Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
None to report here today.
TERM DEPOSIT RATE CHANGES
Heartland Bank has moved up its 3mth to 1.00%, and its 9 month to 1.30% (the same as its 1yr rate). NZCU Baywide and related branches (NZCU South, Aotearoa CU) have increased their 6mth to 5yr TD rates. Christian Savings also raised ist 1yr rate to 1.50%.
'MORE THAN 'JUST' A REBOUND'
Job advertising levels lifted again in July according to the BNZ/Seek report. Recall, they were already riding very high in June – well clear of the pre-COVID peak that occurred around the middle of 2019. But their 1.7% expansion in July, seasonally adjusted, put them even further north of that mark, to the extent of 27%. That’s far more than “just” a rebound.
A REBOUND & MORE
The latest data on the volume of ready-mixed concrete poured in the June quarter reveals it rose to a new record high for any quarter, and the annual volumes were a new record as well. Q2-2021 concrete poured was +11% higher than in Q2-2019. For the year to June 2021 that was +6.5% higher than the same annual period in 2019. Auckland and Wellington volumes were to new records, but although Christchurch rose marginally, it isn't back to anywhere near the levels seen in the reconstruction peak. These strong overall levels will likely be driving Q3 construction activity and its related contribution to GDP. (However, recall that cement production is a major contributor to greenhouse gas emissions, so it isn't all good. Globally, it is 8% of all emissions. Does any reader have a link to the New Zealand level?)
MORE ON THE AVANTI MORTGAGE SECURITISATION
The $350 mln Avanti RMBS issue has been priced. 80% of it is provisionally rated as AAA by Fitch and will be priced at +100 bps above the 1m BKBM Bid rate (currently about 0.50% pa). The rest is priced at progressively higher margins depending on the credit rating.
HIGH PRICES, NO SYMPATHY
Petrol prices have now risen back to three year highs on both a pump and discounted basis. It isn't really crude oil that is driving these rises, it is more that taxes are high and rising, and the local retailers have boosted their margins back to 2019 levels after the long, unusual dip in 2020/21
LOCKED DOWN, LOCKED OUT
Australian new home sales fell by -20% in July, with declines experienced in almost all major states. With lockdowns in multiple states restricting trade and eroding confidence, it is not surprising that fewer people were able to visit display homes, says their homebuilding industry body. Consumer confidence isn't flash either.
FAST RETREAT
The iron ore price is lower today, and is now down -25% in just 4 weeks.
PRESSURE IN NSW INTENSIFIES
There were another 344 new community cases in NSW today with another 229 not assigned to known clusters, so they are still not getting on top of their outbreak. Victoria is reporting 20 new cases today including 5 new mystery cases and their lockdown is to be extended. Queensland is reporting 4 new cases. Overall in Australia, more than 23% of Aussies are fully vaccinated, 45% have now had at least one shot. There were two new case in New Zealand at the border, but still none in the community. New Zealand reports 28.0% of its population having had one vaccine jab, plus 16.5% having had two.
GOLD DIPS FURTHER
Compared to where we were this time yesterday, the gold price is down to US$1732/oz and a decrease of another -US$2/oz so far today. But it is up slightly from the New York close at US$1729/oz and the London fix of US$1729/oz.
EQUITIES STILL IN MODEST SHIFTS
The S&P closed its Tuesday session up +0.1% on Wall Street, just making back Monday's dip. Tokyo has opened today up +0.7%. Hong Kong has opened up +0.5%, but Shanghai has is flat in early trade. The ASX200 is up +0.5% after yesterday's weakness. The NZZ50 Capital Index is up +0.1% in late trade.
SWAP & BONDS RATES RISING
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. The 90 day bank bill rate is up +2 bps at 0.69%. The Australian Govt ten year benchmark rate is up +1 bp at 1.23%. The China Govt ten year bond is up +7 bps at 2.90%. The New Zealand Govt ten year however is up +9 bps to 1.72% and now above the earlier RBNZ fix of 1.71% (+2 bps). The US Govt ten year is now at 1.35% and up by another +4 bps today with the robust US payrolls data raising expectations the US Fed will taper sooner.
NZ DOLLAR BACK UP A LITTLE
The Kiwi dollar has bounced back today after yesterday's fall, and now at 70.1 USc as the commodity mood improves. Against the Aussie we are little-changed at 95.4 AUc. Against the euro we are firmer at 59.8 euro cents. The TWI-5 is now a touch higher at 73.3, still right in the middle of the ten month 72-74 range.
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BITCOIN DIPS TOO
The bitcoin price is now at US$45,442 and down -1.1 from this time yesterday. Volatility in the past 24 hours has been low at just over +/- 1.7%.
This soil moisture chart is animated here.
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