Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
SBS Bank have added +10 bps to their fixed rates for terms of 1 year and longer.
TERM DEPOSIT RATE CHANGES
None here today.
THE ATTACKS CONTINUE
ANZ is still struggling with DDoS outages resulting in service that can be variable. If you are still having issues at other banks online access today, please note them in the comment section below.
HOMING KIWIS
Arrivals and departures across the New Zealand border fell in July 2021 from the previous two months, due to ongoing interruptions to two-way quarantine-free travel with Australia, Stats NZ said. It is not going to be any better when the August or September data is released either. Inside today's data was evidence the return home by citizens was picking up again in July.
LOCKED-DOWN SPENDING
Unsurprisingly, retail card spending in New Zealand fell almost -20% in August as the country went into lockdown in the second half of the month. The expectation is that this will recover in a rush when the all-clear is given.
20 CENTS LOWER
Yesterday we reported that BNZ analysts had raised their estimate of the 2021-2022 milk season payout to $8.30/kgMS. Not everyone thinks it will be as rosy. Today Rabobank analysts cut their estimate for the same period to $7.80/kgMS. That is a big difference between the two analysts. A summary of all major analyst picks is at the bottom of this page.
LICENSE EXTENSIONS
As a result of the Delta outbreak, driver licences, Warrants of Fitness (WoFs), Certificates of Fitness (CoFs), vehicle licences (‘regos’) and licence endorsements that expired on or after 21 July 2021 will be valid until 30 November 2021.
RSE QUARATINE-FREE TRAVEL STARTING AGAIN
The first stage of one-way quarantine-free travel with Samoa, Tonga and Vanuatu will commence in October, initially for RSE workers from those countries.
HOT DEMAND FOR UNSECURED, SUBORDINATED PAPER
ANZ Bank New Zealand was in the market for "up to NZ$250 mln" (with the ability to accept unlimited oversubscriptions at ANZ’s discretion) of ten year unsecured subordinated notes. Demand was strong, and they accepted $600 mln. The interest rate for the first five years will be the five year swap plus an indicative margin of 1.25% pa. so it is 3.00%.
EXISTENTIAL CONCERNS. WHAT GOES AROUND ...
In Australia, the auditor of James Packer-controlled Crown Resorts casino business have noted that ongoing regulatory and legal matters raise the question of whether it is a going concern. (see page 98.) That didn't stop Crown from paying some significantly large bonuses to some senior managers.
PANDEMIC PRESSURE INTENSE STILL
In Australia, there were another 1543 new community cases in NSW today with another 1389 not assigned to known clusters, so zero improvement there. They now have 13,022 locally acquired cases. Victoria is reporting another 334 new cases today, so it is still getting worse there, particularly in Melbourne's north. Queensland is only reporting one new case. The ACT has 24 new cases. Overall in Australia, more than 40% of eligible Aussies are fully vaccinated, plus 25% have now had one shot so far. There were six new cases in New Zealand at the border, and 11 more in the community, all in Auckland and all within existing isolated bubbles. So far, 32% of eligible Kiwis now have both shots, another 31% the initial shot.
GOLD HOLDS
Compared to where we were yesterday, the gold price is +US$4 firmer at US$1794/oz in early Asian trade. Earlier it had closed in New York also at US$1794, and earlier again in London at US$1788/oz.
EQUITIES MIXED
The NZX50 is heading for an unchanged session in late trade today. But that will embed a weekly loss of -1.5% if it ends like that. The ASX200 is up +0.2% in early afternoon trade but they are heading for a weekly retreat of -1.8%. Tokyo has opened stronger, up +1.2% in early trade. Hong Kong is up +1.4%. Shanghai has opened up +0.6% in their early trade. The S&P500 ended its Thursday New York session down -0.5%.
SWAP & BONDS RATES STAY SOFT
We don't have today's closing swap rates yet. We expect them to show a minor fall. 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 0.53%. The Australian Govt ten year benchmark rate is now at 1.24% and down -4 bps from this time yesterday. The China Govt 10yr is now at 2.89% and unchanged. The New Zealand Govt 10 year rate is now at 1.88%, and down -2 bps, and slightly above the earlier RBNZ fix for that rate at 1.87% (-5 bps). The market conviction that the RBNZ will hike rates in 2021 remains. The US Govt ten year is now at 1.31% and it has lost a net -3 bps today, although the current level is a recovery from a sharp selloff earlier in New York.
NZ DOLLAR FIRMS MARGINALLY
The Kiwi dollar is now at 71.1 USc, and firmer from where we were this time yesterday. Against the Aussie we are unchanged at 96.4 AUc. Against the euro we are slightly firmer at 60.2 euro cents. The TWI-5 is just on 74.1, similar to where we were this time last week and at the top of 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$46,883 and up +2.2% from where we were this time yesterday. But over the past week, that is a net fall of -5.6%. Volatility in the past 24 hours has been modest at just under +/- 2.0%.
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14 Comments
The US Govt ten year is now at 1.31% and it has lost a net -3 bps today, although the current level is a recovery from a sharp selloff earlier in New York.
Bond dealers sold the market off to establish a price concession ahead of the since priced 10 year re-opening auction.
Additional bearish pressure could be stemming from the U.S. Securities and Exchange Commission’s (SEC) attempts to stop the Nasdaq-listed crypto exchange Coinbase from launching its lending program offering 4% annualized yields. That’s a significantly higher return than the 1.5% yield offered by the U.S. 10-year Treasury note and could bring strong inflows to the crypto market.
“U.S. authorities [are] standing in the way of innovation. $100 trillion of negative real yields on global bonds drives investors into high-yielding cryptocurrency,” Dan Tapiero, founder of DTAP Capital LLC, tweeted early today.
He may just be the person the SEC is worried about.
Yesterday it was announced Tapeiro's 10T Holdings raised $750 million for its first fund to pursue investments in fast-growing cryptocurrency companies.
https://news.bloomberglaw.com/employee-benefits/alan-howard-backed-10t-…
I believe that Interest,co is primarily a financial site , and that Covid is a topical and important story that has a financial aspect , but even a cursory look at the sites commenting policy would suggest that some keen commenters have taken their hobby horse as if they themselves have been infected by some repetitive or permanent keyboard malaise ,or that their position can only be right to the detriment of the story itself.
The AUD/NZD cross looks likely to be lower for the thirteenth consecutive week, a record . As the RBNZ gets set to raise the OCR initially by 100 percent ,could the pair crash thru parity on any thin Monday morning or could the NZD start to resemble the CHF of the 1980s in the months ahead.
NZ 10 year pushing 1.9%. Quite a run up from 1.6% a few months ago when the LSAP programme ended.
Will be interesting to see how the govt reacts if the yield pushes above the symbolic 2%. Will need another LSAP programme to drive down rates. At that point any semblance the govt debt market has of following free market principles is goneskies.
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