Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No more changes to report today.
TERM DEPOSIT RATE CHANGES
WBS raised some TD rates today.
ANOTHER SIP AT THE TROUGH
One bank accessed $0.5 bln in the RBNZ Funding for Lending Program yesterday, taking the total amount drawn to $3.5 bln of the $28 bln allocated. At this time we don't know who the recipient was, although we are trying to find out.
WESTPAC THE NEXT TO SELL ITS LIFE INSURANCE BOOK
NZ Super-backed Fidelity Life is buying Westpac's New Zealand life insurance business in a $400 million deal - with the help of Ngāi Tahu Holdings.
BUSINESS SENTIMENT RISES
ASB is tipping an imminent interest rate rise after the latest NZIER Quarterly Survey of Business Opinion shows the worst ever shortage of labour, while inflation pressures are continuing to build.
AUCTION CLEARANCE RATES VERY HIGH
The sales rate at Barfoot & Thompson's auctions has shoot up to 75%. Sales activity in their auction rooms is well up compared to where it was at this time of year in 2019 and 2020.
STRENGTH TO STRENGTH
Credit bureau Centrix says its data is painting a picture of an economy going from strength to strength, but activity may start slowing.
START THINKING ABOUT AGEING IMPLICATIONS
The Treasury has warned the Government that it needs to start looking at the tax, health and superannuation systems, as an ageing population is set to send the country's debt too far north.
EXEMPTION EXTENDED
Electric vehicles are exempt from paying road user charges that normally apply to vehicles that don’t pay for petrol at the pump. This exemption has been extended to March 31, 2024 as part of the Government’s Clean Car Package. EV users will presumably face RUCs then. What is the story for hybrids which do use minor amounts of pump petrol? Does that give them exemption from RUC charges?
SWAP AT THE TOP
Jan Dawson, the chairperson of the local board of Westpac New Zealand, will retire on October 1 and will be replaced by current director Pip Greenwood. Greenwood is a former partner at Russell McVeagh, and also spent more than 10 years on the legal firm’s Board, including a period as Board Chair. Greenwood also holds director roles at Fisher & Paykel Healthcare, Spark New Zealand, The A2 Milk Company, and Vulcan Steel.
AUSSIE CONFIDENCE DENTED
Consumer confidence dropped sharply in Australia last week on the back of pandemic lockdowns and state border closures.
TARGETING HERD IMMUNITY
With closed borders, ANZ reports that Fiji’s international tourism industry has been decimated. Visitor arrivals have collapsed to zero since April 2020. Businesses in the tourism region on the west coast of Viti Levu are struggling to meet commitments. However, Fiji’s vaccination program is going remarkably well. In June, a daily average of 6,000 first doses were administered bringing the total number of people with at least one dose to 318,890 (54.3% of target population). If this is replicated in July, then 75% of Fiji’s adult population would have had at least one dose by the end of the month. This means that the herd immunity threshold is achievable for Fiji by the end of September 2021 and international tourism may return to Fiji in late 2021.
ALL EYES ON THE RBA
The RBA announces its monthly monetary policy settings today, and while no change is expected to rates, there is intense interest in what they signal for their bond buying program. Update: Here is their Statement.
GOLD UP SHARPLY
Compared to where we were at this time yesterday, the gold price is up +US$13/oz to US$1792/oz in early Asian trading.
EQUITIES
After a good gain yesterday, the NZX50 Capital Index is down -0.4% today in late trade. The ASX200 is flat today unable to bounce back after a heavy fall yesterday. In early morning trade, the very large Tokyo market is up +0.5%. Hong Kong is down -0.2% in early trade. Shanghai is down -0.1% in their early trade. Wall Street returns tomorrow and the S&P500 futures is signaling this market is holding its record high levels that it closed at just prior to their holiday weekend.
SWAP & BONDS FLAT
We don't have today's closing swap rates yet. If there are significant changes again today, we will update this item. They are probably higher at the short end with the 2 year up +9 bps. That takes it to 0.9% and a +40 bps rise since the beginning of May. The 10 yr is up +5 bps today. The 90 day bank bill rate is down -1 bp at 0.33%. The Australian Govt ten year benchmark rate is up +3 bps at just on 1.46%. The China Govt ten year bond is unchanged at 3.10%. The New Zealand Govt ten year is up +5 bps so far today at 1.73% and well above the earlier RBNZ fix of 1.69% (+2 bps). The US Govt ten year is up +2 bps from this morning's open at 1.45%.
NZ DOLLAR FIRM
The Kiwi dollar has been beefed up today, up +50 bps and now at 70.7 USc. This jump happened at 1:30pm today right after BNZ released its forecast that an OCR rise is coming sooner. It won't be BNZ specifically, but the fact that all major bank economists now see a November rate hike. Against the Aussie we are also firm at 93.6 AUc. Against the euro we are firmer at 59.6 euro cents. That means the TWI-5 is at 73.3 and reversing all the recent weakness.
BITCOIN SOFT
The bitcoin price is now at US$33,882 and down a relatively minor -2% from where we were at this time yesterday. Volatility in the past 24 hours has been moderate at +/- 2.7%.
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33 Comments
No doubt BTC holders will see this as a reason to buy the dip. Tick tick tick.....
https://www.scotsman.com/business/consumer/binance-barclays-blocks-paym…
Yes. Incidentally, a UK colleague who's a 'crypto celebrity' had his accounts closed by Barclays this year. Lifelong customer but seen as an 'undesirable'. He was emotionally disturbed by it. But what you going to do?
Only ASB Bank in NZ will allow transfers to Independent Reserve, a reputable crypto exchange in Australia. No reasons given.
I thought that story about Westpac (always WBC isn't it?) was quite interesting. Being taken for AU$290m in a fraud because they never bothered to verify that the paperwork being provided was a correct and true representation makes you realise how amateur Australian banks can be when it comes to lending standards:
https://www.smh.com.au/business/banking-and-finance/i-smell-a-rat-westp…
Real Interest Rates are negative so not sure what all the commotion is about.
Funds which are required to hold treasuries might be excited. But the greatest wealth transfer in NZ's modern history has arguably already taken place..
A yet-to-happen paltry increase in rates is nothing to write home about in the grand scheme of things.
You better save half those turnips for retirement J.C. Because just like everything else, once all the Boomers are safely retired, Super will be deemed unaffordable.
And you'll also be told its your own fault for not being able to afford a house, because if you just ate one less turnip a day youd have a deposit on a studio apartment in 157 years, and its always hard getting a foot on the ladder.
You better save half those turnips for retirement J.C. Because just like everything else, once all the Boomers are safely retired, Super will be deemed unaffordable.
Not for me. With each passing day, I have the feeling that I may join with the ultra orthodox. If the millennials throw off their sacks and join up, the old farts and the ruling elite could be ruined.
Go Nurses!
https://campaigns.nzno.org.nz/claims
10% to 17%
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