Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
TSB have announced fixed rate cuts across all terms and taking their one year 'special' down to 2.49%. Their fixed two year rate of 2.65% is especially competitive with the main banks for that term.
TERM DEPOSIT RATE CHANGES
TSB have cut all their term deposit rates bu between -10 and -20 bps. Christian Savings have also trimmed both savings and TD rates.
JULY EXPANSION
The BNZ-BusinessNZ service sector activity index (PSI) was unchanged on a seasonally adjusted basis but expanded more strongly on an unadjusted basis in July. New order levels are still expanding well but employment is still contracting, indicating employers were cautious. And that caution was well-placed of course based on what has happened in August subsequently. In this PSI the South Island was far more expansionary than Wellington or Auckland and they have have taken a harder hit since.
DELAY
The September 19 General Election has been delayed until October 17.
RISING DOMINANCE
According to NZ Post, 11% of all online shopping revenue was conducted through BuyNowPayLater (BNPL) channels in 2019-20. Total spend through BNPL channels more than doubled in 2019, and is expected to surge even faster in 2020. The number of customers using BNPL rose by almost +50% in 2019, with particularly strong growth among younger consumers. The adoption of BNPL has created significant headwinds for credit card providers. Over 1,200 Kiwi businesses have signed up to offer Afterpay alone, with far more businesses taking up similar offerings from PartPay, Laybuy, Oxipay and GenoaPay. About 20% of all trade in the Clothing Retailing and Footwear Retailing sectors was conducted through BNPL in 2019. This all according to Australian analysts at IBISWorld and uses the large NZ Post research.
DEATH RATE STAYS VERY LOW
New Zealand has had very few COVID-19 deaths. At the same time, the emphasis on pandemic controls has lowered the general death rate. StatsNZ tracks this metric and has updated its June 2020 which shows a drop to 6.8 people per 1000 population. It is a rate that steadily declined to 6.5 at the end of 2020 and has inched up since then. On the other side of the hedge, the birth rate is continuing to fall, now down to a record low 10.75 per 1000 population. When will that bottom out? It was 14.8 ten years ago and 17.7 a generation (30 years) ago. The gap between the birth rate and the death rate has never been narrower and has just tipped under +5 per 1000 population.
TEAM PROFILE
The population at June was 5,025,000 and up +105,500 in the past year. The median age pushed up marginally to 37½ years, and taking it back up to where it was five years ago. There are 75,300 more females in the country than males, (equivalent to Rotorua district being all female while the rest of the country is an even 50:50). (Also, did you know that the twin Hawkes Bay cities of Napier-Hastings has a larger population than Dunedin?)
UPTICK
The latest RBNZ data shows that while mortgage deferrals fell again (these requests were now back at very low levels), the number and value of consumer loan missed payments rose in the week to August 7, reversing a recent trend. And business missed payment rose sharply in the week, although the dollar amount of these didn't move much, suggesting it is an SME or micro business problem.
SURVIVAL OF THE WEAKEST
The Government has announced its new wage subsidy extension criteria. Businesses need to have suffered a -40% revenue drop to qualify for new wage subsidy. That's a really tough standard because many businesses with a lesser drop will become un-viable and only the weakest will get survival help. They have also simplified the rules around their Leave Support scheme.
NEW MORTGAGE DEFERRAL OPTIONS
Banks are offering new options for customers affected by this second lockdown that will enable either a new mortgage deferral or extension to an existing deferral.
EQUITY UPDATES
The NZX50 Capital Index has started the week on a strong note, up +1.3% so far today in late trade. Penny stocks dominate the gains today, but gainers outweigh decliners 2:1 with retirement villages back in favour (Somersett, Ryman, Oceania) along with Kathmandu and Kiwi Property Group. The ASX200 is down -0.7% however in early afternoon trade. Shanghai has just opened and is up +1.3%, Hong Kong is up +1.2%, but Tokyo is down -0.7% in their opening trade. The S&P500 futures market is pointing to a small -0.2% decline when Wall Street opens tomorrow
SWAP RATES UPDATE
We don't have today's change in swap rates yet and will update it here if changes are significant.The 90-day bank bill rate is down -1 bps to 0.28%. The Aussie Govt 10yr is unchanged at 0.93%. The China Govt 10yr is down -4 at 2.94%. And the NZ Govt 10yr yield fell another -1 bp to 0.67%. The UST 10yr is holding at 0.71%.
NZ DOLLAR HOLDS
The Kiwi dollar is holding marginally firmer that this time on Friday at 65.4 USc. Against the Aussie we are at 91 AUc and up off its earlier low. Against the euro we are a tad lower at 55.2 euro cents. And that means the TWI-5 is softer at just over 68.5.
BITCOIN HOLDS
The price of bitcoin is unchanged from this morning at US$11,856. 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 ».
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.