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A review of things you need to know before you go home on Thursday; some rare FHB good news, insurers fail culture review, TSB fines for AML lapses, net worth jumps, swaps flatter, NZD firms, & more

A review of things you need to know before you go home on Thursday; some rare FHB good news, insurers fail culture review, TSB fines for AML lapses, net worth jumps, swaps flatter, NZD firms, & more

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

MORTGAGE RATE CHANGES
No changes today.

TERM DEPOSIT RATE CHANGES
Rabobank raised a number of its term deposit rates, with the 5 year now at 2.05%. Update: TSB and SBS Bank have both announced higher term deposit rates.

SOME RARE FHB GOOD NEWS
House prices are flattening out at the bottom of the market, bringing hope to first home buyers, but they aren't getting cheaper. It still takes 3+ years to save a FHB 10% deposit (almost 5 years in Auckland), and rising interest rates pose a new risk. Check home loan affordability here.

MOST INSURERS FAIL CONDUCT & CULTURE REVIEW
All but two of NZ's general insurers failed a FMA conduct and culture review which prompted insurers to refund customers the FMA said were over-charged. Shonky products have now been from the market; Poor performers were unnamed and not prosecuted. Predictably, the insurers lobby group passes this off as 'old information'.

A GREEN HYDROGEN POWERHOUSE?
Meridian and Contact are investigating use of renewable energy in Southland to produce green hydrogen 'at scale' once the aluminium smelter contract finishes at the end of 2024

SHAME WORSE THAN THE FINE
TSB and the RBNZ reached an agreement in a precedent-setting court case, where bank TSB pays $3.85 mln for breaching anti-money laundering laws.

RISING SHORT TERM YIELDS, FALLING LONG ONES
There was another NZGB bond tender today offering $300 mln. $1.8 bln was bid in 118 bids. But only 22 were accepted overall. Ten of 25 bidders won a portion of the $200 mln May 2026 bond and they won it at an increased yield of 1.15% (vs 1.09% two weeks ago). The $200 mln May 2028 tranche had only 4 winners of 28 who bid $716 mln. They too got an increased yield of 1.37% pa vs 1.35% last time. But the 2 winners of the $100 mln April 2033 tranche accepted 1.72% pa which was lower than two weeks ago, leaving 30 others without anything. There was also a linker on offer today, $50 mln which attracted 33 bids but only six won anything and they were prepared to accept CPI plus 0.66% pa, down sharply from 1.04% plus CPI last time.

LOOKING FOR $250 MLN PLUS
ANZ New Zealand said it is preparing to go to market for up to $250 mln of "unsecured subordinated notes" with the ability to accept unlimited oversubscriptions at ANZ’s discretion. Previous other bank offers have delivered handsome oversubscriptions. These Notes are to be used as Tier 2 Capital for ANZ’s regulatory capital requirements. They are expected to have a 10 year maturity date, but may be redeemed early, if certain conditions are met, from 5 years, or earlier for tax or regulatory reasons. The Notes are expected to have a credit rating of A- from S&P Global Ratings.

NZ PAYDIRT
New Stats NZ figures show that in the 12 months to March, the country's household net worth increased by over $400 bln - about the same as the increase over the whole of the previous four years; But our savings rate is dropping again.

TINY BITE
One local bank took an $11 mln loan from the RBNZ's Funding for Lending program yesterday.

AU PAYDIRT
In Australian their June 2020 exports topped AU$41.3 bln with iron ore and other dug-up minerals making up almost half of that. These surging minerals exports allowed them to post a AU$13.3 bln merchandise trade surplus in the month.

NO PRESSURE LET-UP
There were 124 new community cases in NSW today, and another 26 in the community in Victoria where their lockdown has been extended for another 7 days. South Australia is also in lockdown. Now Queensland has closed it border with NSW, which is a last-resort action for them. None of this gives confidence the Trans-Tasman travel bubble will re-open anytime soon. There were new cases in New Zealand, all caught at the border (mostly among ship crews), none in the community.

GOLD'S DROPS FURTHER
Compared to where we were this time on yesterday, the gold price is down -US$7/oz to US$1800/oz in early Asian trading.

EQUITIES MIXED
The NZX50 Capital Index is trading down -0.2% near the end of its session. The ASX200 is up +0.6%. Tokyo is closed for a public holiday, and Hong Kong may closed for a typhoon but is up in very early trade. Shanghai is up +1.7% in early trade. Earlier, the S&P500 ended its session up +0.8% and back within 0.5% of a record high.

SWAP & BONDS RATES LOWER
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 again. The 90 day bank bill rate up + bp at 0.46%. The Australian Govt ten year benchmark rate is up +2 bps at just on 1.20%. The China Govt ten year bond is unchanged at 2.95%. The New Zealand Govt ten year is actually down -1 bp at 1.55% and now well below the earlier RBNZ fix of 1.60% (+7 bps). The US Govt ten year is back up a sharp +8 bps to 1.29%.

NZ DOLLAR FIRMER
The Kiwi dollar has made a small comeback today to just on 69.5 USc. Against the Aussie we are little-changed at 94.5 AUc. Against the euro we are firmish at 58.9 euro cents. So the TWI-5 has risen to just under 72.6. Most of these rises happened overnight and some of it is being wound back down in local trading today.

BITCOIN JUMPS BACK UP
The bitcoin price is now at US$32,044 and up a sharp +7.6% from this time yesterday. Volatility in the past 24 hours has been extreme at +/- 5.3%.

This soil moisture chart is animated here.

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End of day UTC
Source: CoinDesk

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22 Comments

10
up

"unsecured subordinated notes"

I like it. Makes me remember why I have so much respect for........ hang on......

If NZ didn't try shooting down the iron sand mining at Petone, the country could had ridden on the wave to prosperity together with the Aussies but the preference here is for poverty.

10
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Not to mention the ban on oil and gas exploration - which "would be costly, would do little for the environment and was done without proper consultation" (https://www.rnz.co.nz/news/business/413037/oil-and-gas-ban-lacked-consul...)

Who would have this so called "prosperity CW? And I think mining ships in Wellington harbor would not go down well.

The same question that I pose to you why would a Kiwi go to a forsaken desert across the Tasman to drive a truck.

Greenwashed snowflakes down in Welly forgot that without ships, this country wouldn't even find a place on published maps.

The sad new generation in this country perhaps believe they can live on ideas and fairydust- empathy for their likes are indeed challenging.

10
up

As opposed to the sad old generation that believe they can live on flipping houses back and forth?

Actually, who though they could 'make money' (wrong concept before it starts) by extracting the finite resources of the planet in a one-off manner.

Read: Selfish.

10
up

He says while enjoying all the benefits of said resource extraction.
Selfish AND hypocritical.

Gotta love the balance of 'likes' going on here. Interest.co.nz readership showing their true colours... or age?

These ANZ New Zealand notes will most likely not offer attractive enough returns - especially considering the current environment of rising interest rates. Reflation trade is already happening and is going to grow.

Come on - try thinking.

What is the eventual home of those 'attractive' 'returns'.

Assumptions - the mother of all

In Australian their June 2020 exports topped AU$41.3 bln with iron ore and other dug-up minerals making up almost half of that. These surging minerals exports allowed them to post a AU$13.3 bln merchandise trade surplus in the month.
From China: Dollar, Deflation, And The RRRest

A ton of reasons, consistent and universally coherent reasons, to be betting global deflationary where China’s economy, its government stance on that economy, and, behind both, the actual state of the eurodollar are all concerned. Pretty much everything that’s important. And, as noted, we’ve seen this before not all that long ago.

No one remembers even a few years ago because no one was really paying attention, or knew they should pay attention, the last time (or the time before; etc.) Therefore, deflationary bond markets worldwide are some big mystery when for the public and the media when, in truth, the answers are all on the PBOC’s balance sheet. Even its inconsistencies are evidence.

Can you imagine it arriving at Britomart? Auckland to Hamilton in 12 minutes. If you judge a country by its railways then NZ is 3rd world at best.

Little write up NZ's own EasyCrypto. Now reached "close to a billion dollars in total sales. Sales are up more than 1000 percent year on year in the past year, and Easy Crypto now counts more than 100,000 people of all ages."

I don't like how all those numbers are so perfectly rounded but will give them the benefit of doubt. Also, I personally don't like the platform as it doesn't work like a transparent exchange where you're watching price and volume action.

https://nzbusiness.co.nz/news-items/nzs-easy-crypto-nears-1-billion-sales

TSB get a $4 million fine for 3 years of notified non compliance with AML laws, and it only would have been $5 million if they fought it.

Surprisingly fair.

First step of many to rid us of the possibility of decentralised regional banks servicing the local community for the benefit of the local community.

More like a wet bus ticket for a local player done good.

The regulator that lets them stay in business gave them 1000 days to sort out issues, and they didn't.

If it were big 4, it would have 0's on the end.

David, I got an email from Brian Low wanting me to click on links. To start with I thought it was another clever scam but I eventually saw the tiny interest.co logo so I assume he is indeed your marketing manager.

I have had contact with scammers in the past and was impressed how sophisticated they have become. So I won't be clicking any links on Brian's email just yet.

I received an email the other day from Brian Low regarding continued support. None of the links are dodgy.

On my set up though, the links don’t link.