Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
TSB tweaked some mortgage rates, with the 1 year up by +5 bps, and the three year down by -9 bps.
TERM DEPOSIT RATE CHANGES
Bank of China raised all their TD rates.
STRONG UP TREND
More than 14,000 new homes a year were built in Auckland in the year to June and that could increase by at least a third in the next 2 years. With almost 20,000 new dwelling consented in the past year, the additional housing stock being added in Auckland will almost certainly top 20,000+ per year within the next 24 months
FARM CONFIDENCE 'HOLDS'
Farmers aren't as grumpy as their public profile suggests. On-farm returns are rising. And a new farmer confidence survey from Federated Farmers shows now a net +4.4% of respondents expect their profitability to improve over the next 12 months, a 23-point increase on the January 2021 survey when a net -18.3% expected it to decline. A net 32.6% of respondents expect their spending to increase in the year ahead. "The most concerning aspect of the survey from Federated Farmers’ point of view is that nearly half of the July survey respondents said it has been harder to recruit skilled and motivated staff. That’s a further 13-point increase on the 35% of farmers who cited workforce shortage worries in January."
AUSTRALIA AT RISK
In Australia, it is becoming clear that a sharp drop in traffic levels and industrial production will have quite a depressing impact on their economic activity. Hopefully for them it will just be short term, but that is a 'wish' rather than a certainly at this time.
CHINA PRESSURES MIXED
China's consumer inflation came in marginally higher in July than expected, but still lower than for June. Retail prices for pork, beef and lamb are now all falling on a month-on-month basis. But their factory sector reported PPI up at +9.0% which was also higher than expected and matching the 13-year high reached in May. This is real pressure in a core component of the world's supply chain.
PRESSURE IN NSW REMAINS INTENSE
There were 285 new community cases in NSW today with another 170 not assigned to known clusters, so they are not getting on top of their outbreak. Victoria is reporting eleven new cases. Queensland is reporting 5 new cases with some in Cairns. Overall in Australia, more than 22% of Aussies are fully vaccinated, 44% have now had at least one shot. Aussie corporates are now starting to insist on 'no jab, no job' policies. There was two new case in New Zealand at the border (and a serious one in MIQ), but still none in the community. A ship at Tauranga has more than half its crew infected, and yet our harbour workers seem reluctant to get vaccinated. 319 of Tauranga port workers haven't yet had a single jab, of 530 at that port. In New Zealand 16.0% of the population are now fully vaccinated, with another 26.9% having had at least one shot.
GOLD MOVES DOWN SHARPLY AGAIN
Compared to where we were this morning, the gold price is down to US$1741/oz and a decrease of another -US$22/oz so far today. It was last at this level in April.
EQUITIES START POSITIVELY
The NZX50 Capital Index is up +0.2% to start the week. The ASX200 is up +0.1% in early afternoon trade. The Tokyo equities exchange is up +0.3%, Hong Kong is up +0.9%, and Shanghai is up +0.3% all in very early trade. Company earnings reports have generally been positive globally which is helping most markets stay near their record high levels. The S&P500 futures is suggesting Wall Street will open -0.2% lower however after a record high close last week.
SWAP & BONDS RATES HOLD
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 higher with the 1yr up +2 bps, the 2yr up +3 bps and the 5yr up +5 bps (H/T Nick Smyth). The 90 day bank bill rate is unchanged at 0.65%. The Australian Govt ten year benchmark rate is up +4 bps at 1.22%. The China Govt ten year bond is unchanged at 2.83%. The New Zealand Govt ten year however is up +1 bp at only 1.63% and now below the earlier RBNZ fix of 1.66% (+4 bps). The US Govt ten year is now at 1.31% and up by +7 bps today and firming on the back of the robust US payrolls data.
NZ DOLLAR HOLDS FIRM
The Kiwi dollar has been just marginally firmer than where we opened today, and now at 70.2 USc and basically holding. Against the Aussie we are unchanged at 95.4 AUc. Against the euro we are firmish at 59.7 euro cents. The TWI-5 is still at 73.3 and staying up.
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BITCOIN HOLDS HIGH
The bitcoin price is now at US$43,424 and virtually unchanged from where we started today. Volatility in the past 24 hours has been moderate at +/- 2.9%.
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