Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes today.
TERM DEPOSIT RATE CHANGES
Westpac is the latest to cut term deposit rates, from low to even lower, and taking their cues from ASB. Rabobank trimmed their too, as did First Credit Union. Update: And now BNZ has cut as well.
THE MAGIC OF LOW INTEREST RATES I
If they can scrape together a deposit, mortgage payments should be affordable for first home buyers on average incomes in all regions including Auckland, according to the July update of our home loan affordability reports.
THE MAGIC OF LOW INTEREST RATES II
And the REINZ is saying that more Auckland homes were sold in the first seven months of this year than the same period of last year, despite Level 4 lockdown
MORE VIGILANT?
The latest data report from CERT NZ suggests that New Zealanders may be becoming more vigilant online following a significant increase in reports of cyber security incidents during the first half of 2020. CERT NZ received a total of 3,102 incident reports between 1 January and 30 June, which is a +42% increase on the same period last year. In April alone 820 incident reports were received, the greatest number of reports CERT NZ has received in any one month since it was established in 2017. While the total financial loss for the six-month period was $7.8 mln, the loss was significantly lower in Q2-2020 at $1.8 mln compared to $6 mln in Q1.
LOOKING AHEAD
Fitch is saying that the relaxation of lockdowns and movement restrictions, travel recommencing, non-essential retail and hospitality reopening and the launch of government stimulus packages are all being taken into account in their forecasts for the New Zealand consumer spending outlook in the short- and medium-term (2020-2024). The spread of COVID-19 globally will have a negative impact on New Zealand’s consumer spending in 2020, with real household spending forecast to contract by -2.0% year-on-year. In 2021 they project a recovery to more than +4% growth over the year.
FMA APPOINTS DIRECTOR OF INVESTMENT MANAGEMENT
The Financial Markets Authority (FMA) has rehired Paul Gregory to fill the newly created role of Director of Investment Management. Gregory rejoins the FMA in November from PIE Funds where he's Chief Operating Officer. Having previously worked in journalism and corporate PR, Gregory was the FMA’s Director of External Communications and Investor Capability from 2015-2017, and manager of Portfolio Intelligence at the NZ Super Fund. As Director of Investment Management, Gregory will lead the FMA’s strategic focus on and regulation of the retail investment management sector, including KiwiSaver.
NEW SHAREHOLDER FOR VIVIER
Vivier and Company, a controversial NZ-registered financial services provider, has a new shareholder. Companies Office records show the Austrian-based Martin Haschka replaced Dunedin resident Allan Court as sole shareholder on August 26. Both remain directors. Vivier's registered office and address for service is the Chisholm Links golf course where Court is golf pro. When contacted by interest.co.nz last month, Court first said he wasn't Vivier's beneficial owner and subsequently said he was. See more on Vivier here.
THE PROBLEM IS US, NOT THEM
Statistics NZ released updated data focused on the contribution of household activity to New Zealand's carbon emissions. The focus on households and their choices is wise because this is the only sector increasing its GHG emissions on a total, and per capita, basis. "Industries" are reducing theirs and have been for a long time now. Households however, while happy to blame others (and have formed political parties to do just that), but are the real culprits according to the data. This latest data on "industries" is that they are reducing GHG emissions at the rate of -2.6%, while the latest data for households are increases at the rate of +9.1%.
RENEWABLES RISK RISING
Our hydro lake storage problem is becoming acute, with national storage unusually low for this time of year. 'Renewable' is a worthy goal, until it doesn't deliver.
LESS COMMITTED
In Australia, commitments to new capital expenditure, the necessary component o future expansion, fell in the June quarter by more than -11% and for plant and machinery, the components of improving productivity, the fall was -14% compared with the same quarter in 2019.
EQUITY UPDATES
In Australia, the ASX200 is up +0.5% in early afternoon trade and making back about half of yesterday's fall. The NZX50 Capital Index is up +0.2% in late trade. Earlier, Wall Street closed higher, up +1.0% in a steady all-day gain. At the opening, Shanghai is up +0.3%, Hong Kong is down -0.8%% and Tokyo is down -0.3%.
SWAP RATES UPDATE
Swap rates at the long end turned up sharply yesterday following international trends with the 10 year up +8 bps to 0.58%. Short end rates were little-changed. 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 still unchanged at 0.28%. The Aussie Govt 10yr is down -2 bps at 0.92%. The China Govt 10yr is up +3 bps at 3.07%. An the NZ Govt 10yr yield is also back up by +3 bps to 0.58%. The UST 10yr is down -2 bps at 0.68%.
NZ DOLLAR FIRM
The Kiwi dollar is marginally softer than at this time yesterday at 65.3 USc. But against the Aussie we are more than +½c higher at 91.6 AUc. Against the euro we are up +½c as well at 56 euro cents. That means the TWI-5 is up to 69.2.
BITCOIN HOLDS
The price of bitcoin is little-changed today at US$11,388. 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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