Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
HSBC raised their floating rate by +45 bps today to 6.79%. Nelson Building Society raised their by +30 bps to 7.25%.
TERM DEPOSIT RATE CHANGES
We had noted some TD rises from Gold Band Finance. But in fact there were more that we missed, so our tables are updated with them all now..
A NEW VIRTUE? NO, JUST MATCHING
Westpac said it is culling a range of fees, nine of them in fact, involving home loans, personal loans, and personal overdrafts. Their home loan establishment fee ($140) and documentation fee ($50) are included, but readers should note that both ANZ and Kiwibank had already done away with these fees so Westpac is late to the party with these.
EASILY AVOIDING RECESSION
Economic activity rose +1.7% in June quarter from a year ago, on surging demand in the country's service industries. That was a big improvement from the -0.2% fall in the first quarter. The consensus estimate was for a +1% rise in Q2, so this revealed a strong upside. The RBNZ had forecast a +1.8% rise in August, Westpac +1.6%, Kiwibank +1.1%, BNZ +1.4%, ASB +0.8% , and ANZ just +0.4%. The economists that missed getting this close each said that this result isn't an indicator of what is to come. The ASB economists now see the OCR rising to 4.25% as its cycle peak. Remember it is at 3.0% now so more grunty rises to come.
STILL LEAKING AWAY
The RBNZ monitors residential investment in its M10 series. That showed really strong growth in the sector in 2021, but it is leaking away in 'real' terms in 2022, falling -1.4% in the year to June 2022. This data might be a bit dated, but it does validate other more up-to-date markers (like the construction completion certificate data mentioned in the next item).
NEW BUILDS IN AUCKLAND SAG
The number of new homes built in Auckland over the past 12 months fell by -10.5% which means -1500 fewer are in the market than expected. Some consented aren't making it off the plans.
IMPORTING INFLATION
The RBNZ's sectoral model updates the tradable/nontradable inflation monitoring (M1). Tradable inflation is was up to 8.6% in June compared to the overall 7.3%. That indicates we are now importing inflation, and a falling exchange rate isn't helping.
TOUGH POLLING
The latest TaxpayersUnion/Curia political poll suggests that the Labour/Greens coalition would lose an election now, and Nation with the support of Act would have the numbers. National is at 37% in this poll and Act at 12% and that would translate into 63 House seats. 54% of those surveyed say the country is heading in the wrong direction, but just 32% of people thought it was heading in the right direction. These are record lows.
MFAT MANAGER GETS KEY TOP GIG
The Government as appointed a career diplomat as its new Ambassador to China. Grahame Morton is a Senior Diplomat with the Ministry of Foreign Affairs and Trade. He has served as High Commissioner to India, Principal Adviser on Americas and Asia, and as the divisional manager of North Asia Division. He was also the lead negotiator of the NZ-Singapore Enhanced partnership and led the whole of government New Zealand China Capable Public Sector Program.
RELENTLESS SMALL RISES MOUNT UP
Stats NZ reported that sea levels rose faster in 2020 at almost +5 mm for the year, up from the 1995/2014 baseline period to be about +23 cm higher than in 1905 when reliable tidal records started. For old-school readers, that is about a foot higher in 115 years. The slow rise allows time for adaption - if we take the opportunity and make the investment.
HOT BIDDING
There was a very well supported Government bond tender today, with 132 bids entered worth $1.385 bln. They were bidding for only $400 mln on offer in three tranches. The April 2027 $200 mln went to only one big bidder, leaving 49 others unsatisfied. They won it all at 3.92%, which was lower than the prior event two weeks ago at 3.97%.
GOOD AUSSIE JOBS REPORT
Australia reported its August labour market data today and that showed a good +59,000 expansion in full-time jobs, and a fall in part-time jobs. The AUD firmed. It also showed a small rise in their jobless rate to 3.5%. (The June NZ jobless rate was 3.3%.)
BIGGEST MONTHLY DEFICIT ON RECORD
Japan ran its biggest single-month trade deficit on record in August as imports surged on high energy costs and a slump in the yen, exposing the economy's vulnerability to external price pressures. Imports rose +50% in a year driven almost exclusively by energy imports. Their cost in yen ballooned because the value of the yen fell. Exports rose +22%.
SWAP RATES FIRMER
Wholesale swap rates are probably slightly higher today on the better-than-expected GDP result. Our chart will record the final positions. The 90 day bank bill rate is up +1 bp to 3.62% which is its highest since April 2015. The Australian 10 year bond yield is now at 3.67% and down -2 bps from this time yesterday. The China 10 year bond rate is up +1 bp at 2.68% and its highest in a month. The NZ Government 10 year bond rate is now at 4.03%, up +2 bps but below the earlier RBNZ fix for this bond at 4.05% which was up +5 bps. The UST 10 year is now at 3.42% and down -1 bp from this time yesterday.
EQUITIES RECOVER, SORT OF
Wall Street ended up +0.3% with a final Wednesday flurry after struggling all session. Tokyo is up +0.5% in ongoing trade today. Hong Kong is up +0.3%. But Shanghai is down -0.8% in their Wednesday morning trade, unhindered so far by the typhoon warning. The ASX200 is up +0.6% in early afternoon trade. But teh NZX50 is slipping -0.1% in late trade here.
GOLD DOWN AGAIN
In early Asian trade, gold is down another -US$8 from this time yesterday to US$1,694/oz.
NZD HOLDS LOWER
The Kiwi dollar got no material boost from the GDP result and is now at 60.1 USc and holding most of yesterday's retreat. Against the AUD we are weaker at 88.9 AUc. Against the euro we are a little firmer at 60.2 euro cents. That all means our TWI-5 is unchanged at 69.7.
BITCOIN FALLS AGAIN
Bitcoin has fallen again to US$20,078 and down a further -1.7% from this time yesterday. Volatility over the past 24 hours has been moderate at +/- 2.1%.
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47 Comments
Robbo for President. Add to the tally $55 million for the media to run cover for him.
"...for now it seems safe to assume that Orr and his colleagues (facilitated by the Minister of Finance) have cost taxpayers around $9.5 billion dollars – getting on for 2.5% of New Zealand’s annual GDP (or about 7 per cent of this year’s government spending).
These are really huge losses, and to now the Governor’s defence seems to amount to little more than “trust us, we knew what we were doing”, accompanied by vague claims that he is confident that the economic benefits were “multiples” of the costs. But there is no contemporary documentation in support of the former claim (eg a proper risk analysis rigorously examined and reviewed before they launched into this huge punt with our money), and nothing at all yet in support of the latter claim."
https://croakingcassandra.com/2022/09/15/the-9-billion-dollar-man/
Thought this was interesting. Broad money supply in 2021 when normalized to 100 in 2000
USD - 410
Euro - 340
JPY - 200
People think the BoJ is the bad boy. But the reality is that Japan grew their broad money supply far more slowly than the United States and Europe.
For the chartist among us, the BTC Double Top and Shoulders is looking interesting.
Two Blow-off Tops above $60k – April and November ’21; a Shoulder each side at $40k – January ’21 and April ’22. A brief Hold, like now, at $20k in December '20, and if the mirror holds true a retracement to $5k to match March ’20 look possible within 6 months.
But my pencil went blunt some time back.....
RELENTLESS SMALL RISES MOUNT UP?
You see, sea level rises are a bit like house prices. Have house prices gone up in recent years, OR has the purchasing power of money gone down?
So, 'sea levels'.. it's pretty funny seeing politicians standing on sinking islands, blaming CO2 for rising sea levels. Do they NOT understand that plate-tectonics is causing many of these islands to sink?
It's funny seeing politicians claim that melting icebergs/shelfs cause sea level rises. Fill up your next empty milk-bottle with water and freeze it. In the morning the lid will be off with ice poking out. When ice melts, water levels become lower.
Now, 'climate scientists' will come back and say; "you're forgetting that salt water expands!". Indeed it does, but if all 'the ice' melted, even with salt water expansion (most extreme case) we're talking 15cm?
"Arrrr", the 'climate scientists say; "you're forgetting the surface of the earth is topographically uneven". True, but water does find its' level? So what does this topographical witchery mean for salt water expansion? "Well", the 'climate extremists' say, "1meter in some areas".
So if all the ice on earth melted, we're talking 1 meter sea level rises in "some area(s)".
lol
Yes formed on land , and broke off to become icebergs. Either way the ice melting increases the sea level. Seawater does freeze , but at a lot lower temperature , therefore the vast majority of ice and icebergs comes from the land , or air, not the sea. If it melts the sea level increases.
The flaw in your argument is assuming the icebergs comes from the sea freezing . As real terms points out , most of the icebergs and other melting ice comes from the land , or breaks off from floating ice shelfs. The floating bit , i give you is 50 / 50 , while 30% of the iceberg is above the water , that ice melting contains air, so the 30 % increase in water volume is reduced by the amount of air in the whole iceberg.
Interestingly, huge parts of North America, Europe and Asia are rising at about 1cm/year because of a process called isostatic adjustment. The land was depressed under the immense weight of glaciers kilometers thick in the last ice age, and now the land is slowly rising back up.
And just for fun, given the trans-tasman rivalries:
King Charles’ alleged Australian love child drops DNA bombshell.
https://www.news.com.au/entertainment/celebrity-life/royals/australian-…
Of course, Charles won't give a DNA sample for analysis......but Harry just might.
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