid that one perchance?

by Te Kooti | 28th Jul 20, 6:04pm 1595916245

Excellent, if I find myself suddenly peering into a 100m gash looking at Spain I'll know what's happening.

by Fritz | 28th Jul 20, 6:37pm 1595918254

You DGM, you.

by Masher | 28th Jul 20, 6:45pm 1595918735

Theres only one thing more doom and gloom than that, and thats predicting a fall in NZ property prices.

by Ezy | 29th Jul 20, 7:14am 1595963698

Life's a piece of shit
When you look at it
Life's a laugh and death's a joke, it's true
You'll see it's all a show
Keep 'em laughin' as you go
Just remember that the last laugh is on you
And...

by Fritz | 28th Jul 20, 6:36pm 1595918208

China has just given us a right telling off. What a naughty little country we are.
I find it hilarious how sensitive they are.

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12351738

by Audaxes | 28th Jul 20, 7:00pm 1595919635

Announcing the move today, Peters said that China's passage of its new national security legislation had eroded rule-of-law principles, undermined the "one country, two systems" framework that underpins Hong Kong's unique status, and gone against commitments China made to the international community."

Really? - Madeleine Albright: “500,000 Dead Iraqi Children Was Worth It”

by Fritz | 28th Jul 20, 7:53pm 1595922785

You do realise that the NZ government condemned the 2003 invasion of Iraq, right?
The issue is not whether it's China, or the USA, or Timbuktu, the issue is whether the action is contrary to international law, human rights considerations or general expectations of international behaviour.

by Audaxes | 28th Jul 20, 8:14pm 1595924044

As far as I know the Five Eyes nations are constantly berating others for breaking rules/laws they continuously abuse, by omission or direct action.

There was a time when abusers of power were afraid of the media.

Today they commit crimes in plain sight and with impunity because they control the media.

The persecution of Assange feels like time travel to the dark ages where truth-tellers were burned in public. Link

by Fritz | 28th Jul 20, 8:20pm 1595924426

I am not saying all the Five Eyes nations are saints.
But can you point to rules/laws the Five Eyes abuse?

by lowercase capitalist | 28th Jul 20, 8:55pm 1595926545

I doubt the five eyes break any laws/rules given that the five eyes are the same people who make the rules.

However, the work around where a country isn't allowed to spy on their own citizens so they have another member of the five spy for them while they spy on that country and then swap notes seems like a pretty clear example of breaking the spirit (while no doubt being technically within the letter) of the law.

by Kate | 28th Jul 20, 8:21pm 1595924499

Yes, and wasn't it Bush Jr. who said "if you're not with us, you're against us".

My thought at the time - up yours.

by powerdownkiwi | 28th Jul 20, 9:54pm 1595930045

Weapons of mass destruction.

What a coincidence you live atop of our oil.

Weapons of mass destruction

The biggest of which was the MSM.

by Averageman | 28th Jul 20, 6:48pm 1595918906

If I was a FHB I would be voting TOP. Reduced income tax (yay) the expense of increased land and asset tax. This will put the wood on the land speculators to actually generate a return, and actually pay tax, and remove the tax free shine of house investment and prices (double yay). No brainer really.

by Kezza R | 28th Jul 20, 7:58pm 1595923114

The memory of Gareth Morgan is still top fresh.

by Masher | 28th Jul 20, 8:17pm 1595924258

All I got out of that campaign is he wanted you to know hes a rich prick.

by GV 27 | 29th Jul 20, 6:34am 1595961272

It would also force owner occupiers to generate a return. Whether they can or not, they'd still have to pay. Likewise on their car, boat, bike, etc despite not being able claim depreciation or running costs on those things. Hard 'no' from me, I'm afraid.

by iconoclast | 28th Jul 20, 7:01pm 1595919684

Political polls - National claims the Newshub-Reid poll is rogue
They will dine out on that until the next poll comes out
If the next poll confirms the Newshub-Reid results their credibility will crumble further
The danger for them is they will look idiots

by powerdownkiwi | 28th Jul 20, 9:55pm 1595930111

Too late ;)

by iconoclast | 28th Jul 20, 7:19pm 1595920794

In the face of increasing clamour to charge returnees a fee for isolation and quarantine, Megan Woods has done a daily stand-up claiming it is terribly complex, needs to be worked through, it's terribly complex, and in case you didn't understand that, it's awfully complex. Even Robartson has had a go on the complexity saying need to get it right and do it once. Yesterday Ardern in an interview with Hosking re-iterated that it's terribly complex, but nearing a resolution

Today, radio news, Ardern announces that it won't be done anytime this year
Labour and NZFirst were in favour but the Greens sabotaged it saying it's not fair
James Shaw said they can't support it because it's unfair on poor expats who've lost their overseas jobs
Shaw failed to mention that accommodating the turn-coats is unfair on those who stayed home. $400 million unfair

National is in favour
Why doesn't Labour and National do a non-partisan deal and just do it
Australia has been doing it for 4 weeks already
It wasn't complicated

by Lapun | 28th Jul 20, 8:23pm 1595924605

Some returnees are seriously poor. So just charge it as per student loan.

by Fritz | 28th Jul 20, 8:25pm 1595924742

Disagree. You make it sound as if it's too bad if you didn't stay home - ie. it's the expats' fault.
It's not. They have been stranded by an exceptional event that they couldn't have reasonably expected.

by iconoclast | 29th Jul 20, 9:12am 1595970775

Terrible misfortunes befall people while overseas all the time
Wouldn't have happened if they had stayed home
Try this case - woman falls ill in Bali Indonesia in 2018
"The Government can't help fund the trip home for a Kiwi mum in a coma in Bali, Deputy Prime Minister Winston Peters has told her family"
https://www.stuff.co.nz/national/106634658/govt-cant-help-sick-kiwi-mum…

by JimboJones | 28th Jul 20, 8:33pm 1595925193

Does Megan Woods ever actually do anything? Everyone gave Twyford crap for kiwibuild but what has Megan done for housing?

by Fritz | 28th Jul 20, 8:35pm 1595925352

Can't stand her. Obfuscatory, defensive, condescending.

by Henry_Tull | 28th Jul 20, 9:53pm 1595929984

It would have been better had she not claimed Walker was dog whistling... (plus the PM piles on) terrible stuff ...

History shows Woods herself vindicated and validated Walkers concerns of quarantining Queenstown (there are no medic support facilities for +ve there).
Woods now agrees, now says no quarantine in Queenstown...
- Walker was right.....

Woods adds nothing to the response.

Here is what a proper Health Minister looks like. Not this part time job sharing rubbish NZ got going...

https://youtu.be/ZTk-k-UNosI
Greg Hunt.
Having to fix up the terrible response structure of Victoria ( the whole structure is politicized).
Big contrast to NSW, Qld, WA & SA.

by The Person | 28th Jul 20, 11:23pm 1595935417

Walker has not been vindicated, he didn't give two figs about lack of medical facilities. No complaints about you quarantining in the lower south if you are coming in from America or South Africa. According to Walker only NZ citizens coming from Pakistan India Korea were a risk to the country.

by Henry_Tull | 29th Jul 20, 6:41am 1595961684

The examples were hotspots where kiwis had got on planes from and were then in NZ and +ve.
This was info Woods herself had access to, yet goes the whistle. Subsequently the paper had the detail to question her, confront her & it selected to use the detail for other purposes (nothing stopping the paper also asking Woods the question)..

Walker said no to Queenstown quarantine, there is now no Queenstown quaratine.

by Albert2020 | 28th Jul 20, 7:59pm 1595923141

And so it begins...when the MSM starts talking about PMs the masses start to take notice

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…

by Ezy | 29th Jul 20, 7:19am 1595963963

"Gold looks like the new Bitcoin". Nice sentiment, but just try storing $100m worth of gold on a usb stick. The Jews stored gold in their teeth during their crisis that was WW2.

by Henry_Tull | 28th Jul 20, 9:16pm 1595927792

Winston, on Sky News, looking a bit under the weather.

https://youtu.be/HF9ueo0oVSo

Talking about USA/Australia and 1985:
1. Regretting being bad mannered toward USA.
2. Described it as being Cheap & nasty
3. Regretting that part of NZ history.

Says the polls are poor.
Says he is seeing the turn around and a narrowing.
Congratulation himself for being the hand brake on the COL.

by Henry_Tull | 28th Jul 20, 9:44pm 1595929461

This looks a problem

https://i.stuff.co.nz/national/health/coronavirus/122276040/covid19-tra…

It is likely a traveller who tested positive for Covid-19 in South Korea had less than 21 hours to catch the virus, if they weren’t infected in New Zealand.

The 21 hour window to catch and be in viral state to test positive, looks unlikely.

The incubation period for COVID-19, which is the time between exposure to the virus (becoming infected) and symptom onset, is on average 5-6 days, however can be up to 14 days.

https://www.weforum.org/agenda/2020/07/temperature-cough-breathing-isol…
This is backed up by data that suggests some people can test positive for the virus 1-3 days before they develop symptoms.

Question, how do you contact trace when the No1. is now in Korea?

Sounds like a negative test before travel from NZ is the go.

by Ecuttel | 28th Jul 20, 10:20pm 1595931646

Emirates require a negative test within 96hrs of your flight. This includes flights from NZL. They also offering to pay for quarantine expenses if catch covid whilst travelling https://www.google.com/amp/s/www.newshub.co.nz/home/travel/2020/07/emir…