Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
ASB is out there all alone so far with yesterday's sharp rise in rates. No-one else has joined them yet.
TERM DEPOSIT RATE CHANGES
Heartland Bank made some minor tweaks today.
UNCHANGED
Banks have not reached any further into the Funding for Lending pot still on offer at the RBNZ. So far only $3.55 bln of the $28 bln on offer has been taken up.
RECORD HIGH
The number of new homes being built in Auckland has more than doubled in the last five years, now almost +14,000 in the year to May. With borders closed, this rising activity will be eating into the 'shortage' pressures in the Queen City.
BIG PROFITS FROM CARBON TRADING?
Desktop readers who use our Rural section can find a daily chart of the New Zealand carbon price in the RH sidebar, which is now up to NZ$47.45/NZUnit (a NZU is one tonne equivalent of carbon dioxide emmissions). That has risen from NZ$23.20/NZU two years ago. As sharp as that has been, you should note that the EU is the other main market, and their prices have risen from €15.70 two years ago (NZ$26.36) to €52.40/unit today, or NZ$88.16. That means the NZ price is now 46% lower than the EU price. For investors, that may suggest large gains are awaiting them if they buy into the NZ market now. China is set to launch its long-planned national emissions-trading scheme, a system that would create the world’s largest carbon market and double the share of global emissions covered under such programs.
HIGH, BUT WELL BELOW RECORD LEVELS
As at the end of June, the number of people on Jobseeker Support (unemployment benefit) has fallen to 190,260 and that is back to the level it was a year ago. In between it rose to 212,469. This is data released by MSD today and is 6.1% of the working aged population and still an unusually high level. The numbers on Sole Parent Support (65,964) and Supported Living Payments (94,904) remain at or near record high levels. Across all working age benefits, there are now 354,744 people and still a level above the peak of the GFC. This is 10.6% of the working aged population, but is well below the GFC peak of 12.2% in December 2010 and the all-time modern peak of 15.9% in December 1998.
MIXED RESULTS
There was another NZGB bond tender today with $500 mln offered across three maturities, and they attracted $1.07 bln in bids. The April 2024 $200 mln was popular, attracting 19 bds totaling $495 mln. Twelve bidders won at a median yield of 0.92% pa, up sharply from the 0.74% at the prior equivalent tender two weeks ago. The $200 mln April 2029 offer wasn't anywhere near as popular, getting only $280 mln in bids and 24 or the 26 bidders walked away with some of this. However they only got a 1.47% yield, which was down from the 1.54% pa two weeks ago. The final $100 mln was the most popular offer with 26 bidders offering $297 mln. But only six won anything and they had to settle for a yeild of 2.10% pa, down from 2.29% two weeks ago.
CHINA'S MOMENTUM SLOWS
China’s economy grew by an annual rate of +7.9% in the second quarter of 2021 compared with a year earlier to post a +12.7% growth in the first half of the year. But this was slower than most analysts had expected (+8.1%) and the weakness probably came in the June month and carried on into July. Speculation is rising that Beijing will juice up more fiscal support. Retail sales and industrial production levels beat estimates but growth rates for both were lower than in Q1. Electricity production was up +7.4% from a year ago, but only +7.0% higher than in June 2019, probably a better indication of how their economic activity is tailing off.
O'OH, MOVING OUR WAY
In pandemic news, new cases in Indonesia are now higher than new cases in India (and nealy as high as Brazil). The epicenter of the pandemic has shifted closer to us - and more importantly, Australia. In NSW there were 67 new cases yesterday, and 840 active cases there. In Melbourne, there were very few new cases (+2).
TEMPORARY?
In Australia, an additional +50,000 full-time jobs drove their jobless rate down to 4.9% in June, its lowest level in more than a decade, but Sydney’s prolonged lockdown is expected to drag on the eight-month hiring spree and it may not stay down for long. Worryingly, their underemployment levels are up. The New Zealand jobless level was 4.7% in March and the June data will be released here on August 4, 2021.
GREG CROSS JOINING ASB BOARD
Greg Cross, a technology entrepreneur, CEO and company director, is joining ASB's board on August 16. Among other things Cross has chaired the IceHouse and NZ Trade and Enterprises’ Global Beachhead programme.
GOLD FIRMS FURTHER
Compared to where we were this time yesterday, the gold price is up +US$14/oz to US$1826/oz in early Asian trading.
EQUITIES QUITE MIXED
Earlier today the S&P500 ended up an insignificant +0.1% on Wall Street. In Tokyo today, their equity market is down -0.9% in early trade after yesterday's rise. Hong Kong has opened up almost 1.0%. Shanghai is down -0.2% in their early trade. The ASX200 is flat in early afternoon trade, and the NZX50 Capital Index is down another -0.4% in late trade.
SWAP & BONDS RATES FLATTEN SHARPLY
We don't have today's closing swap rates yet and if there are significant ongoing changes we will note them here. They probably flattened sharply. The two year is higher by about another +6 bps. The five year has jumped more than +20 bps. But the ten year is -4 bps lower. The 90 day bank bill rate up at 0.41% and +8 bps. It has subsequently moved up to 0.44% in a continuing rise. The Australian Govt ten year benchmark rate is down a sharp -6 bps at just on 1.30%. The China Govt ten year bond is levelling off lower at 2.97%. The New Zealand Govt ten year is up just +1 bps so far at 1.65% and now above the earlier RBNZ fix of 1.64% (+5 bps). The US Govt ten year is down -6 bps from this time yesterday at 1.34%.
NZ DOLLAR EASES
The Kiwi dollar has eased from its overnight high to just on 70.1 USc. Against the Aussie we are unchanged at 93.9 AUc. Against the euro we are soft at 59.2 euro cents. So the TWI-5 is lower compared to where we were this time yesterday at just under 72.8.
BITCOIN STABLE
The bitcoin price is now at US$32,761 and up +0.8% from where we were at this time yesterday. Volatility in the past 24 hours has been low at +/- 2.5%.
This soil moisture chart is animated here.
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