What happened Wednesday

A review of things you need to know before you go home on Wednesday; new notice saver, retailers paying more, business costs rise sharply, executive changes, swaps stable, NZD firm, & more

23rd Jun 21, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
No changes so far today.

TERM DEPOSIT RATE CHANGES
Heartland Bank has launched a new 32-day Notice Saver, that starts with a 0.75% interest rate.

PAYING MORE
The average wage in the retail sector has risen +6.1% nationally in the last year, and now sits at $25.05 nationally, according to Retail NZ’s latest Wages Guide.

COSTING MORE
BusinessNZ says a survey of 87 large, medium, and small businesses, shows big increases in electricity, gas and transport costs hitting them. 74% of respondents said they will have to pass cost increases onto customers.

PROMOTING SKILL
The Guardians of NZ Superannuation, the Crown entity that manages the $58 bln NZ Super Fund, has appointed Dr Charles Hyde as Head of Asset Allocation. It is an internal appointment.

HIRING EXPERIENCE
Insurer Suncorp in New Zealand announced today that it has appointed Andrew MacFarlane as Chief Financial Officer. MacFarlane is a 25 year veteran from the ANZ finance team.

MANAGING INVESTMENT SCHEMES
The FMA has published a review of managed investment schemes. It contains recommendations on liquidity risk management frameworks (with a focus on stress testing), processes and procedures, following the August 2020 self-assessment survey completed by 51 regulated entities. It will be useful for directors, senior management and investment personnel of managed investment schemes.

TRADING WITH THE ENEMY
Australia is reporting a huge AU$13.3 bln merchandise trade surplus in May, easily a new record. It is based on very strong exports of iron ore, coal and meat. Their exports rose to a massive AU$39.2 bln in the month, with a +16% rise to China. Their political dispute isn't hurting Australia yet, and that will be annoying Beijing a lot.

COMING EARLIER
In Australia, on big bank (the CBA) is now predicting the RBA will lift its official interest rates well ahead of their current 2024 timetable. Their prediction is now November 2022.

GOLD SLIPS
Compared to where it ended yesterday, the gold price is down -US$8 and now at US$1780/oz in early Asian trading.

EQUITY MARKETS FIRM
The S&P500 ended the earlier Wall Street session up +0.5% making it a +2% gain in two days. Tokyo has opened up a minor +0.1%. Hong Kong has opened up +0.6% while Shanghai is up +0.2% in very early trade. The ASX200 is down -0.4% on the rising Sydney pandemic news while the NZX50 Capital Index is up +0.3% ignoring the Wellington rise in Alert Level.

SWAP & BONDS YIELDS HOLD
We don't have today's closing swap rates yet. If there are significant changes again today, we will update this item. They probably held, little-changed. The 90 day bank bill rate is unchanged at 0.34%. The Australian Govt ten year benchmark rate is unchanged at 1.53%. The China Govt ten year bond is down -1 bp at 3.11%. The New Zealand Govt ten year is unchanged at 1.82% and at the earlier RBNZ fix of 1.82% (+2 bps). The US Govt ten year is down -1 bp to 1.47%.

NZ DOLLAR FIRMS
The Kiwi dollar has firmed a little from this time yesterday and is now at 70.1 USc. Against the Aussie we are up at 92.9 AUc. Against the euro we are up at 58.8 euro cents. That means the TWI-5 is now slightly firmer at 72.5.

BITCOIN EXTREMELY VOLATILE
The bitcoin price is now at US$33,902 and up +3.2% from where we were at this time yesterday. But it has been extremely volatile in between. At one point it got as low as US$28,815. Volatility in the past 24 hours has been +/- 9.6% and about as high as we have ever seen.

This soil moisture chart is animated here.

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Daily exchange rates

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Source: RBNZ

Source: CoinDesk

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15 Comments

by lonewolfnz | 23rd Jun 21, 4:03pm 1624421024

"At one point it got as low as US$28,815. Volatility in the past 24 hours has been +/- 9.6% and about as high as we have ever seen."

Not quite. Recall march 2020 last year - a 50% drop in 30 hours. And to counter balance that, a +43% jump in around 10 hours on 23 September 2019 when President Xi mentioned blockchain in a speech!

by J.C. | 23rd Jun 21, 4:25pm 1624422341

Last night was rugged. It was unclear where things were heading after breaking the $30k resistance. The buying was strong and brave. And let's be real. No asset class is subject to the dire news releases and anti-propaganda that the ol' rat poison has been receiving. That's a good indicator that the ruling elite is terrified of what it represents. And I'm not referring to terrorists and drug runners and environmental destruction. That's just a sideshow to indoctrinate the sheeple.

by lonewolfnz | 23rd Jun 21, 4:33pm 1624422810

Every trader and his dog has been talking about buying at 28k. So I guess it makes sense to front foot that instead and buy a little sooner.

We'll see if its a wise choice. The best buy I got on this leg down was a mere 33.5k

by Ezy | 23rd Jun 21, 7:56pm 1624434968

While I'm not sure traditional trading patterns apply in the case of BTC (vis a vis death cross), there's a lot of chatter that we're approaching the end of a Wyckoff Market Markdown Cycle. Whatever the case, Bitcoin is going to 6 figures before the end of the year.

https://twitter.com/fromthe_tales/status/1407558424376786944

by J.C. | 23rd Jun 21, 8:26pm 1624436793

Yes Ezy. We're potentially perched at the point of something quite epic.

by Ezy | 23rd Jun 21, 9:29pm 1624440562

I see all the Chicken Littles have retired for the evening.

by youngdumbandbroke | 23rd Jun 21, 10:01pm 1624442503

The Wellington corona hawk has scared them off

by VictimOfOCR | 23rd Jun 21, 10:29pm 1624444147

28.9k last night. Pretty chuffed I almost picked the bottom.

I’d had that buy order in for weeks now. I’m feeling some explosive moves upward in the next 1-2 months.

by JimboJones | 23rd Jun 21, 4:57pm 1624424256

"That's a good indicator that the ruling elite is terrified of what it represents" - I don't think that, its just that they can see a FOMO based pyramid scheme when they see one.

by Hardly | 23rd Jun 21, 5:06pm 1624424766

You mean like the NZ housing market?

by lonewolfnz | 23rd Jun 21, 5:15pm 1624425348

You got in before me on that one :)

Could probably add stocks these days as well

by Hardly | 23rd Jun 21, 5:25pm 1624425935

Yeah everything is going overinflated.

by Ezy | 23rd Jun 21, 8:25pm 1624436717

Indeed. Except BTC had crashed 421 times. But the traditional markets haven't been allowed to crash at all.

by Audaxes | 23rd Jun 21, 5:32pm 1624426326

Their political dispute isn't hurting Australia yet, and that will be annoying Beijing a lot.
Why bother? -Australia Takes China To WTO Over Wine Tariffs As Biggest Export Market Gutted
Moreover:
No Reflation Here: PBOC Balance Sheet Update May (Same As April)

Put it all together: abnormal dollar situation, less currency and not much bank reserves. Like Xi has been saying all along, there’s not going to be any RMB cavalry riding to the global economy’s rescue. Rather, the Chinese seem well aware of the faults in the global economy, the various shortfalls being exposed in it, and are quite content instead to limit their own exposures to them.

So far as the Chinese are concerned, both fiscal and monetary, this is it; as good as it will get and it’s not all that good.

Is the real reason the US is so interested in what’s going on in Xinjiang because it contains so much oil?

by Lapun | 23rd Jun 21, 9:16pm 1624439778

No. The oil was there last year and it was there a decade ago and the decade before that. It hard to imagine any location on earth less suitable for oil exploration and extraction by American firms. I think people are interested in Xinjiang province today because of the cultural genocide of over 10 million people and the imprisonment of one in ten chosen by ethnicity. It is not uniquely terrible in the history of the world but it is surprising in a modern world that has made progress on human rights in most countries since WW2. It is sad and it is interesting that it has happened in a country that has made so dramatic a rise from almost universal desperate poverty to reasonable living standards for most of its citizens.