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A review of things you need to know before you go home on Friday; many mortgage and TD rate changes, Marsden Point refinery to close, NZ's reserve assets fall, swaps stable, NZD stays firm, & more

A review of things you need to know before you go home on Friday; many mortgage and TD rate changes, Marsden Point refinery to close, NZ's reserve assets fall, swaps stable, NZD stays firm, & more

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

MORTGAGE RATE CHANGES
HSBC lowered all their fixed rates. More here. SBS Bank launched a new and comprehensive offer for first home buyers. More here. Kiwibank has announced its 2 year fixed rate will be raised from 2.49% to 2.79% on Monday.

TERM DEPOSIT RATE CHANGES
Treasury raised Kiwi Bond rates today with the 6 months and 1 year up +10 bps, the two year up +30 bps to 0.50%, and the four year up +10 bps to 0.70%. Meanwhile Kiwibank has ended its 9 month 1.25% 'special' with that rate reverting to 0.95%.

ALL IN FAVOUR, PLEASE SAY WHY
At the Special Meeting of the shareholders of The New Zealand Refining Company (NZR) they voted to approve transition the company to an import-only fuel terminal, under the name ‘Channel Infrastructure’. The vote was 98.8% in favour. The move will save 100 million tonnes of CO2 emissions, but most of that will just move offshore. More here. Interestingly, the share price of Z Energy (ZEl, #22) was up a very strong +5.5% today.

A (VERY) SLOW BURN
New Zealand's first electric passenger ferry is about to start sea trials in Wellington. It has been constructed with substantial public funding from EECA, Greater Wellington and Callaghan. It is a carbon-fibre 19 metre, 135 passenger ferry for use inside Wellington harbour, designed to tick the current environmental boxes. Mercury (MCY, #11) is a key supporter. The current two Wellington ferries use about 250,000 litres of diesel annually (500 L/day each) but is not clear that they will be retired from service as a result. Work on the electric ferry began in 2018, and it is not expected to go into regular service until early September. See this.

CUTTING BACK
In Australia, their central bank has cut back its year-on-year growth forecasts. It was expecting 4.75% for 2021 but now expects 4.0%. It did upgrade its 2023 forecast slightly.

STILL STRUGGLING
Auckland's water reservoir levels have finally hit 60% of capacity after having been in the low 40%s earlier in the year. Normally at this time of year they are at 85%. The smaller reservoirs in the Waitakeres are in worse shape than the larger ones in the Hunuas.

SINKING
New Zealand's official reserve assets (E1) fell to their lowest level in 15 years as at the end of July. As a proportion of GDP, they are at their lowest in 17 years, since 2004 (but in a record that only goes back to 2000).

PRESSURE IN NSW REMAINS INTENSE
There were 291 new community cases in NSW today with another 161 not assigned to known clusters, so still going backwards there. Victoria is reporting six new cases. Queensland is reporting 10 new cases. Overall in Australia, nearly 21% of Aussies are fully vaccinated, 42% have now had at least one shot. Aussie corporates are now starting to insist on 'no jab, no job' policies. There was one new case in New Zealand at the border (and a serious one in MIQ), but still none in the community. In New Zealand 15.6% are now fully vaccinated, with 25.6% having had at least one shot.

GOLD MOVES DOWN AGAIN
Compared to where we were this time yesterday, the gold price is down another -US$7/oz at US$1802/oz in early Asian trading. A week ago we were at US$1827/oz so that is a -1.4% retreat.

EQUITIES GENERALLY POSITIVE
The S&P500 ended +0.6 in Thursday trade earlier and on a rise at the end. That means it is up +0.8% so far this week and at a new all-time record high. Tokyo has opened up +0.1% but is wavering in ewarly trade. Hong Kong has opened down -0.7% in very early trade and Shanghai has opened down -0.4%. The ASX200 is up another +0.1% in afternoon trade and heading for a solid +1.3% weekly rise. The NZX50 Capital Index which is also up +0.1% in late trade today and it too is closing in on a weekly gain of +1.3%.

SWAP & BONDS RATES JUMP
We don't have today's closing swap rates yet and if there are significant ongoing changes we will note them here. They are probably unchanged with all the action done & dusted now it seems. But the 90 day bank bill rate is up +5 bps at 0.65% which is a surprise lift. The Australian Govt ten year benchmark rate is up +3 bps at 1.18%. The China Govt ten year bond is unchanged at 2.84%. The New Zealand Govt ten year however is up +2 bps at 1.62% and the same as the earlier RBNZ fix of 1.62% (+3 bps). The US Govt ten year is now at 1.24% and up by +6 bps today.

NZ DOLLAR HOLDS HIGHER
The Kiwi dollar has been just marginally softer so far today and is now at 70.4 USc and basically holding most of this week's rise. (A week ago it was at 70 USc.) Against the Aussie we are unchanged high at 95.4 AUc. Against the euro we are firmish at 59.6 euro cents. The TWI-5 is still at 73.3 and staying up because a week ago we were at 72.7.


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BITCOIN FIRM
The bitcoin price is now at US$40,489 and up +2.7% from this time yesterday. Volatility in the past 24 hours has been extreme at +/- 5.3%. A week ago the price was US$40,237 so the net change is very little.

This soil moisture chart is animated here.

Keep ahead of upcoming events by following our Economic Calendar here ».

Daily exchange rates

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Source: RBNZ
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End of day UTC
Source: CoinDesk

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35 Comments

If the New Zealand median valued house had tracked inflation over the past twenty years , it would cost $274000 today instead of $820000 for all the other reasons.
Its a global thing New Zealand in perspective https://www.ft.com/content/491a245d-4af7-4cad-b860-6ba51b86b45f.
Its only a forecast Morgan Stanley target NZD 0.66 against the greenback, stating RBNZ pricing too aggressive.
First time since March, that I have recorded end week increase listings Trade me, both nationally and for Auckland,( but not Waiheke) its all about the flow., not just the stock.

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Well that increase in values makes deposit for FHB tougher but just go to show how wrong the dgm’s have been. :)

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Man you are boring.

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HM
You don’t like the truth then: your comment is sounding very bitter.;)
A need for a contrary view to the dgm for reality.

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Blue pill and a property brokers’ catalogue for you tonight old fella?

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Sounds like a heart attack waiting to happen.

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Lol
The motherhood of dgm. Reduced to personal aspersions - tactic when one can’t mount a valid response. :)
Face reality for once. :)

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Seems to me that you're the only one casting aspersions, calling everyone a DGM.

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lcc
No; I haven’t specified anyone as a dgm rather they all are self identifying. :)

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Well an average house price of 820k is pretty doom and gloom

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Ydb
I agree with you and in my initial comment I acknowledge that a deposit is tough for FHB.
Currently FHB face a new dilemma.
On the one hand it appears that the market is cooling and RBNZ is now publicly acknowledging that current house prices are unsustainable.
On the other hand there are signs of increases in mortgage rates along with calls for increases in the OCR.
For FHB over the next few years there is a real likelihood of a shift from an issue of housing affordability to mortgage affordability.
If this site is to be about helping to make financial decisions then it really worthy that these issues need to be discussed.
What concerns me is that over the past four plus years (since 2017) there has been an increasing voices of those claiming a bubble burst and simplistic slagging of key decision makers rather than reasoned discussion of the key trends and issues.
There is nothing we can do about those things we have no control over . . . to use an analogy when sailing and caught in a storm one can’t do anything about the weather but one can control ones decisions. That decision may mean battening down and riding the storm but critical to that decision is assessing how long the storm will last.
So what does the future hold for FHBs? What is the market going to do? What is the outlook for interest rates? Why is there currently high levels of FHBs? How long is it going to be before housing and mortgages become acceptably affordable?
In the meantime all I see is pointless slagging off, five years of unsubstantiated claims of bubble burst, and ridiculous posts such as the call the other week for FHB to boycott buying when there are currently record levels of FHB.
Me? So I am a comfortable boomer and I am totally relaxed with that; many of my contemporaries are not but they need to take responsibility for that . . . pity they didn’t make more sound decisions.

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No one has self identified as dgm. That's hate speech there. ;)
In watching your comments from afar, it seems that anyone who is worried about pricing, affordability and the usual end of bubbles is a dgm in your view.

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Mister
“Hate speech” . . . Serious? Really? :) “lol” and all that.
Suggest that you have been too much afar for too short a time. Seven years of calling unsubstantiated bubble burst is dgm . . . I can quote specific examples if you really need assurance. :)

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New Zealand's official reserve assets (E1) fell to their lowest level in 15 years as at the end of July. As a proportion of GDP, they are at their lowest in 17 years, since 2004 (but in a record that only goes back to 2000).

New Zealand Government European Commercial Paper on Issue represents of a portion of NZ Treasury claims.

I guess FX swaps and basis swaps (section 10) account for the RBNZ claims.

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"New Zealand's official reserve assets fell to their lowest level in 15 years..."

If another George Soros comes along and decide to dump NZD, I wonder which bank will go belly up first.

NZ currency is exposed.

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Andrew Krieger – Famous during the October 19th, 1987 crash also known as Black Monday. He went short against the New Zealand currency and made over $300 million for Bankers Trust.

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Which came from somewhere: all of us. Same with the Douglas 'devaluation' in '84. The rich get richer, but do nothing productive. LTCM were the ultimate expression.

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I think it is actually getting more and more attractive right now to start building a position.

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The Bank of England recently released their Bank Bail In templates. Seems that savers, eg people saving to buy a house or tstite people, could be worst affected if a bail in occurs. Nz still doesn't even have a deposit guarantee

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Deposit guarantees (insurance) dont necessarily prevent bail-in.

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The crypto amendment debate has stalled the infrastructure bill in the senate. Looks like the Administration is favouring proof of work over proof of stake.

https://twitter.com/warddpatrick/status/1423464991441702912?s=21

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Smells like a battle going on in the background..either way USD is doomed

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To be replaced with what? Global debt is in US dollars so plenty of demand for us$ to meet those repayments for many years yet.

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Looks like the Administration is favouring proof of work over proof of stake.

Well that doesn't make much sense when the sheeple have been told Bitcoin would need the total equivalent power that the sun emits.

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Proof of work is an environmentally irresponsible solution to a problem that only a vocal minority care about. What a winner.

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So why is the govt supporting PoW over PoS?

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realterms - sorry, physics trumps popularity

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Surely Marsdon Point Refinery’s closure is a massive security risk for NZ?
Now we must rely on imported fuel, and are at the mercy of foreign shipping and fuel supplies?
Madness!

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Imported fuel so much cheaper.(singapore).but as I drive a EV dont really GAS

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Yes. Petrol consumption in NZ is confined to private motor vehicles. What could possibly go wrong.

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Of course you do, you buy food, have a home that requires trade services, buy goods that require logistics transport, require hospitals and hospital staffing. Everything in your life requires GAS right down to the device you type your comments on or are you completely ignorant to how stuff works and how goods get delivered to you. Perhaps you are still clueless as to how electricity gets to your home and how it gets maintained. Because you clearly have demonstrated a complete lack of a clue.

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Haven’t heard it mentioned, however I would speculate that the plant would need a massive amount of capital upgrade to keep it efficient. When the writing is on the wall things are allowed to run down well before closure announcements.

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Lets bail it out ...keep those old school boomers in a job until they qualify for super?

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Interestingly, the share price of Z Energy was up a very strong +5.5% today.

Share price bump on takeover rumours.

z-energy-in-takeover-sights-of-overseas-companies

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I've been surprised how resilient equity markets have been, even with talk about winding in some of the monetary support. Since 2009 the bull market has been absolutely relentless getting to over 4 standard deviations ahead trend for the S&P500, when we go back to trend we'll have a hell of a hangover! :-)

https://www.advisorperspectives.com/dshort/updates/2021/08/04/regressio…

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