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A review of things you need to know before you go home on Monday. Some TD rate rises, many more houses being built, commodity prices ease, ANZ seeks $250 mln plus, swaps rise, NZ stays firm, & more

A review of things you need to know before you go home on Monday. Some TD rate rises, many more houses being built, commodity prices ease, ANZ seeks $250 mln plus, swaps rise, NZ stays firm, & more

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
None to report today.

TERM DEPOSIT RATE CHANGES
Kiwibank has raised all its term deposit rates today, but none are at special levels compared with their main rivals. WBS has also raised rates.

BUILDING HOUSES, HOUSES, HOUSES
Residential construction is going gangbusters but non-residential building work is patchy. A record $7.2 bln of new building work commenced in the June quarter. At this level it will be slightly positive to Q2 GDP which will be released on Thursday, September16 - ten days from now.

BUILDING HOUSES CAN MAKE YOU VERY RICH
The owner of Winton, a large NZ and Australian property development group controlled by Chris Meehan of Queenstown, has reportedly paid AU$18.7 mln for a Palm Beach trophy house in Sydney without visiting it.

HIGH BUT OFF ITS TOP
The ANZ World Commodity Price Index has continued to ease, falling -1.6% in August following a similar decrease in July. Dairy and forestry led the index down, offsetting stronger prices from other sectors.

COMPLAINTS ABOUT BANKS RISE 6%
Customer complaints about their banks rose +6% in the 2020-21 year, the Banking Ombudsman says, although dispute volumes fell -3%. Banking Ombudsman Nicola Sladden says the rise is likely due to customers becoming more willing to seek help when they have problems with their bank. A total of 3,149 complaints were received during the year, plus 1,524 enquiries and 140 complaints escalated to disputes. The most common complaints were about bank accounts and lending (home loans), credit cards, overdrafts, personal and business loans.

UDC EYES ABS BORROWING DEAL
UDC Finance, now owned by Japan's Shinsei Bank, has hired ANZ, BNZ and Westpac as joint lead managers of a potential auto asset backed security (ABS) transaction as a source of funding.

LIVESTOCK PRICES ARE BACK
For readers who utilised our extensive livestock database resource, please note that this is now back (better) and reporting normally. (It's in the RH sidebar of our Rural section for desktop users, and via the menu in our mobile version. We apologise for the temporary outage.

ANZ WANTS SOME TOO
ANZ Bank New Zealand now has an offer of up to NZ$250 mln (with the ability to accept unlimited oversubscriptions at ANZ’s discretion) of ten year unsecured subordinated notes. They are rated A- by S&P. The interest rate for the first five years will be the five year swap plus an indicative margin of between 1.25% - 1.45% pa. The Bank will be able to repay early, but holders won't have any right to early redemption. For the second five years, the rate will be the 90 day bank bill rate plus the issue margin. If the 90 day bank bill rate goes negative more than the issue margin, the rate will be zero percent; it won't go negative. These Notes are not guaranteed by the ANZ parent. A book build process is underway.

A GOOD RUN
The NZX had a good week last week. Capitalisation of the NZX50 rose by +1.7% over the week to reach $136 bln and 69.2% of the total market. That is up +3.8% in a month and up +13.2% in a year. The drive higher was led by the energy sector. But the rises were broad-based with Sky TV (SKT, #50) jumping +23%, and Sanford up +11% (SAN, #46).

A VERY BIG DEAL
Its going to cost a lot to decarbonise the planet, at least US$30 tln by some estimates. And where there is that much money around, there will be huge investment opportunities. Some say "its the next internet". It will be a massive, decades-long trend. The smart money (Blackrock, etc) is already in. Carbon producers (Russia, Australia, South America) may see significant disruption. Done well, food producers should be ok.

PANDEMIC PRESSURE INTENSE BUT EASING A LITTLE
In Australia, there were another 1281 new community cases in NSW today with another 1267 not assigned to known clusters, so they remain completely out of control. They now have 24,805 locally acquired cases. Victoria is reporting another 246 new cases today, so it is still bad there too. Queensland is now reporting one new case. The ACT has 26 new cases. Overall in Australia, more than 38% of eligible Aussies are fully vaccinated, plus 25% have now had one shot so far. There were three new cases in New Zealand at the border, and 20 more in the community, all in Auckland and most within existing isolated bubbles. So far, 30% of eligible Kiwis now have both shots, another 29% the initial shot.

GOLD STABLE
Compared to where we were yesterday, the gold price is slightly lower at US$1827/oz in early Asian trade, after finishing at a similar level in New York at the end of last week.

EQUITIES MIXED
The NZX50 is down -0.3% in late trade today. The ASX200 is down -0.8% in early afternoon trade. Tokyo has opened strongly, up +1.7% in early trade. Hong Kong is up +0.5%. Shanghai has opened up +0.4% in their early trade. Wall Street is closed and will be until Wednesday NZT. The S&P500 futures however point to little change.

SWAP & BONDS RATES RISE
We don't have today's closing swap rates yet. But markets are feeling a bit better around the local delta case numbers. The one year is up +2 bps so far, the five and ten year rates are up nearly +4 bps. We will update this if there are significant changes when the end-of-day data comes through. The 90 day bank bill rate is up +2 bps at 0.50%. The Australian Govt ten year benchmark rate is now at 1.26% and unchanged from Saturday. The China Govt 10yr is now at 2.85% and also unchanged. The New Zealand Govt 10 year rate is now at 1.90%, up a strong +5 bps considering no-one else is moving today, and above the earlier RBNZ fix for that rate at 1.88% (+6 bps). The US Govt ten year is now at 1.33% where it was when we opened this morning. Don't forget the US (and Canada) are on a long-weekend holiday.

NZ DOLLAR FIRM
The Kiwi dollar is now at 71.4 USc, and unchanged from where we opened this morning. Against the Aussie we are firm at 96 AUc even if marginally lower. Against the euro we are also firm at 60.2 euro cents. The TWI-5 is up at 74.2 and above the 72-74 range we have been in for most of the past ten months.


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BITCOIN FIRMS
The bitcoin price is now at US$51,824 and up +3.0% from where we opened this morning. Volatility in the past 24 hours has been moderate at +/- 2.5%.

This soil moisture chart is animated here.

Keep ahead of upcoming events by following our Economic Calendar here ».

Daily exchange rates

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Daily benchmark rate
Source: RBNZ
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Source: RBNZ
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Source: RBNZ
End of day UTC
Source: CoinDesk

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12 Comments

Lots of houses being built, but the important number is the amount of houses being finished. I wonder how long the lead time is now with all the bottle necks with materials?

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I am wondering how good some of these houses will be. There is one half built nearby which has some sort of laminated engineered (glued) 2nd level floor joists. Weathering. ie They look bleached, with small splits at its ends. And they look to be warped as well. In the month or so that it has been like that its been alternately cold and wet and hot and sunny. Personally I wouldn't dream of buying that one. Not that I would anyway, buying now is madness in my view.

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Spot On. I'm in a town in North Canterbury. 10 houses are under construction near me. Hardly anything has moved in the last 4-6 weeks. A combination of supplies, and lockdown.

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The delays and cost hikes might ruin a few people.

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Two milestones  this quarter ,New Zealand mortgage debt /  GDP should pass 100 percent for the first time, and in terms of "common prosperity", the total value of   housing should for the first time exceed 5 times that of happiness /team NZ GDP. ( Ireland topped out at 3.5 times back in the day). At least housing is not the economy

Sydney is cheap in comparison (and may get cheaper) to Auckland, as Corelogic puts current median only at A$1039541

As of today, TWI (17) at 75.42, and RBNZ working on 74.4 perhaps the currency is going to do the heavy lifting, if RBNZ does indeed follow thru with OCR rises. The timing may see a repeat of NZD/USD 2010. Parity with the cousin certainly looks expensive  as iron ore takes out  a new  12 month low.

A2 should  be  a little more curdled in the coming weeks, as its due for removal from the S&P ASX 50 and all those managed funds.

Canadians, a recent study puts fifty percent of them $200 away from being unable to meet their monthly bills/debt obligations. Expensive housing in Canada has drawbacks

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Canadians, a recent study puts fifty percent of them $200 away from being unable to meet their monthly bills/debt obligations. Expensive housing in Canada has drawbacks

Indeed:

Just days after Evergrande's bonds hit new all time lows after "China's Lehman" warned that the company with over $300 billion in debt and which many view as systematically important for China, the selloff accelerated further following news of a mini bank run as i) several key creditors demand immediate repayment and ii) as Evergrande bonds are no longer accepted as collateral. Link

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Its going to cost a lot to decarbonise the planet, at least US$30 tln by some estimates. And where there is that much money around, there will be huge investment opportunities. Some say "its the next internet". It will be a massive, decades-long trend. The smart money (Blackrock, etc) is already in. Carbon producers (Russia, Australia, South America) may see significant disruption. Done well, food producers should be ok.

The Iraqi government and French oil and gas company TotalEnergies have signed a $27 billion investment deal to develop the country's oil and gas fields, the office of Iraqi Prime Minister Mustafa Kadhimi said on Sunday. Link

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Sounds like China is in a bit of trouble.

What do our perennial CCP-pumpers X and AudaXes think?

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The Morrison government is needlessly and irresponsibly pushing Australia towards a headlong confrontation with China, and doing it, in the main, to be seen in Washington as America’s fawning acolyte. Link

I fervently wish for NZ to avoid this claim when it involves a country the size and power of China.

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More social credit for you comrade, congrats!!!!

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Kiwibank may have raised its rates today but nobody can access them.

Their website and internet banking has been down all day. Looks like they could have been hacked. People are complaining on the Kiwibank facebook page that their Kiwibank cards are being declined and ATMs are gobbling up their cards. 2000 comments on the page lots from unhappy punters.

Looks like their system has covid.

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I’ve a feeling Bitcoin is about to go on an astounding run. New ATH before x-mas is my call. 

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