Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
HSBC trimmed its 3yr rate back under 3%. More here. The Cooperative Bank has raised all its fixed rates
TERM DEPOSIT RATE CHANGES
HSBC also raised most term deposit rates today. General Finance also raised their offer rates. And the Cooperative Bank has also raised all its TD rates.
KIWIBANK ON ITS KNEES AGAIN
The DDoS attack on Kiwibank spilled over to affect customers again today. ANZ is also reported as being targeted. Even though these institutions are clearly victims of malicious behaviour, customers can reasonably expect that banks at least have the resources and wherewithal to keep them from being affected. Still, knowing in advance what new criminal strategies will be employed is probably not reasonable. It is tough on everyone.
'ROOM FOR OPTIMISM'
BNZ is reporting that card spending is beginning to bounce back from the previous week, and that a "bounce back from the lockdown is underway". Card spending is up +12% on last week, but still now sitting at -37% below pre-lockdown levels.
GOOD GAINS
Dairy prices rose +4.0% in USD terms at auction today (+1.7% in NZD terms). Only WMP prices held back an even better result. For future pricing, a lot now depends on how the New Zealand spring milk flows are perceived in the market. BNZ's analyst raised his milk pick to $8.30/kgMS for the new season - which is now the highest among the economists.
RECORD LOWS
The RBNZ reported today (B6) the lowest yields on loans to customers by banks since it started reporting this metric. Those yields are 3.14% for business loans, 2.79% for fixed mortgages, and 3.67% for floating mortgages. None have ever been lower.
RESERVES BOUNCE BACK
New Zealand's official reserves (E1, RBNZ plus Treasury) took a sharp tumble from about NZ$33 bln in April 2020 to just NZ$17.6 bln in July 2021. But they bpunced back partly in August to NZ$22.6 bln.
HOUSES MAKE YOU RICH
The RBA monthly chart pack release today shows net household wealth rising fast on fast-rising house prices - and that mortgage liabilities as a % of household income are falling. It also reveals sharply lower business investment.
LOOKING BRIGHTER
Japan reported a better Q2 GDP outcome in its latest update, up +1.9% (real) rather than the initial +1.3% originally reported. That was better than analysts had expected. And the Q1 retreat was revised to a worse level however.
PANDEMIC PRESSURE INTENSE BUT EASING A LITTLE
In Australia, there were another 1480 new community cases in NSW today with another 1379 not assigned to known clusters, so they remain completely out of control. They now have 25,690 locally acquired cases. Victoria is reporting another 221 new cases today, so it is still bad there too. Queensland is still reporting no new cases. The ACT has 20 new cases. Overall in Australia, more than 39% of eligible Aussies are fully vaccinated, plus 25% have now had one shot so far. There was one new cases in New Zealand at the border, and 15 more in the community, all in Auckland and all but 5 within existing isolated bubbles. So far, 32% of eligible Kiwis now have both shots, another 30% the initial shot.
GOLD DROPS
Compared to where we were yesterday, the gold price is -US$27 lower at US$1799/oz in early Asian trade. Earlier it had closed in New York at US$1794, and earlier again in London at US$1802/oz.
EQUITIES MIXED
The NZX50 is down -0.8% in late trade today. The ASX200 is down -0.2% in early afternoon trade and paring back some earlier declines. Tokyo has opened strongly again, up another +0.8% in early trade and rising. Hong Kong is up +0.4%. Shanghai has opened up +0.1% in their early trade. The S&P500 ended its first post-holiday-weekend New York session down -0.3%.
SWAP & BONDS RATES FIRM AGAIN
We don't have today's closing swap rates yet. We expect them to still show another small rise, especially at the long end. We will update this if there are significant changes when the end-of-day data comes through. The 90 day bank bill rate is unchanged at 0.52%. The Australian Govt ten year benchmark rate is now at 1.29% and up +1 bp from this time yesterday. The China Govt 10yr is now at 2.88% and up +2 bps. The New Zealand Govt 10 year rate is now at 1.95%, up another +2 bps, and above the earlier RBNZ fix for that rate at 1.94% (+3 bps). The market conviction that the RBNZ will hike rates in 2021 remains. The US Govt ten year is now at 1.37% and it has gained +3 bps today.
NZ DOLLAR STAYS FIRM
The Kiwi dollar is now at 71.1 USc, and slightly lower from where we were this time yesterday. Against the Aussie we are firmish at 96.1 AUc. Against the euro we are little-changed at 60 euro cents. The TWI-5 is just over 74 and just above the 72-74 range we have been in for most of the past ten months.
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BITCOIN DROPS HARD
The bitcoin price is now at US$47,233 and down a very sharp -10.3% from where we were this time yesterday. Volatility in the past 24 hours has been extreme at +/- 11.6%.
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19 Comments
Inquiry into the current and future nature, impact, and risks of cryptocurrencies – hearing of evidence to Finance and Expenditure Committee. CEO of NZ Funds sees crypto becoming part of NZers' savings plans. Mind you, he makes some howling claims like "after a crypto is created, it's put on the internet." Most of the questions from the politicians were predictable. Doesn't seem like anyone was particularly interested and I guess this is just a start.
New Zealand's official reserves (E1, RBNZ plus Treasury) took a sharp tumble from about NZ$33 bln in April 2020 to just NZ$17.6 bln in July 2021. But they bpunced back partly in August to NZ$22.6 bln.
The fall starting in April 20 was caused by a sharp drop in the "FX swaps and basis swaps" category from $26.805 bln as of Mar 20 to $8.981 bln as of Jul 21.
A long time ago I was told the RBNZ engaged in FX swaps with our banks' foreign branches (London) to fund the NZD settlement cash balance. Thus creating foreign reserves (USD?) for NZ. The advent of QE squashed that necessity.
Time to ignore the daily case numbers?
https://www.smh.com.au/national/nsw/delta-usurped-the-one-decision-aust…
Cyber attacks. It's a mean world and we need to get real. These attacks are going to get worse with real harm. Lets not blame the victims and lets attack the criminals. They messed Waikato Hospital even.
Fly in the 757s with SAS hit squad to take them out. "To encourage the rest"
Growing moans about the housing market this week. Even real estate agents and banks seem concerned - albeit only at the lack of listings and declining margins respectively.
Labour won't touch this hot potato with a 10-foot-pole and the word is out they no longer want FHBs in the market at these prices. Labour also want house prices to increase.
Labour have effectively signaled their desire to ingrain a feudal model of land-ownership.
I'd suggest unlanded readers think twice before having home-ownership as a goal, at least in NZ going forward.
The B6 table looks fairly straightforward, I'm not sure how I am meant to reply, other than at present, collectively Kiwis on average are paying less interest on their borrowings and although mortgage debt is increasing, are paying less interest in total, albeit this may change modestly in the coming year.
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