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
TSB has raised most TD rates from a six month term to 5 years.
A NEW RECORD HIGH
BNZ is reporting that job advertising continues to build on its already exceptionally high level. The +1.0% increase in June took SEEK NZ ads to another record high. The trend remains firmly positive. Annual comparisons remain distorted by the COVID-compromised base period of last year. A better perspective is gleaned from the fact that job ads in June were more than +24% above pre-COVID highs.
LOTS OF BIDDERS, A FEW BIG WINNERS
A total of $1.8 bln was bid today on the four NZ Government Bond tender tranches where $550 mln was offered. The May 2026 $200 mln attracted 24 bids totaling $717 mln, but only 8 bidders won anything, and they bid 1.09% pa, similar to the prior equivalent tender two weeks ago. The May 2028 $200 tender was tighter with only two of 24 bidders winning anything, and those two bis just 1.35% pa which was well down from the 1.43% in the prior equivalent event three weeks ago. The April 2033 $100 mln was the tightest with bids for $338 mln, but only one bidder of 31 won it, bidding 1.76% pa and well down from the 1.96% two weeks ago. There was also an inflation-linked $500 mln tender, and that was spread around 17 winners (of 35 bids) who on average won at 1.04% pa plus CPI, and down from 1.12% plus CPI two weeks ago.
WE'RE RICH! - WELL SOME OF US ARE
The RBNZ released the CoreLogic valuation of all residences in the country as at March 2021 - and they now total $1.5 tln, and that is up +9% in a quarter and +23% in a year. (For every woman, child and man, that is $300,000 each!) Of course, based on CoreLogic data since March, another +$100 bln was probably added in the three months to June. These values now exceed 4.6 times the value of the annual economic output of the country. Five years ago it was 3.5 times; ten years ago it was under 3 times. Twenty five years ago it was 1.6 times. See this.
A PUSH FOR RAISED SERVICEABILITY BUFFERS
In Australia, expectations are rising that new macroprudential restrictions will be introduced before the end of the year. APRA is already using a soft touch approach, but harder limits look likely in the next few months. Housing finance continues to rise rapidly, with investor lending now surging. This points to a further sharp acceleration in credit growth, which is set to outstrip income growth by a significant margin, something that regulators have highlighted as a criterion for acting. Measures being considered were: increasing the serviceability buffer on the mortgage rate (currently at +2.5%), targeting high LVR, and targeting high DTI loans.
AIRFREIGHT DEMAND HIGH & TIGHT
May international air cargo data was out last night and it was particularly strong, coming in more than +10% higher than pre-pandemic levels. In the Asia/Pacific region the gain on that same basis was only +5%. It was North American that drove these gains. Air cargo capacity continues to slowly improve despite the lack of international passenger traffic. Having said that, the market remains tight, with no clear decline in cargo load factors. June is also likely to be equally positive.
NO SYDNEY PROGRESS
Sydney’s COVID-19 outbreak jumped by 38 new cases today and 40 people are in hospital. The NSW Premier says ending Sydney’s lockdown on July 16 depends on people following the rules more closely - which they aren't doing in Sydney's south-west.
GOLD UP AGAIN
Compared to where we were at this time yesterday, the gold price is up +US$2/oz to US$1799/oz in early Asian trading. But that is down -US$4 from where it closed in New York.
EQUITIES MIXED AGAIN
The S&P500 ended its Wall Street trading up +0.3%. In Tokyo, they have started today's session down another -0.5% on top of yesterday's hard drop. Hong Kong has started today a sharp -1.6% and also compounding the prior day's fall. Shanghai has opened down -0.3%. Asian markets are suffering anxiety of resurgent pandemic outbreaks. The ASX200 is trading +0.3% higher in early afternoon trade. The NZX50 Capital Index is down a minor -0.1% in late trade.
SWAP & BONDS FLATTEN SHARPLY AGAIN
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 little-changed at the 1 and 2 yr end and holding the recent hikes. But they will no doubt be down sharply at the long end again. The 90 day bank bill rate is up +1 bp at 0.35%. The Australian Govt ten year benchmark rate is down -3 bps at just on 1.35%. The China Govt ten year bond is down a chunky-for-them -5 bps at 3.05%. The New Zealand Govt ten year is also down another -8 bps so far today at 1.57% and now well below the earlier RBNZ fix of 1.63% (-1 bp). The US Govt ten year is down another -4 bps from this time yesterday to 1.32%.
NZ DOLLAR SOFTER
The Kiwi dollar has slipped further today, down another -30 bps and now just over 69.8 USc, unable to hold the overnight rise. Against the Aussie we are little-changed at 93.7 AUc. Against the euro we are unchanged at 59.3 euro cents. But the net of the small ups and downs means the TWI-5 is holding still at 72.8.
BITCOIN SLIPS
The bitcoin price is now at US$33,363 and down -2.6% from where we were at this time yesterday. Volatility in the past 24 hours has been moderate at +/- 2.9%.
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6 Comments
"WE'RE RICH!" Minor typo . . . $300,00 each is $300,000 each.
Although seemingly significant increase in personal wealth, that home is still the same home.
Same old, same old so not getting excited.
I feel like if homes made people rich the homes themselves would be less shitty.
One Time at Band Camp..
Had an end-of-year auction at intermediate once. Throughout the term we were able to earn 'good behavior dollars' and bid on the limited items at auction [food stuffs, in vouge yoyos, trading cards.. even remote-control-cars]
Funny thing; the costs of the actioned items (assets) rose to equal the 'good behavior dollars' (money supply).
NOW: You would have thought some of us kids would have money left over? Correct, but remember; there was a limited supply of items being auctions!! .. It didn't take long for kids to realize they could pool their remaining 'good behavior dollars' and increase their purchasing power.. mates purchasing remote-controlled-toys as a group.
An economic lesson for sure. What stuck me was that no matter how much 'good behavior money' was chasing the yoyos, remote-controlled cars, etc.. it wasn't going to change the items or numbers there of - as David Chaston alludes to above; Keynesians seem to gloss over this.
Zack B,
Talk me through "Keynesians seem to gloss over this". What precisely is 'this'? It seems to relate to a fixed supply of stuff which is mercantilism not Keynesian.
If I lived in Sydney I'd go to somewhere like the UK for a few months:
1. Plenty of vaccine for everyone, just walk in and get it with no questions asked.
2. No more lockdowns because there is no relationship between cases and deaths any more. The pandemic is over in effect.
3. You can go on holiday to Euroland, or further abroad, one you've had your jabs.
4. You can watch Australia win the Ashes in person.
Just nip back to Australia once all this has blown over.
Some data stunned this comment box I believe.
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