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A review of things you need to know before you go home on Monday; more TD cuts, services and migration at low ebb, more big fund raising, eyes on swaps, NZD firm, & more

A review of things you need to know before you go home on Monday; more TD cuts, services and migration at low ebb, more big fund raising, eyes on swaps, NZD firm, & more
14th Sep 20, 3:59pm by David Chaston
ID 22702269 © Daniaphoto | Dreamstime.com

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
Kiwibank and SBS Bank both trimmed term deposit rates today. Credit Union Auckland did so as well..

SERVICE SECTOR CONTRACTING
The service sector is contracting again. The decline was most evident for Activity/Sales (43.8) and New Orders/Business (47.1). Overall, Wellington and Canterbury had minor expansions. But it was Otago that was hurt the most, slammed very hard by the Auckland lockdown's impact on internal tourism.

FEW COMINGS OR GOINGS
Migration data was released today and is of little value other than recording the very low numbers involved now. Refer to Statistics NZ data if you need it.

MOTHBALLED BIG BIRDS
Air New Zealand is grounding its Boeing 777 fleet. Only three will be parked up in Auckland, allowing a faster return to service. But twelve are to be stored in desert parks in California and New Mexico.

AUCKLAND COUNCIL EYES 30-YEAR GREEN BOND
Auckland Council plans to provide details of a 30-year green bond on Tuesday. The offer will be of secured, unsubordinated, fixed rate green bonds to both retail and institutional investors. The bonds will be quoted on the NZX Debt Market, with ANZ, BNZ and Westpac lead managers. The size of the offer is yet to be specified.

MORE KAURI BOND ISSUANCE
The World Bank has today launched a new 7 year Kauri bond transaction. Books are now open on the minimum NZ$150 mln deal. The transaction is being marketed at +36 bps over mid-swaps. (Kauri bonds are NZD debt security issued in New Zealand by an offshore issuer.) This will add to the $23.6 bln of Kauri bonds currently on issue.

GOLD PRICE DIPS RISES
In Asian markets, the gold price has risen +US$9/oz and is now at US$1949 in Asian trading. Silver is up a little less proportionately. (H/T RP for typo.)

EQUITIES UPDATE
The NZX50 Capital Index has opened up a modes +0.2% today while the ASX200 is up +0.6% in early afternoon trade. Shanghai has opened up +0.7%, Hong Kong up +0.8% and Tokyo is up +0.7%, all in very early trade. The S&P500 futures trade suggests Wall Street will open a stronger +1.2% tomorrow.

SWAP RATES STAY VERY LOW
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 up +4 bps 0.95%. The China Govt ten year bond is up +8 bps at 3.19%, 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 0.67%.

NZD FIRM
The Kiwi dollar has started the week stronger and now at 66.9 USc as the USD softens. Against the Aussie we are also firmer at 91.9 AUc. Against the euro we are flat at 56.5 euro cents. That means our TWI-5 is now at 69.6 making back all of last week's dip in one day.

BITCOIN FLAT
Bitcoin has had a quiet opening today, now at US$10,351.

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

Source: RBNZ
Source: RBNZ
Source: RBNZ
Source: RBNZ
Source: RBNZ
Source: RBNZ
Source: RBNZ
Source: CoinDesk

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24 Comments

by  Andrewj  |  14th Sep 20, 4:03pm 1600056191

Wolf at his best, turning your nest egg into scrambled eggs.
https://wolfstreet.com/2020/09/13/the-wolf-street-report-great-time-to-…

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by  bw  |  14th Sep 20, 4:19pm 1600057166

A good listen. Of note:
"If Tesla dropped 90% from its peak, it would still be overvalued"
A sobering thought for many who have just discovered: "The trend is your friend" - until it isn't, of course.

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by  richard1965  |  14th Sep 20, 4:26pm 1600057614

How True.

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by  KBKIWI  |  14th Sep 20, 5:00pm 1600059618

"If Tesla dropped 90% from its peak, it would still be overvalued"

This is nonsense. that would mean a market cap of only $35 Billion dollars for a company with currently over $10 Billion cash and projected to earn over $10 Billion in operating profits in 2021 with continued 40%+ revenue growth.

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by  sit23  |  14th Sep 20, 5:20pm 1600060817

So Tesla are projecting to make $7300 profit on every car sold next year. Does anyone except CNN and CNBC believe their 1.3million cars, $10,000,000,000 profit for next year? Up from 500000 cars this year.

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by  Lanthanide  |  14th Sep 20, 7:26pm 1600068367

Newsflash: they don't only sell cars.

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by  Poppyc  |  14th Sep 20, 8:58pm 1600073929

What else do they sell? Solar panels? Nope solar city aren't selling anything. Their main profit driver is carbon credits which only lasts so long.

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by  Andrewj  |  14th Sep 20, 5:36pm 1600061806
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by  Tradersam  |  14th Sep 20, 7:06pm 1600067183

Tesla is nothing but a Meme ....

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by  Carlos67  |  14th Sep 20, 5:26pm 1600061209

Well currently Tesla is making no profit so yes its way overvalued according to how things have worked in the past but everything is now upside down and there is no logic anymore in many markets.

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by  Hook  |  14th Sep 20, 5:57pm 1600063061

The trend is never your friend - it's a "honey trap" That's why trend buyers (aka "technical analysts") tend to lose more than they gain.
They are attempting to forecast the movement of a herd (buyers) based on previous behaviour irregardless of the upcoming landscape (i.e. a cliff). The herd may stop in time or it may career off the cliff in a mad lemminglike stampede. No one drives a car looking in the mirror to see where they've been so why would people invest using the same theory??

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by  Andrewj  |  14th Sep 20, 6:18pm 1600064319

the human brain is wired to recognise patterns, things that it can relate to from past experience.

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by  sit23  |  14th Sep 20, 5:08pm 1600060109

Green Bonds?? Have they a list of non Green coumcil expenses they will not be using this money for? And can we take their word for their being green? Why was the interest rate not mentioned? Most important thing.

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by  Audaxes  |  14th Sep 20, 5:30pm 1600061446

Full details of the deal will be released on 15 September.

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by  Roger Witherspoon  |  14th Sep 20, 5:52pm 1600062722

30 year bonds from Auckland Council. Let me see, QV house price index in jun 1990 was 468, by jun 2020 it was 2826. By my calculation that is 11.75% inflation per year. So the yield is likely to be deeply negative, yet no doubt the bonds will sell to someone who can borrow the money for less than the yield.
https://www.interest.co.nz/charts/real-estate/qv-house-price-index

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by  skip-  |  14th Sep 20, 6:26pm 1600064789

Out of interest, why aren’t home loan rates going down? Were lower swap rates and TD’s already priced in?

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by  Henry_Tull  |  14th Sep 20, 7:45pm 1600069508

Rugby news:
The SANZAAR wash up.
Listen to 7:15 to 7:30 morning block, at approx. 8 minute mark.

https://www.newstalkzb.co.nz/on-demand/week-on-demand/

Now the Australians are looking to take the Bledsoe Cup matches too.
See the 18:45 19:00 approx 8 min mark.
Here is the Aussie reporter Tom Decent.
https://www.newstalkzb.co.nz/on-demand/week-on-demand/

NZ quarantine not up to the mark, easily beaten by NSW.

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by  Henry_Tull  |  14th Sep 20, 8:29pm 1600072152

Looks like a Tui billboard coming our way.

https://i.stuff.co.nz/sport/rugby/all-blacks/122759680/prime-minister-j…

"So I do believe that we'll be able to find a workable solution to make the Bledisloe Cup happen."

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by  Fritz  |  14th Sep 20, 8:27pm 1600072049

NZTA has become a real basket case. Guess which minister is in charge of that agency...

https://www.rnz.co.nz/news/national/426001/pumice-layer-delaying-140m-h…

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by  muzled  |  14th Sep 20, 9:00pm 1600074027

Are you really insinuating that NZTA has only become a basket case since Labour got into power Fritz?

C'mon, you're better than that.

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by  Fritz  |  14th Sep 20, 9:06pm 1600074391

Well, they seem to be getting worse. No?

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by  muzled  |  14th Sep 20, 9:39pm 1600076349

Yes, of that I think there is little doubt.

But they seem to have been a basket case of an agency for a long time, interested only in big shiny gold plated roading projects and little else, and without knowing anything of the internal workings of the place that points towards institutionalised mentalities that have worked in one place for a large chunk (if not all of) their working lives.

Which in turn must be a nightmare for your average minister. (and more so your below average minister...)

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by  Glitzy  |  14th Sep 20, 10:21pm 1600078914

At 1pm today the PM announced no social distancing on public transportation and domestic flights.

By 2.20pm I had an email from AirNZ telling me that from tonight social distancing on domestic routes would end and there would be a large offering of cheap flights.

So ... were they tipped off ahead of the rest of us or were they ready to press go on a cunning plan guessing the next govt move ?

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by  CourtJester  |  14th Sep 20, 11:08pm 1600081727

Not related to the economy, but VERY exciting news today:
https://archive.vn/L7MT1
Biological signature compound found in Venus' upper atmosphere

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