Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
We updated the rates for Midland Mortgage Trust in our database today.
TERM DEPOSIT RATE CHANGES
Heartland Bank is shifting its 3 month 'special' (was 1.00% pa) to a 5 month term with the new rate to be 1.25% pa, effective tomorrow. Thei nine month rate also rises to 1.50% pa.
MORE REACHING INTO THE FLP
Yesterday it was reported (D12) that banks took $1 bln more in the RBNZ Funding for Lending program. And today, another $500 mln was revealed. That takes the amount disbursed to $5.2 bln or the $28 bln allocated back in December 2020. ASB has confirmed they took $500 mln. We are still awaiting confirmation of who the other $1 bln went to. (It wasn't ANZ or BNZ or Kiwibank. So that only leaves Westpac as large enough to take $1 bln. But they "won't confirm or deny".)
SUDDEN YANG
After pushing the boundaries on the up side just ten days ago, wholesale electricity prices are now unusually low at just $86.30/MWhr. The hydro lakes are full (for this time of year) and more importantly, demand has drooped sharply in lockdown.
YIELDS BID UP
There were 102 bids made today for $550 mln in NZ Government bonds at tender in four tranches. 77 bids were accepted. The May 2026 $200 mln went for a yield of 1.29% pa, a rise from 1.24% two weeks ago. The May 2028 $200 mln went for a yield of 1.48% pa, up from 1.45% two weeks ago. The $100 mln April 2033 went for a yield of 1.83%, up from 1.76%. And the inflation adjusted linker (September 2040) went for 0.85% plus CPI, up from the previous 0.67% plus CPI.
SURPRISE FALL
Australia's jobless rate fell to 4.6% in July and a 12 year low and there was a small employment rise. Both these were unexpected. But it was driven by part-time employment, so it is not really that great. And increasing numbers of Aussies are leaving the labour force in 2021, which isn't great either. (The New Zealand jobless rate was 4.0% as at June. We don't do monthly labour force stats.)
ESCALATIONS
The tensions between China and Taiwan are escalating.
PRESSURE INTENSE IN BOTH NZ & AUSTRALIA
There were another 682 new community cases in NSW today with another 511 not assigned to known clusters, so they are out of control. It has spread into regional NSW extensively. Victoria is reporting another 57 new cases today, so it is starting to surge there too and their lockdown is extended for another two weeks, this time with a curfew. Queensland is reporting 0 new cases in a bright spot. NT has cases now. Overall in Australia, more than 28% of eligible Aussies are fully vaccinated, plus 22% have now had one shot so far. There were 3 new cases in New Zealand at the border, and eleven more in the community. New Zealand reports 25% of its eligible population having been fully vaccinated with a further 16% having had one jab so far.
GOLD SOFTER
Compared to where we were at this time yesterday, the gold price is down sharply at US$1780 in early Asian trade and a fall of -US$12 from then.
EQUITIES ALL IN THE RED, EXCEPT NZ
At the close on Wall Street, the S&P500 dived from being down -0.1% late in the session to close down -1.1% in a sudden drop. A slew of earnings reports released today from companies exposed to the American retail trade weren't great. Asian markets have opened weaker as well with Tokyo opening down -0.7%, Hong Kong down -1.5% and Shanghai opening down -1.0% too. The ASX200 is down -0.6%. But the NZX50 Capital Index is the outlier, surging +1.5% in late trade. Big movers include Chorus (+13%), Skellerup (+5%), Meridian (+3.7%), Precinct (+2.8%), A2Milk (+2.6%), Fletcher (+2.6%) and Mainfreight (+2.6%). There were many others.
SWAP & BONDS RATES UNCERTAINTY EXTENDS AND STEEPEN FAST
We don't have today's closing swap rates yet. They are probably falling across the board with the 1yr down -5 bps, the two year down -3 bps and the ten year down -2 bps. We will update this when the end-of-day data comes through. The 90 day bank bill rate has slumped by another -12 bps to 0.43% on top of yesterday's -12 bps drop. The Australian Govt ten year benchmark rate is down -2 bps at 1.12%. The China Govt ten year bond is down a sharpish -4 bps at 2.86%. But the New Zealand Govt ten year is down only -1 bp to 1.65% and now below the earlier RBNZ fix of 1.68% (+7 bps). The US Govt ten year is now at 1.26% and slightly softer (-1 bp).
NZ DOLLAR MUCH SOFTER
The Kiwi dollar is now at 68.6 USc and its lowest since November 2020. Against the Aussie we are also softer at 95.1 AUc. Against the euro we are down at 58.7 euro cents. The TWI-5 is now at 72 and right at the bottom of the range we have been in over the past eleven months.
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BITCOIN LOWER AGAIN
The bitcoin price is now at US$44,701 and down a very minor -0.2% from where we were this time yesterday. Volatility in the past 24 hours has been low at +/- 1.7%.
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39 Comments
What happened today?
Our nurses who worked through the last lockdown while most sat on the a#ses were at work after they called off their strike.
They head off to work again with even worse conditions and many having to dress up in covid kits and the discomfort that involves..... and Bloomfield gives a reluctant thanks.
About time the media stopped fawning all over Bloomfield and Jacinda at these media conferences and started giving some voice to support our nurses and med professionals..
Meanwhile the covid handout extravaganza about to go full throttle again. Has any one asked W&I what adjustments they have made since the last damming audit report? For some there is cash a plenty.
https://www.nzherald.co.nz/business/covid-19-coronavirus-auditor-genera…
I find PM Ardern insufferable to listen to - I couldn't watch the full 'daily update' unless I was paid to.
It would be nice if interest.co.nz posted a bullet-point NZ COVID Summary of everything important/required in the style of "What happened today".
I doubt PM Ardern will ever just-get-to-the-point and stop grandstanding at these standups
The national news cycle is getting a bit wearing at the moment. Particularly as so much of it is actually local, not national news, like how long queues are for testing in one geographical location or how one school is advising of a case.
If anything reporting has got less factual and more sensationalist over time. What people need do in this phase is get vaccinated and then move on with life.
I understand the COVID situation. I understand keeping the OCR at 0.25. Delta or not we have been here for almost 2 years now. COVID-19 - we are in 2021. I still can’t believe with this always as an excuse, she is not held to account on housing. Orr states that with his monetary policy changes NZ will see in excess of 60% house price growth and then a 3% price fall for 3 years. Why isn’t she being questioned about what’s next with housing? Why isn’t LVR at 60%, why isn’t DTI implemented? Why is bright line test not 20 years? Why are other expenses still tax deductible for investors? She has been saying that house prices were unsustainable for the past 6 years and it’s still going up and up and up. What is she going to do? Utter useless and shameless.
I recognise the style of her presentation, even if you don't - it's tailored to the fact that 50% of people have an IQ below 100, and she wants to take everyone with her, when she gives explanations. I have considered that your dislike is due to you being a high powered super intelligent type - but it's much more likely to be your ideological blinkers.
@oldbloke1 I've never watched/streamed one of these standups - I don't even own a TV. If I lived in Auckland I might feel differently about streaming the daily standup (or whatever it's called).
I believe everyone has vast potential, especially if they have a spiritual connection.
I accept it is important to front when locking the whole country down. You're right, it is important to clearly communicate the situation/requirements to as many people as possible - it probably invokes a sense of community for many too.
IMO PM Ardern is ALL Hat and NO Cattle. I don't want to criticize and point out all the failures, waffling, virtue-signaling, misdirection, lack-of-ideas, soft-ball-questions and avoided-questions.
When leaders aren't willing to acknowledge problems and/or engage meaningfully, they become insufferable to listen to. I'll continue to get my news from where I please.
Do you think teachers would have success teaching that way - when teaching the less talented learners amongst us?
We get an uninterrupted stream of verbiage for over an hour.
The presentation style, which is unchanged from the beginning of Covid, is a terrible way to convey actual, factual, information.
Compounded by the failures when they have tried to put information in a graphical form.
I think the conclusion that the PR team run the show is absolutely fair and valid.
Any idea why? Perhaps a lot of bored people at home playing with their Sharesies accounts? They must be expert investors, bucking the international trend and also able to understand how lockdowns are so positive for the economy. And hey, what's the point of buying the dip? Just buy the top!
People have been 'buying the top' in NZ's rock star companies for years. We've owned shares in many of them for more than 15 years. They are the engine room of our economy. If these companies tank, the whole economy will collapse. Smart investors like to invest in smart management teams.
I dunno man. My first instinct was China has worked out how to pull the middle finger to Australia. Not through wine tariffs, or similar, but really targeted at the engine room of the Aussie Economy. If it was for environmental reasons, it seems to me that they're pumping coal for electricity hand over fist on the left hand, while slowing iron ore on the right. It doesn't pass my sniff test that it's for their climate targets.
https://www.nzherald.co.nz/business/reserve-bank-expects-house-prices-t…
Headline in NZherald that RBNZ expects house price to fall....does not say that from end of next year and till that time will rise further by 10%
Even now is expecting just like were expecting in May that it will flatten.......SO are wrong and this expectation is only because Mr Orr does not want to act and is only to differ / push under the carpet for now.
STILL NO ACTION. WHAT HAPPENED TO LVR AND DTI, HIDE BEHIND DELTA VIRUS.
Being in a country with full blown cases of covid. We have another delta case detected at our block. The bloke didn't self quarantine and was going here and there. Sigh...
Anyhow I'm don't really believe NZ or anywhere can have a zero elimination strategy as delta is so contagious. The best thing I believe is get your Jab, keep fit, wash your hands, have your mask on when out in crowded places. Lockdown's won't work forever and we will all have just have to live with covid.
Here the new policy is once you are fully vaccinated, we will be able to eat out, travel interstate. What else to do? Otherwise the economy will tank. Depression is already in full swing with the young and the old because of the lockdowns. Suicides' are at there all time high. Very sad.
Can anyone tell me the reason why NZ hasn't got more people vaccinated? I heard it was supply issues but every country around me said the same thing but have way more people vaccinated. Maybe there is another reason for NZ low vaccination rate?
https://businessdesk.co.nz/article/finance/adrian-orr-says-house-prices…
He expects house to fall so everything is now based on hope, fail to understand why is he so afraid to take action against speculative demand and wishing God to help him.
Funny he can act and control the ponzi but question is does he wants to ?
Does anyone have experience of using a local multi-currency account vs overseas funds being directly credited into NZD? Which is better (eg. USD deposited directly into an NZD acct, or first parking it in a USD acct, and then within the same banking moving it to NZD - at a crap rate).
Sorry if this isn't the forum to ask such a question.
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