Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
None to report here today. All eyes are on Wednesday's RBNZ MPS now.
TERM DEPOSIT RATE CHANGES
None here either.
NZX FLAT
Last week's NZX50 ended flat in terms of overall capitalisation (down a very minor -0.06% from the week before), meaning it is up +0.7% in a month and up +9.0% in a year. The NZX50 capitalisation is now $131.0 bln or 38.7% of GDP. That is marginally higher than the year-ago level of 37.5% of GDP. (For perspective, the S&P500 is 18.4% of US GDP with a much broader range of listed equities not in the peak indexes.) Over the coming week we will update eight profiles with recently released financial results. Over the prior week, Scales (SCL) fell two places to #42. Auckland Airport (AIA) rose one place to #2 in the NZX50 (displacing Spark (SPK).
A2 MILK SHAKES
Meanwhile, A2 Milk shares (ATM, #10) are up +11% in a flurry today on Aussie rumours that Nestle is sniffing for a purchase. Clearly investors are animated by the prospect, but the source is the The Australian who have a dubious record with these types of 'scoops'.
PSI EXPANSIONARY
New Zealand's services sector remained in expansion mode for the fifth consecutive month, according to the BNZ - BusinessNZ Performance of Services Index (PSI). The PSI for July was 57.9 and while this was down from 58.4 in June, it was still well above the overall average of 53.9 for the survey. The jobs sub-index remains strong. The surveyed reported issues on the supply side of shipping delays, freight cost escalation, and raw material shortages. Demand for services remains very strong, especially in wholesale sectors while hospitality is weak and slipping. But when combined with compromised supply this "is a tinderbox for inflation", says BNZ analysts
RENTS TOP OUT IN MAIN CENTRES
Rents held nationally to $500/week in June, soft in the main centers of Auckland, Wellington and Christchurch, but firm in a number of provincial centers, according to the latest MBIE data available today.
HOME LOAN BORROWERS NOT WORRIED
The RBNZ survey of households finds expectations of higher house prices have actually increased, while mortgage holders are far less worried about meeting payments than renters
PRESSURE IN AUSTRALIA INTENSIFIES
There were another 478 new community cases in NSW today with another 337 not assigned to known clusters, so they are still not getting on top of their outbreak. It has spread into regional NSW now, and now NSW is reporting more than Fiji is reporting, the first time in a long time. Victoria is reporting another 22 new cases today, a growing number and their lockdown is extended for another two weeks, this time with a curfew. Queensland is reporting 1 new case. NT has cases now. Overall in Australia, more than 26% of eligible Aussies are fully vaccinated, plus 22% have now had one shot so far. There were five new cases in New Zealand at the border, three as arrivals from Fiji, but still none in the community. New Zealand reports 23% of its eligible population having been fully vaccinated with a further 16% having had one jab so far.
GOLD FIRM
Compared to where we were at the close of trade in New York on Saturday, the gold price is up at US$1781 in early Asian trade and a rise of +US$1 from then.
EQUITIES GENERALLY WEAKER
The NZX50 Capital Index has started the week up +0.2% in late trade. The ASX200 is down -0.4% however in early afternoon trade. Tokyo has opened down a sharp -1.9%, Hong Hong has opened down -0.4%, but Shanghai has opened up +0.4%. The S&P500 futures index is down -0.2%.
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. Update: They rose an unexpected +3 or +4 bps at the short end today. They are probably little-changed. The 90 day bank bill rate is unchanged at 0.67%. The Australian Govt ten year benchmark rate is down -2 bps at 1.17%. The China Govt ten year bond is little-changed at 2.90%. The New Zealand Govt ten year is down -1 bp to 1.73% but still above the earlier RBNZ fix of 1.70% (-1 bp). The US Govt ten year is now at 1.27% and easing as the day progresses.
NZ DOLLAR SOFTENS SLIGHTLY
The Kiwi dollar is still at 70.4 USc where it opened this morning. Against the Aussie we are firm at 95.7 AUc. Against the euro we are unchanged at 59.7 euro cents. The TWI-5 is now a touch firmer at 73.4, still in the middle of the ten month 72-74 range.
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BITCOIN UP
The bitcoin price is now at US$47,552 and up +3.3% from where we opened this morning. Volatility in the past 24 hours has been moderate at +/- 2.5%.
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18 Comments
"A2 Milk shares up 11%."
Buy on the rumour and sell on the fact. Looks like there's going to be lots of money to be made through the pump and dump play. I think timing is everything with this one.
Hope someone could repackage rents into a salable bond or instrument that are publicly traded, it'll benefit everyone.
The figure for the value of the S&P 500 as a ratio of US GDP doesn't seem right. The value of the S&P is about $31 trillion. US GDP is about 23 trilllion. This means the sharemarket is about 130% of GDP, not the 18% you refer to. My recollection (which could be faulty) is that NZ has a very low value of listed companies relative to GDP compared to other countries.
But, as normal, thanks for an interesting read.
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