Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
There are no changes to report today.
TERM DEPOSIT RATE CHANGES
Asset Finance cut their two, three and four year TD rates.
WESTPAC PULLS OUT OF PACIFIC
The Westpac Group is selling its Pacific businesses, Westpac Fiji and Westpac’s 89.91% stake in Westpac Bank PNG to Kina Securities for up to AU$420 mln. The sale follows the Group’s strategic decision to focus on consumer, business and institutional banking in Australia and NZ. Westpac Group last week announced the sale of Westpac General Insurance and Westpac General Insurance Services for A$725 million to Allianz and entered an exclusive 20-year agreement for the distribution of general insurance products to Westpac’s customers.
POWER MOVES
Infrastructure and utilities investor Infratil (IFT) says its conducting a 'strategic review' - corporate speak for looking to sell - its 65% stake in Tilt Renewables, developer and operator of wind farms here and in Australia. The 'review' may take six months. Tilt told the NZX in a statement the review "may result in an offer from a third party for all outstanding shares in TLT and therefore the directors of TLT will begin preparations to be able to respond to such an offer". Would state-controlled generator Mercury (MCY) be interested? It owns 20% of Tilt. It told the NZX in its own statement that "there is currently no arrangement between Infratil and Mercury in relation to Infratil’s strategic review". "Mercury is very satisfied with the performance to-date of its investment in Tilt and has not reached a position on the future of that investment. The directors of Mercury will monitor developments closely."
MORE CORPORATE BOND APPETITE
Ryman Healthcare (RYM) is looking for up to $150 mln in a new six year bond issue. It will have a minimum interest rate of 2.50%. There will be no public pool for this offer, it all being distributed through institutional channels.
TOUGH NEGOTIATIONS
Ground rents for some key downtown Auckland waterfront property are up for negotiation again and the going is tough to get agreement. This land went 15 years until 2011 with zero increases, and since then they come up every three years. It never seems to get 'easier'. Land owner Ngati Whatua Orakei Whai Rawa Ltd are represented by Chapman Tripp as their legal counsel, and have Michael Stiassny as a director. The interests of the land owner and the property lessees are unlikely to ever align easily.
DIALING BACK
Although their daily online data updates won't change, the Ministry of Health is reducing the frequency of media updates to four times a week - currently scheduled to be on a Monday, Wednesday, Friday and Sunday.
AUCTION FRENZY, BUT PRICES STAY CONSTRAINED
Even though the number of Australian housing auctions were -30% less last week than in the same week a year ago, the overall clearance rate rose to 75% with Sydney recording an 80% clearance rate. In fact auction clearance rates in Australia are now at their highest in four years. But selling values are only rising at about +3% pa there.
NO-SURCHARGE OK FOR NOW
In Australia, the RBA seems to have concluded that the BuyNow, PayLater schemes of enforcing a no-surcharge rule on their merchants works to "promote innovation", and that these benefits outweigh the harm the sector does to some users. But they do note that at some point, no-surcharge rules will need to be unwound.
GOLD PRICE RECOVERS
The price of gold fell -US$6 in early Asian trade today from the closing Saturday New York price. and then it rose back to be at US$1838/oz.
EQUITIES UPDATE
The NZX50 has opened this week's trading unchanged from Friday in late trade. The ASX200 is up +0.7% in early afternoon trade with strong rises by the iron ore miners. The very large Tokyo market has also started the week flat. Shanghai has opened down -0.3% and Hong Kong is down -0.9% in opening trade.
SWAP & BOND RATES HOLD HIGHER
We don't have todays swap rate movements yet. If there are material changes today when the end-of-day swap rates are available, we will update them here. The 90 day bank bill rate is unchanged today at 0.25%. There is a bond selloff going on at the moment with consequent rises in benchmark rates. The Australian Govt ten year benchmark rate is still up at 1.06%. The China Govt ten year bond is unchanged at 3.32%. But the New Zealand Govt ten year is back up +6 bps at 0.97% and above the earlier RBNZ-recorded fix of 0.94% (+3 bps). And the US Govt ten year is holding today at 0.97% to where it rose on Friday NYT - by +6 bps.
NZD EDGES LOWER
Against the US Dollar, the Kiwi dollar is now at 70.4 USc after being higher earlier. On the cross rates it is down against the Aussie to 94.7 AUc and against the euro we are also softer at 58.1 euro cents. That all means our TWI-5 has moved down slightly from this time on Friday to 72.5.
BITCOIN HOLDS
Bitcoin is now at US$19,336 and virtually unchanged from the price we reported this time on Friday. The bitcoin rate is charted in the exchange rate 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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17 Comments
Today Stuff ran a huge focus on house price issues, an-all day live feature with "Economists, architects, researchers".
Isn't it interesting the things that happen after an election instead of before it? Or is would that have been speaking the truth a little too directly to power?
GV
Reminds of the story regarding Joe Kennedy and the shoe shine boy giving him tips on stocks in the late twenties - time to get out.
Same story just prior to 1987 share market crash. Every man and his dog was in a share club and it dominated morning tea and lunch time in the canteen.
Now the housing market is raging and everybody is continuously talking about it. It seems ominous to me.
Like the varsity party, by the time everybody was talking about it, the peak had past.
This party is not going to go on for ever; I’m still expecting a prolong flattish period from about March next year.
The rise in prices is currently unsustainable as affordability issues get further beyond FHB and yields fall even further for new property investment . . . and I think RBNZ will have an effect as they have recently but the market will become more dominant again.
(Note to IO: I see change ahead and that is good reason to reassess one’s outlook. It’s not flip flopping - but rather not being besotted with an long held entrenched view)
The 'I told you so' won't come from me....as I say, I think its a possible outcome and not saying its a certainty so it would be pretty arrogant to say I knew something was going to happen (who'd have though reserve banks would pump this much stimulus into markets this year...its extraordinary).
A 50% fall would only be back to 2008 prices now wouldn't it (which in many countries was the peak of their bubble during the last business cycle - and in another possible theory ours as well that didn't deflate...). Who knows what could happen if people in the anglosphere (but especially NZ, AUS, CAN) suddenly decided property prices are over valued and everyone collectively rushes to sell to hold onto the massive amount of equity earned over the last few decades...it would be a blood bath (watching that unfold in parts of the US leaves permanent scars). If it is a property bubble, it must be one of the biggest that the world has seen. Its terrifying to look at on any chart - it looks like the elevation profile of Mt Everest.
Yes I guess the question then becomes, 'what will be the long term consequences of destroying a countries fiat currency to protect asset 'prices'?'. Can all currencies destroy theirs as the same rate as the USD (i.e. the reserve currency). If not, then what happens. NZD is very strong recently...do we need to print even more $$ to devalue it even further to keep our export market competitive - where will that money go - into even higher house prices? How high can house prices go before they are completely decoupled from 'reality' so that we can stay in the race with the US and continue to destroy our currency at the same pace.
Labour up in the polls!
Runaway house prices the Key to political success!!
https://www.nzherald.co.nz/nz/new-poll-labour-jacinda-ardern-up-nationa…
Would love to see a graph tracking house price movements against governing party popularity,, I reckon there would be a strong correlation.
Perhaps the MoH could announce each day the number of deaths from cardiovascular disease?
One death every 90 minutes in NZ.
https://www.heartfoundation.org.nz/statistics
northport taking its first container ship
its only a matter of time before they take more ships, the government needs to speed up the 4 lane motorway to whangarei and the rail link.
if they do that then we will have three ports competing for the work
https://www.tvnz.co.nz/one-news/new-zealand/whang-reis-little-port-coul…
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