Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
None here today.
TERM DEPOSIT RATE CHANGES
ASB has raised most of its term deposit rates, except its one and six month terms. After these changes it is a mid-pack offering.
'IMPROVED PERFORMANCE'
Kiwibank has a very good second half to June 2021, boosting its tax-paid profit to $126 mln (up +$69 mln from 2020) as net interest income rose +16%, lending grew +13.4% and the bank wrote-back $31 mln of Covid-19 loan provisioning.
FLYING INTO THE UNKNOWN
Air New Zealand (AIR, #34) cited uncertainty around the current lockdown as it reported pre-tax losses of -$411 mln for the financial year to June 2021. That was down from a loss of -$628 mln on the same basis in 2020.
A HARD LANDING
a2 Milk Company (ATM, #10) remains 'confident in the underlying fundamentals' of its business after seeing profits slashed by nearly 80% in the latest financial year to $81 mln, down from $386 mln the previous year.
YIELDS SLIP
$1.15 bln was bid at today's NZGB bond tender for $500 mln in three tranches. Yields slipped but more bidders won today than recently, 62 of 101. The May 2024 $200 mln turned in an average yield of 1.12% pa, down from 1.17% the last time. The May 2031 $200 mln bond had an average yield of 1.65% and down from 1.71%. Finally, the $100 mln April 2037 bond yielded 2.16% pa, very similar to the prior equivalent tender.
PANDEMIC PRESSURE STAYS INTENSE
There were another 1029 new community cases in NSW today with another 844 not assigned to known clusters, so they are completely out of control. They now have 13,101 locally acquired cases all in their leaky pseudo lockdown. Their policymakers have surrended after making a poor effort. Victoria is reporting another 80 new cases today, so it is still bad there too and their lockdown is extended, also with a curfew. Queensland is now reporting two new cases. It has instituted a two week ban on interstate arrivals, throwing many things into confusion, including scheduled sports. ACT has14 new cases. Overall in Australia, more than 32% of eligible Aussies are fully vaccinated, plus 22% have now had one shot so far. There was only 1 new case in New Zealand at the border, and 68 more in the community. So far, 25% of eligible Kiwis now have both shots, another 20% the initial shot.
GOLD SOFTER
Compared to where we were this time yesterday, the gold price is down -US$13 at US$1788 in early Asian trade. And that is down another -US$3 from the closing New York price and down another -US$7 from the afternoon London fix.
EQUITIES PULL BACK FURTHER
In New York, the S&P500 closed its Wednesday session up another +0.2%. Today, Tokyo is slipping after starting out with good gains. Hong Kong is down another -0.5% and Shanghai down another -0.6% in their early trade. The ASX200 is down -0.5 in afternoon trade, and the NZX50 Capital Index is also down-0.5% near the end of trading. ATM, NZME, MCY and AIR are the big decliners today.
SWAP & BONDS RATES DIP
We don't have today's closing swap rates yet. They have probably dipped a little. We will update this if there are significant changes when the end-of-day data comes through. The 90 day bank bill rate is down -1 bp at 0.45%. The Australian Govt ten year benchmark rate is up another +1 bp from this time yesterday at 1.18%. The China Govt ten year bond is back up +2 bps at 2.88%. The New Zealand Govt ten year is up +3 bps at 1.68% and the same as the earlier RBNZ fix of 1.68% (-1 bp). The US Govt ten year is now at 1.34% and up +5 bps from this time yesterday.
NZ DOLLAR STAYS FIRM
The Kiwi dollar is now at 69.6 USc, up another +20 bps from this time yesterday. Against the Aussie we are also firmer at 95.9 AUc. Against the euro we are firm too at 59.2 euro cents. The TWI-5 is now at 72.9 and back in the middle of the 72-74 range we have been in for ten months.
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BITCOIN HOLDS
The bitcoin price is now at US$48,747 and up +1.1% from this time yesterday. Volatility in the past 24 hours has been moderate at +/- 2.4%.
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12 Comments
Compared to where we were this time yesterday, the gold price is down -US$13 at US$1788 in early Asian trade. And that is down another -US$3 from the closing New York price and down another -US$7 from the afternoon London fix.
10 year TIPS (real yields) at August '21 highs.
Let's get this out there - scum
https://www.nzherald.co.nz/nz/covid-19-coronavirus-delta-outbreak-polic…
Christchurch Airport latest profit.
Of that $38m profit, $7.5m was an operating profit while the rest was down to the increased value of investment properties owned by the airport.
Need to keep the bubble afloat at all costs lockdowns are a great tool till spring buying surge hits.
Interesting article from Michael Pettis, HT Michael Reddell, on the Bezzle. https://carnegieendowment.org/chinafinancialmarkets/85179
Hard to dodge the notion that Godzone's housing prices are our local variant of the Bezzle, goosing wealth effect, debt creation and of course RE commissions. The main point of the Pettis article is that bezzles eventually go into reverse.....
The Michael Reddell article is here: https://croakingcassandra.com/2021/08/25/mpc-members-speaking/
Also highly recommended.
Yes, the 'bezzle' is a very nice way of describing inflation-led and asset bubble wealth effects, which in the long run are built on a pack of cards. Within the NZ economy there is currently very little genuine investment that will support an increased GDP. Apparently the term goes back to JK Galbraith who wrote several fascinating books on how economies operate.
KeithW
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