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A review of things you need to know before you go home on Tuesday; Westpac raises mortgage rates, QV sees property worm turning, AML action heats up, bitcoin sinks, swaps soft, NZD holds, & more

A review of things you need to know before you go home on Tuesday; Westpac raises mortgage rates, QV sees property worm turning, AML action heats up, bitcoin sinks, swaps soft, NZD holds, & more

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
Westpac followed Kiwibank up for 3, 4 and 5 year fixed rates. But it didn't follow Kiwibank down on the 1 year rate. More here.

TERM DEPOSIT RATE CHANGES
Heretaunga Building Society, and the NZCU Baywide group all increased TD rates today.

THE PROPERTY WORM TURNS
Quotable Value says average housing value growth is slowing and is likely to slow further.

SERIES LOW
RBNZ data released today for April (B6) shows that the interest rate charged for business loans has fallen to a new series low. This loan yield is now just 3.18% pa, the lowest since this series started in January 2017. Business lending rates are following mortgage rates down.

AML HEAT INTENSIFIES
SkyCity (SKC) says Australian regulator AUSTRAC has identified 'potential serious non-compliance' with money laundering and counter-terrorism financing rules at SkyCity's Adelaide Casino. AUSTRAC is also investigating Crown Perth. And it is also bearing down on NAB for slow fixes to their AML procedures.

POLICE TRUMPET 'HUGE BLOW' TO ORGANISED CRIME
As part of a major international operation, NZ Police say they have made 35 arrests, laid more than 900 charges and seized $3.7 million worth of assets. These actions are part of three major organised crime investigations targeting the importing, sale and supply of methamphetamine and money laundering. Police say senior members of the Waikato Comancheros, Waikato Mongrel Mob and Head Hunters were arrested. Some 20 ounces of meth plus a range of other drugs, guns, vehicles, boats, cash and mobile phones were seized. Police say these operations deal a "huge blow" to organised crime.

S&P REVISES OUTLOOK ON 3 BIG BANK CREDIT RATINGS TO 'STABLE'
S&P Global Ratings has revised the outlook on its credit ratings of ANZ, ASB and BNZ to "stable" from "negative." S&P also affirmed the three banks' AA- ratings. The move comes after S&P revised its outlook on Australia's AAA sovereign rating to stable, which flowed through to the Aussie parents of NZ's major banks. The outlook on Westpac NZ's AA- rating remains negative, however, because the Westpac Banking Corporation is considering a demerger of its Kiwi subsidiary.

VACCINE FLOW PICKS UP
The New Zealand Government says Pfizer has scheduled delivery of an estimated 1 million doses of vaccine to New Zealand during July.

TAPERING ADJUSTMENT
As part of an overall fund-raising tapering already signaled by Treasury, their Debt Management Office has launched a new 2.00% coupon, 15 May 2032 nominal bond. Given the timing of the launch, they have cancelled their tender (#772) scheduled for 10 June 2021.

A MAKE-UP WEEK
Last week, the capitalisation of the NZX50 rose very strongly, up +2.5% for the week which takes the rise since September 50 over +5%. This capitalisation rise of +$3.1 bln in the week however only just makes back some of the fall over the past four weeks. The big winner last week was Intratil (IFT), which rose two places to #8. Heartland Group (HGH) fell two places to #29.

LOCKDOWN TO END
The Australian state of Victoria has said it is on track to end its lockdown on Thursday at midnight.

'EXCEPTIONAL LEVELS'
Business conditions in Australia rose to a fresh record high in May (now +37 index points), driven by further gains in every key component. But unlike in other countries, the prices aspect isn't zooming higher, not yet at least. Boardroom decisions to invest are very strong. NAB is also saying the Australian economy is now larger than pre-pandemic, and the Q2-2021 growth will be strong.

GOLD STRONG
Compared to this time on Friday, the gold price is up +US$36 and now at US$1900/oz . It closed in New York at this same US$1900/oz and in London at US$1888/oz.

EQUITIES TENDING POSITIVE
Wall Street couldn't quite move into positive territory today, with the S&P500 ending down -0.1%. The Tokyo market has started out up +0.3%, and is being matched by Hong Kong so far. Shanghai is up +0.2% in early trade. The ASX200 is up a minor +0.1% in early afternoon trade, and the NZX50 Capital Index is heading for a +0.3% gain late in its session.

SWAP & BONDS YIELDS SOFT
We don't have today's closing swap rates yet. If there are significant changes again today, we will update this item. The 90 day bank bill rate is unchanged at 0.32%. The Australian Govt ten year benchmark rate is unchanged at 1.60%. The China Govt ten year bond is little-changed at 3.12%. The New Zealand Govt ten year is down -4 bps at 1.82% and now the same as the earlier RBNZ fix of 1.82% (-2 bps). And the US Govt ten year has risen +4 bps to 1.57%.

NZ DOLLAR HOLDS
The Kiwi dollar has slipped very slightly in trading today to 72.3 USc but holding on to almost all the weekend gains. Against the Aussie we are little-changed at 93.2 AUc. Against the euro we are firm at 59.3 euro cents. That means the TWI-5 is now at 73.8 and only marginally below where we opened this morning.

BITCOIN SINKS
The bitcoin price is now at US$32,640 and down a very sharp -8.5% from where we opened this morning. Volatility in the past 24 hours is back at extreme levels, +/- 6.7%.

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End of day UTC
Source: CoinDesk

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36 Comments

There is a hard floor at zero for bitcon... :)

12
up

Taking a good ol' monkey hammering. That's what to like about these markets. They clean themselves out. Just like capitalism should be instead of what masquerades as investment markets for the masses. And just remember, volatile markets is where the real money is made. Not state-sponsored property bubbles.

To be fair they need a good old clean out when probably something like 99% are speculators. At least the housing market and fiat currency have a good percentage of actual users.
I wonder how many times Bitcoin can go up and down before it just fails completely (or becomes stable). Or will it always be a massive speculation gamble where some people win big and many more lose. I must admit if it goes right back down again I’ll probably have a punt.

To be fair they need a good old clean out when probably something like 99% are speculators

Actually the data is showing wealth transfers from speculators to long term hodlers. But then you might define those long-term hodlers as speculators. 10% of the total supply has moved into the hands of the long-term hodlers.

Its tanking badly. Bitcoin is no different to Fiat, its a confidence game. The key difference however is the top players cannot get out of Fiat and they wouldn't want to anyway but the top players can all get out of Bitcoin. The big question is at what point will they cut their losses and bail ? Probably got a lot further to fall before panic selling sets in. If it drops below $20K I would be worried unless all you have is a few hundred bucks in it.

Well that’s the big difference at the moment: fiat has a massive number of actual users (and uses), whereas Bitcoin is almost pure speculation (and is almost useless).

I would be more worried about inflation affecting your precious FIAT

That is only a problem if you have it invested in fiat (cash at bank or cash under mattress). And even if you do you would expect interest rates to compensate if we do get inflation.

We already have inflation?

“I got a call from Paul (Tudor) Jones and he says, “do you know that when Bitcoin went from $17,000 to $3,000 that 86% of the people that owned it at $17,000, never sold it?”....So here’s something with a finite supply and 86% of the owners are religious zealots.
I mean, who the hell holds something through $17,000 to $3000? And it turns out none of them — the 86% — sold it. Add that to this new Central Bank craziness phenomenon.
It goes up to $6,000 in the middle of the last spring. I got to buying some just because...For some reason, they’re looking at this thing the way I’ve always looked at gold, which is a store of value if I don’t trust fiat currencies.”

- Stanley Druckenmiller

Your slowly getting it, its called asymmetrical returns!!
The potential to lose 1x your investment if it goes to he "hard floor of zero" weighed against the 10-100x return if it continues to grow as a global asset. And even more if it becomes the global reserve currency.

11
up

A fine mess.

https://www.rnz.co.nz/news/ldr/444284/west-coast-mayors-call-for-halt-to...

"We want it stopped. It's setting councils up to fail with their ratepayers - people are not happy. It's basically theft of private land, and we're being thrown under the bus - forced to put rates up to implement something people don't want."

Seems its Kelvin Davis v Environment Minister David Parker and his two associate ministers James Shaw and Phil Twyford....

12
up

Reading that, and the column by Andrea Vance on Stuff last weekend, it is obvious this government are no longer The Untouchables. They are now The Unreachables.

Yep. Activists make terrible governors & administrators. HT. HT.

With inventory of homes for sale continuing to fall the worm may not yet be done with its host.

Or, "As the host withers, so doth the worm"

18
up

Nice to see TD rates starting to rise – albeit from absurd to abysmal.

Decided to not roll over my latest W/Pac TD maturity en masse – will split it and throw a lump sum at Milford Asset Management – Gaynor may be gone, but not forgotten.

This whole 0.25% OCR and “look through” inflation nonsense is just so ridiculous.

Me too
Gaynor is still a director

Still got to wait until August here for the rollover. Perhaps the picture will be a little clearer by then. May have to take a short term at a bad rate if things look like they are trending up rapidly. Personally I don't care that much as long as they are paying me and I'm not paying them.

I can’t believe anyone bothers with term deposits in the current environment

I've been with Milford for a number of years. Didn't know Gaynor had gone. Its now just like another investment corporate. Difficult to decide whether to shift as most of the others also fall into the investment corporate category. Probably a case of better the devil you know.

https://www.nzherald.co.nz/nz/international-police-operation-how-the-gan...

“In Australia, more than 220 members of underworld groups were nabbed after the lengthy investigation.”

That’s all very good – but then how many of that 220 are going to be ultimately deported back our way when finished with.

They'll be going straight to the cool room.

Mangere?

Tell em they're dreamin

Not colder than the homeless in South Island.

Why wait until Thursday? "Concerning reports that Victorian schools are dealing with an unprecedented surge in both self-harm & suicide attempts. It’s across the board from prep right through to Year 12 both in the regions and in the cities."
https://www.heraldsun.com.au/education-victoria/children-as-young-as-fiv...

Covid IFR 0-17yrs 0.0006%
https://www.cdc.gov/coronavirus/2019-ncov/hcp/planning-scenarios.html

Chance of being struck by lightning in Oz - 0.0083%

Median age of death with covid in Oz - 86 years.
https://www.health.gov.au/resources/publications/coronavirus-covid-19-at...

You've got the numbers for the covid IFR and the chances for getting struck by lightning. Care to share the numbers for self harm as well - I notice that this "unprecedented surge" is lighter on hard numbers than the remainder of your comment.

OMIGOSH, concerning reports?!?

Quick, make policy changes based on a media article.

Why are the Nurses being thrown under the campaign bus?

Stinky, the PM broadcasting a 17% figure is bad faith negotiationing & paints them as greedy & ungrateful - projection you say?

https://i.stuff.co.nz/national/politics/125372846/prime-minister-jacinda...

https://www.telegraph.co.uk/news/2021/05/08/ardern-isnt-lovely-have-beli...

The Prime Minister of New Zealand is fawned over worldwide for her empathetic manner. But increasingly, her actions stink.

Jacinta has a pretend degree, unlike nurses who have real qualifications. She can’t cope with that.

You only need a diploma to be an (enrolled) nurse don’t you? Diploma < degree.

No, just no.

Not to mention her inactions!

13
up

Are you telling me NZ has a problem retaining nurses starting on 60k in a country where the average house is a million? Who would have seen that one coming?

SMH. It’s a scam but it’s competing with the USD?
Sounds like a good buy signal. All this FUD being thrown around at the moment seems to indicate we’re at the ‘then they fight you’ stage.

https://www.independent.co.uk/news/world/americas/us-politics/trump-bitc...