Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
None to report today.
TERM DEPOSIT RATE CHANGES
ASB has cut its TD rates hard, setting new low benchmarks and many key ones now below BNZ. The Firefighters Credit Union also trimmed their rates.
DEMAND SURGE
The housing market just went 'boom' with record house prices in Auckland and in seven other regions. Prices were supported by strong sales volumes in August. Auckland median prices have hit $950,000, and sales volumes were unusually strong for an August, up +25% nationally from August 2019.
HITTING AFFORDABILITY LIMITS
Median rents however fell in August. For a 3 bedroom house in Auckland, they are down to $675/week from $692/week in July. In Wellington they are up to $660/week from $655/week in July. In Christchurch they are down to $430/week from $440/week in July.
AUCKLAND KNEECAPS NZ MANUFACTURING
Factory activity essentially stopped expanding in August after a good expansion in July. Obviously Auckland contracted in L3, but surprisingly so did Otago. Elsewhere factory activity expansions were quite healthy.
BITING HARD
Food prices are inflating strongly now, up +4.2% in the year to August and that is the same as it was in July. On a year-on-year basis fruit and vegetable prices increased +19%, meat, poultry, and fish prices increased +0.3%, grocery food prices increased +1.6%. and restaurant meals and ready-to-eat food prices increased +3.8%. Eating healthy is suddenly much more expensive.
GUILTY OF ALL CHARGES
Pegasus Markets and its New Zealand-based director, Michael Reps, have been found guilty of all criminal charges brought by the Financial Markets Authority for breaches to the Financial Service Providers (Registration and Dispute Resolution) Act (FSP Act).
"NOT GUILTY" PLEAS
Two men who worked for the Christchurch Earthquake Recovery Authority (CERA) and Ōtākaro Ltd have pleaded not guilty to corruption charges brought by the Serious Fraud Office. Gerard Anthony Gallagher (62) and Simon Carl Nikoloff (57) had sought name suppression, but the Christchurch High Court declined those applications.
'NEWLY RESTRICTED'
BNZ reports: "With New Zealand’s COVID-19 restriction levels re-tightened on 12 August, it was no great surprise to see the recent recovery in job advertising take a knock in the month. It slipped a seasonally adjusted 3.1% – the first backward step since April. This caused advertising to slip a bit on an annual basis also – to -32.5%, from -31.5% in July."
MAXIMUM DEMAND AT MINIMUM PRICE
Retirement village operator Summerset got its full $150 mln for its seven year bond issue and at a final interest rates of 2.30% being 2.00% above the seven year swap rate.
TOUGH LOCKDOWN
In Indonesia, their capital Jakarta will be locked down with 11 mln people restricted to their homes for at least two weeks, as the pandemic bites fiercely there. Hospitals are swamped. Seabourne escapes to Australia will worry Canberra.
GOLD PRICE DIPS
In Asian markets, the gold price has fallen -US$8/oz since the New York close which lost almost -US$20 from the London close. The current Asian price is at US$1939/oz. That is a -1.4% fall in a day. Silver has fallen -1.8% today.
EQUITIES UPDATE
On Wall Street, the S&P500 ended the day up down -1.8% after sliding all day after the weak jobless claims report. Shanghai has opened flat, Hong Kong is up +0.5% in early trade and Tokyo is up +0.3% building on yesterday's unusual rise. The ASX200 is down -0.7% in early afternoon trade and heading for a weekly fall of -0.8%. The NZX50 Capital Index is down -0.5% in late trade and heading for a weekly loss of -0.7%. The S&P500 futures trade suggests Wall Street will open tomorrow up +0.6%.
SWAP RATES STAY VERY LOW
Yesterday, local swap rates rose marginally across the curve, from next-to-nothing to just stuff-all. The two year and three year swaps were 0.03% (or $2.50 in interest per year for every $10,000). We don’t have the final data for today yet and if it is significant we will update it here. The 90 day bank bill rate is unchanged at 0.30%. The Australian Govt ten year benchmark rate is 0.91% and down -3 bps. The China Govt ten year bond is at 3.11%, up +1 bp. The New Zealand Govt ten year is now at 0.60% and also unchanged. The US Govt ten year is little changed at 0.68% but in-between it has been quite volatile.
NZD SOFT
The Kiwi dollar has held at 66.6 USc, unchanged since this morning but down slightly from this time yesterday and down -50 bps in a week. Against the Aussie we are at 91.6 AUc and marginally softer. Against the euro we are at 56.3 euro cents, also marginally softer. That means our TWI-5 is now at 69.6 and and -30 bps in a week.
BITCOIN FLAT
Bitcoin has hardly changed today, now at US$10,281.
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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