Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Heartland Bank has chopped both its floating and one year fixed home loan rates hard. More here.
TERM DEPOSIT RATE CHANGES
Cooperative Bank raised their one year and 18 month rates to 1.10% for both terms.
NEW FEE CURBS COMING
The Government is to empower the Commerce Commission to regulate fees charged by banks and card companies that are paid by retailers and other small businesses.
SNAPPING BACK SHARPLY
Consistent with a sharply improving labour market, the latest BNZ-Seek employment report records a +12% year-on-year rise in job ads, a second consecutive month it has been growing this fast. The sharp improvement is led by fast-returning demand for the hospitality and tourism sectors.
WILDLY POPULAR
Yesterday we reported that the Local Government Funding Agency (LGFA) is launching a fixed rate bond offer and cancelling its 12 May 2021 tender. The book build is underway and it is proving to be wildly popular. The offer is for $300 mln in unsecured, unsubordinated, fixed rate bonds with a maturity date of 15 May 2031 and with the ability to accept unlimited oversubscriptions. As of this morning (9am) they had been offered more than $900 mln, so they revised the indicative interest rate margin lower. In excess of $570 mln is within the revised lower indicative Margin range. But that is sure to rise as the book build didn't close until 2pm today.
STRESS EASING
Finally, wholesale electricity prices are starting to ease, dropping below $200/KWhr. That is still high but over the past week it has been shifting lowqer by the day. In 2019 and 2020 the average price was $108/KWhr in each year. So far in 2021 the average price has been $230/KWhr. (Haywards benchmark.)
STELLAR RESULTS
In Australia, banking behemoth CBA reported a quarterly profit of AU$2.4 bln, double that for Q1-20 and +40% higher than Q1-19 (calendar quarters, not financial year quarters). That was on the back of it's lending to business growing at three times the average of the other banks and growing its home loan market share too. They are proving that banking is a volume business, especially when margins are falling. Their credit quality is improving. No customer has to bank with CBA; there are good alternatives. But they are winning customer support and their profits are rising. (ASB got barely a mention in these results, other than one positive comment.)
GOLD SOFT
The gold price is down to US$1828/oz a drop of -US$9 from this time yesterday. New York closed at US$1838, so it is falling sharply in early Asian trade.
EQUITIES LOWER WORLDWIDE
The S&P500 ended -0.9% lower on Wall Street earlier today as their trading succession stayed negative as reflation fears were front of mind today. In Tokyo, they have opened down another -0.6% after yesterday's large retreat. In Hong Kong their open is up a tiny +0.2% after yesterday's large fall. Shanghai has opened flat. Meanwhile in Australia, they have shed another -0.6% in their morning session. The NZX50 Capital Index is down -0.4% to complete the sell-off trend.
SWAPS & BONDS MIXED
We don't have today's closing swap rates yet. If there are significant movements today, we will note them here later when we get the data. They are probably little-changed. The 90 day bank bill rate is down -1 bp at 0.37% and that is now its highest in more than a year. The Australian Govt ten year benchmark rate is up +6 bps at 1.73%. The China Govt ten year bond is down a rare -3 bp at 3.14%. But the New Zealand Govt ten year is up +4 bps at 1.85% and still above the 1.81% in the earlier RBNZ fix (+3 bps). The US Govt ten year is up +4 bps at 1.63%.
NZ DOLLAR SOFT
The Kiwi dollar is slightly softer today at 72.4 USc. Against the Aussie we are still at 92.8 AUc. Against the euro we little-changed at 59.7 euro cents. That means the TWI-5 is now at 73.9.
BITCOIN FIRM & VOLATILE
The bitcoin price is now at US$57,120 and recovering +3.0% or about half of yesterday's drop. Volatility however has remained high at +/- 2.5%.
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17 Comments
https://i.stuff.co.nz/business/property/300305431/house-prices-the-litt…
Mr Orr throwing new idea (old) to start fresh discussion to avoid taking any action on their next announcement and tactic to play with time.
Wait N Watch
"You can certainly increase the capital holdings to penalise banks and discourage housing lending further.
Hmmmm....
Banks have migrated away from lending to productive business enterprises because the risk weights can be as high as 150%.
Thus around 60% of NZ bank lending is dedicated to residential property purchases for one third of already wealthy households because the RBNZ offers them an RWA capital reduction incentive, to do so.
Bank lending to housing rose from $50,788 million (48.36% of total lending) as of Jun 1998 to $305,039 million (60.75%) of total lending) as of March 2021.
Business lending fell 5.2% for the year ending March 2021 while agriculture lending fell 1.3% over the same period.
One thing I learnt since going back to NZ is that the Reserve Bank of New Zealand is much the same as the old Keeps that medievil castles had. When the enemy (Covid) was at the castle walls the Reserve bank immediately rounded up all the rich in society and protected them in their keep whilst allowing the poor and young to be slaughtered in the castle grounds. At least we now know what we are dealing with. The Reserve bank is finished for a generation. They are now to be mistrusted by us plebs because we know what they are capable of.
NZ's own Peter Thiel dominating headlines in the past 24 hours. Kiwis punching above their weight yet again.
1. Peter Thiel's data analytics company Palantir Technologies now accepts bitcoin as a form of payment from clients. (https://www.theblockcrypto.com/linked/104442/peter-thiel-palantir-bitco…)
2. Peter Thiel, Alan Howard join $10 billion funding round for Block.one's new crypto exchange subsidiary (https://www.theblockcrypto.com/linked/104474/peter-thiel-alan-howard-10…)
One Google search solves all the fuss in Parliament today.
Sovereignty is the supreme authority within a territory.[1][2] Sovereignty entails hierarchy within the state, as well as external autonomy for states.[3] In any state, sovereignty is assigned to the person, body, or institution that has the ultimate authority over other people in order to establish a law or change an existing law.[2] ...........
Hardly think that those that are disputing the legitimacy of sovereignty as it has stood traditionally in New Zealand, are actually all that interested in either its literal context or historical significance. Unless of course there is an actual vested interest in replacing the status quo.
Oh the answer will not be found in the parliamentary/political arena thank god. All New Zealanders are ultimately reliant on the judiciary. Therefore all New Zealanders need to be more than watchful as to what laws and statutes our parliamentary law makers are proposing to fiddle with. And on that note the present incompetent lot hardly inspire confidence sad to say. Wake up time for the silent majority surely.
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