Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes today.
TERM DEPOSIT RATE CHANGES
No changes here either.
FEWER AUCTIONS
Barfoot & Thompson auctioned 111 residential properties online in the second week of lockdown, down from 136 the previous week.
MORE PORRIDGE
An Auckland accountant has been sent to prison for two years and nine months for tax fraud dating back to the turn of the century. Alice Jardinero Monzon, 67, was sentenced in the Manukau District Court yesterday and as well as prison time, was ordered to pay $10,000 in reparation. Monzon is the second accountant this month to be sent to prison for tax fraud.
ANOTHER BIG, EXTRA BOND ISSUE. HEAVY DEMAND
The Treasury has today announced that $4 bln of nominal 15 April 2027 New Zealand Government Bonds have been issued via syndicated tap. The bonds, which carry a coupon of 4.50%, were issued at a spread of 18 basis points over the 15 April 2025 nominal bond, at a yield to maturity of 0.325%. Total bids exceeded $17.5 bn, indicating it was wildly popular. More than $13 bln is still out there waiting for an offer.
GMT WANTS SOME OF THAT ...
Goodman Property Trust is looking for up to $150 mln in a new September 2030 bond issue. They are expected to be rated BBB+. Results are due tomorrow.
... AND SO DOES TRANSPOWER
Transpower says strong investor interest has encouraged it to increase the level of oversubscriptions for its $125 mln bond offer from +$75 mln to +$175 mln, taking the total it sought to $300 mln. Their's is an offer for "unsecured, unsubordinated fixed rate bonds". This offer closed full of oversubscriptions. It will probably be rated AA-. These Transpower bonds mature September 2025.
DRINKING LESS BEER AND SPIRITS, MORE WINE
In lockdown, we drank less alcohol, much less. In the June 2020 quarter we drank -3.4% less than the same quarter a year ago, and the least in five years. For spirits, it was a whopping -22% less on that basis, for beer just -1.6% less. But we did drink more wine in lockdown, +6.8% more in fact. All alcohol consumption is decreasing again after four years of modest growth driven mainly by a growth in spirits drinking (RTDs?). The lockdown has seen an end to the decline in wine drinking, with it making an unusual - even if small - gain on an annual basis. This data comes from a Stats NZ release.
EQUITY UPDATES
Wall Street put in a late surge today, closing up a full +1.0% on virus vaccine rumours. Shanghai has opened marginally higher at +0.2%, Hong Kong is down -0.2%, but Tokyo has been following last night's European closes, up +1.7%. The ASX is up +0.5% in early afternoon trade, while the NZX50 Capital Index is also up 0.5%.
SWAP RATES UPDATE
Swap rates were basically unchanged yesterday except for the long end which fell again, with the 10 year down to a new record low of 0.49%. Today's swap rates aren't available yet. We will update this note if there is a significant movement. The 90-day bank bill rate is unchanged at 0.28%. The Aussie Govt 10yr is up +3 bps at 0.90%. The China Govt 10yr is also up +3 bps at 3.04%. But the NZ Govt 10yr yield is down again, down a sharp -5 bps to 0.57%. (It's all-time low was 0.49% reached in mid-May.) The UST 10yr is up +3 bps at 0.66%.
NZ DOLLAR SOFTISH
The Kiwi dollar is marginally softer from this time yesterday at 65.3 USc. Against the Aussie we are unchanged at 91.1 AUc. Against the euro we are little-changed at 55.3 euro cents. That means the TWI-5 is down marginally at 68.4.
BITCOIN UNCHANGED
The price of bitcoin has hardly changed today and is still at US$11,688. 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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19 Comments
The Treasury has today announced that $4 bln of nominal 15 April 2027 New Zealand Government Bonds have been issued via syndicated tap. The bonds, which carry a coupon of 4.50%, were issued at a spread of 18 basis points over the 15 April 2025 nominal bond, at a yield to maturity of 0.325%. Total bids exceeded $17.5 bn, indicating it was wildly popular. More than $13 bln is still out there waiting for an offer.
Are banks desperate to acquire liquid pristine assets that guarantee the return of their money if not a return on it and thus likely to resist the acquisition of risky local business loans?
We’re a hair trigger away from negative nominal government debt yields, not runaway inflation.
If this is housing boom, wait for sometime and see another house price rise of 20% to 30% as predicted by experts below :
https://www.newsroom.co.nz/pro/ready-for-a-15-mortgage-rate?amp=1
Casino economics sponsored by a government institution? I guess the near record NZX50 high confirms as much.
The Reserve Bank has confirmed it is preparing to lend freshly minted money to banks from early in 2021 at negative interest rates to encourage them to lend more to stimulate the economy and boost inflation back up to around 2.0 percent.
The banks would be expected to lend more to home buyers and businesses at rates as low as 1.5 percent, down from over 2.5 percent currently. That could in turn boost house prices by another 20 to 30 percent if other factors such as home building rates, migration and unemployment were unchanged, Reserve Bank research shows.
Previously, I had this to say about Bernard Hickey in respect of an article on this website.
by Stephen Hulme | 13th Sep 12, 4:01pm
Bernard you act as though you have been negligently captured by Bollard just as he is by banks and polticians.Your risible attempt to deflect the contempt in which the Governor should be held inflicts irreparable damage not only upon yourself but also on the principle of an independent "fourth estate".
"Influential media players ennoble themselves by hijacking the concepts of 'freedom', 'independence' and 'public interest' for their economic benefit, while abusing those very same words to justify entrenched professional habits that uphold, or refrain from challenging, illegitimate centralised authority'.
A Newsroom investigation reveals a Ministry of Social Development initiative to provide emergency housing made the housing crisis worse and enriched a small set of landlords and real estate agents
A former Harcourts property manager in South Auckland has blown the whistle on an emergency housing scheme where a group of landlords were paid up to $3000 a week by the taxpayer for "marginal to uninhabitable" private rentals.
When the landlords ran out of houses they turned to real estate agents who procured vacant properties - allegedly without the consent of the people who actually owned them.
https://www.newsroom.co.nz/landlords-paid-3k-a-week-by-government
JC
I posted a month or so ago that here in HB, MSD were offering a landlord to manage their property, find tenants, guarantee rent, and repair all damage - all at no cost to the landlord. A commercial property manager would be charging to find tenants, offer no guarantee of rent, and charge to arrange repairs at a cost - as well as a management fee of 8 to 10% of rent.
MSD are desperate for rental accommodation as here in HB motels remain to be extensively used for emergency housing with stories of some being housed in motels for two years.
MSD are desperate and cost is becoming a secondary issue.
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