Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes today, but Kiwibank has said it will lend 90% on KiwiBuild houses.
TERM DEPOSIT RATE CHANGES
None to report.
JOBS THREAT
Following last week's factory PMI slump, eyes today were on the services PSI from BusinessNZ. And it delivered a bounce for July after a weak June. But one component will cause worry; the employment index contracted, something we have't seen since 2013 - and that was the second contraction in a row, the first time that has happened since 2012.
FOREIGN BUYER BAN
It is now likely that the foreign buyers ban will likely become law this week.
GREAT SHAPE
We are approaching the time when our hydro storage lakes hit their lowest levels of the year and inflows are low awaiting the snow melt. But this year, our lake levels are are above average for this time of year, more like what we usually have in December, and inflows like October. We are in great shape with hydro water storage.
TAME
Data for food prices in July was released by Statistics NZ today and that shows overall prices up just +1.1% in a year. Fruit and vegetable prices were down -1.4%, meat, poultry and fish prices were virtually unchanged, grocery prices were unchanged too, 'non-alcoholic beverages' (coffee, tea, sodas, juices, etc.) up +4.0%, and eating out food was up +3.2%.
ROLLOVER?
Z Energy says they are 'considering' the launch of a new retail bond. But they have a $150 mln bond maturing on August 15, so this is probably just a rollover of that 7.50% coupon issue (which is now yielding 3.50%).
SWAP RATES HOLD
Wholesale swap rates are holding at their new lower level. Today they are up +1 bp across most durations. That has the 2-10 curve to just +85 bps. That is still fairly steep compared with most other benchmark markets,but it is as low as we have seen it in two years. The UST 10yr is weaker and now at 2.85%, down -2 bps from this morning and pushing their 2-10 curve lower, now at just +26 bps. The Aussie Govt 10yr is at 2.56% (down another -3 bps today), the China Govt 10yr is at 3.58% (unchanged, although markets have only just opened there), while the NZ Govt 10 yr is now at 2.55%, another -6 bps drop. That is now -20 bps lower since just the beginning of August. The 90 day bank bill rate is unchanged at 1.91%.
BITCOIN UNCHANGED
The bitcoin price is now at US$6,321 and virtually unchanged from where opened this morning.
NZD HOLDS LOW
The NZD's slump hasn't got worse so far today. We are now just on 65.9 USc. But it is other currencies now taking the hits. We are up on the cross rates to 90.6 AUc which is almost a +1c gain, and the euro is at 57.9 euro cents, about a +½c gain. That leaves the TWI-5 up over 69.9.
This chart is animated here. For previous users, the animation process has been updated and works better now.
Daily exchange rates
Select chart tabs
27 Comments
Strong US dollar starting to take its toll. Trump talk's a tough game but is actually following through with some action. I know, nobody likes him except me, and even I think he's a bully, but we needed some back bone to stand up to another couple of bullies - the Russian & the Han. Not sure if most NZers understand how close it is right now, but it's very close to ''either you or me'' time. Europe's f......d, so is everything south of California, and even they are burning up. There's over 600 million displaced human beings mostly from Asia and the Middle East, although South & Central America are bleeding, so that doesn't leave too many safe places out there - North America, Australasia and Antarctica by my reckoning. Let's be grateful for what we've got, even if it is leaderless.
Aha. Let's be grateful for what we have got. Quite. The mood is turning. When times are good our wives tell us about how well their friends are doing, as they see their new car, new clothes, holidays, new house/extension. When times are bad we watch and think "There, but for the grace of God, go I".
Marks and Spencer to close 100 stores by 2022, 7 stores closed on Saturday. Is it Amazon's fault? Did they take on too much debt? or is it that there is just not enough disposable income while the banks milk the home loan market?
https://www.londonstockexchange.com/exchange/news/alliance-news/detail/…
from twitter
My, oh, my.... Turkish intervention lasted exactly 20 minutes... 11 billion US dollars...
https://pbs.twimg.com/media/DkdQy90WwAE5bCM.jpg
The asset price bubble could just get popped by the most unlikely candidates , people who make really good Kebabs, smoke Huka 's and wear Fez's, who have borrowed themselves into a hole , and now cannot repay the debts .
The whole edifice of the global financial system is looking shaky with emerging currencies in retreat , and EU Banks worried that Turkey could default
Fritz, you're right, Deutsche bank could present a far bigger challenge.
https://seekingalpha.com/article/4198380-4-months-since-deutsche-banks-…
NZ and Aussie Dollar falls on risks of contagion from Turkish sell-off
'Data from Statistics New Zealand showed that New Zealand's food prices rose 0.7% on month in July, up from 0.5% in June.
Vegetable prices rose 9.2% in the month, with higher prices for fresh lettuce, tomatoes, and broccoli making the largest contributions.'
https://www.londonstockexchange.com/exchange/news/alliance-news/detail/…
Boatman... My guess is he did (and he should have a good understanding to be fair) but I was berated for suggesting that he may have had an idea about the trading halt in Fonterra on Thursday... no dividend later and a need to have a weaker dollar would suggest that he did the right thing whether he knew it or not..... The challenge we have is that we can't risk having a weaker dollar by lowering interest rates as that would cause a collapse in months.... Just my view and hey what do I know?
Interesting article below.. First time buyer incentives in the UK may be coming home to roost... Aussies have had similar 'prop up' of the bottom of the market as has NZ (admittedly to a lesser degree) but the lessons are there to be learnt that the market should never be 'artificially' propped up... let the greedy take the pain, it's their own mistake if they didn't understand the maths, first time buyers who haven't had the life experience should not be punished just because of a desire to emulate their parents in ownership. (before the age of 40, rather than their parents 25).
http://www.propertyindustryeye.com/uk-housing-market-is-a-bubble-with-h…
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.