Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report again today.
TERM DEPOSIT RATE CHANGES
ANZ has cut its term deposit offers hard, reducing most rates by -10 or -15 bps but one as much as -20 bps. It is nearly down to the recent ASB levels. TSB also cut TD rates. And now BNZ has as well, taking them to market-low levels.
CONSTRUCTION SECTOR HURTING
The June quarter data for building work completed was released today and it was at levels last seem more than four years ago and down -22% from a year ago. The construction industry is taking a heavy hit. Residential construction was down -23% by value, but some types on non-residential building were hit much harder. These values fell most sharply in Canterbury and Auckland, down -38% and -31% respectively. Retail, farm, and office building were the hardest hit building types, with the value of construction down -41%, -35%, and -31% respectively. And given the fractured restart in Q3, it might take some time to bounce back fully.
TOUGH CHOICES AHEAD
After lockdown to L4, Auckland bus patronage (which was already slipping prior to the pandemic) slowly recovered to less than 80% of its year ago levels. Now with the second lockdown it has been hit nearly as hard again. Given the public transport exposure risks and direct warnings, you do wonder how well it will recover in this current lockdown release. Commuter train patronage shows the same existential risks, only slightly worse.
FULL, PLUS OVERSUBSCRIPTIONS
Mercury Energy's $200 mln seven year 'green bond' closed fully subscribed. The interest rate has been set at 1.56% per annum. This reflects a margin of 1.25% per annum over the underlying seven year swap rate. They are rated BBB+.
PRACTICAL HELP
The Government is making short-term changes to visa settings to help visitors and other temporary migrants remain in New Zealand lawfully while they arrange travel home.
FEEL WEALTHIER?
Believe it or not, New Zealand household net financial wealth rose in the June quarter, according the the RBNZ C21 and C22 data. And the rise isn't trivial either. For the year to June it is up +$23 bln which is a +2.6% gain. That is better than the +2.0% gain in 2018 to 2019 equivalent period. Household financial liabilities rose +4.7% in the year, but household financial assets like bank deposits rose +7.8%, and cash management accounts were up almost +10%. These turned out to be rises that more than offset the almost -10% fall in the value of market equities held. Even on a per capita basis it grew, but only a marginal +0.4%. Any rise these days seems an achievement, however.
BOUNCING AROUND
In Australia, retail sales in rose in July 2020 to be +12% above year-ago levels, with sales in household goods particularly strong, up almost +30% above the same month last year. Melbourne's August lockdown probably undermines the next few months.
EQUITY UPDATES
The S&P500 ended its session earlier today in a weak state, down -3.5%. Tomorrow the August non-farm payrolls report is due and markets are expecting that to result in -11.5 mln jobs lost from February to August. Then the US in on its long Labor Day weekend. Expect some defensive square-ups. It is a sea of red across all equity markets today as investors run for the hills. Shanghai has opened down -1.2%, Hong Kong is down -1.3%, and Tokyo is down -1.1% so far in early trade. The ASX200 is down -2.7% in early afternoon trade and heading for a weekly loss of -2.0%. And the NZX50 Capital Index is down -1.5% near its close and heading for a weekly loss of -1.8%.
SWAP RATES UPDATE
Swap rates details are not yet available yet. If there are notable changes again today, we will update this item. The 90-day bank bill rate is unchanged at 0.30%. The Aussie Govt 10yr is down -2 bps at 0.90%. The China Govt 10yr is up +2 bps at 3.14%. But the NZ Govt 10yr yield is unchanged at 062%. The UST 10yr has retreated from yesterday's close again, down -2 bps to 0.64%.
NZ DOLLAR DOWN
The Kiwi dollar is softer than this time yesterday, down more than -½c and now at 67 USc. That is no change from where we opened this morning. Against the Aussie we are also softer at 92.2 AUc. Against the euro we are down to 56.6 euro cents. That all means our TWI-5 has fallen -60 bps to 69.9.
SILVER FALLS
The price of gold slipped today, but the real news is that the price of silver fell -3.2%. And that has accumulated to almost an -8% fall so far this week.
BITCOIN HIT HARD
The price of bitcoin is down more than -US$1000 or -9.5% at US$10,300. 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
11 Comments
What's the difference between Mercury and other people? They pay 1.56% interest pa, and have fund managers queueing up to throw other people's money at them. Other people have banks refusing point blank to lend to them regardless of security etc, even though Mercury have shown us the world is awash with money. This obvious, hypocritical double standard will send mortgagee sales way up. The only consolation will be that these banks will lose their money on some of these depressed market unnecessary sales.
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.