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/LOAN RATE CHANGES
SBS Bank has cut -10 bps from its fixed rates for most terms, but -20 bps for its two year fixed rate. More changes from other banks will be coming on Monday.
TERM DEPOSIT/SAVINGS RATE CHANGES
SBS Bank has cut -25 bps from its 18 month and 2 year TD rates, and cut -40 bps from its three year rate. (But it has left its 6.15% rate unchanged for 9 and 12 months.)
STAGGERED HOLIDAYS
It is Australia Day today, so there is no financial trade there. It will be Auckland Anniversary Day on Monday. While some of our staff will be on holiday, we will have a full day of news. And there are some interesting data scheduled to be released on Monday. And don't forget, this year Waitangi Day is on Tuesday week, February 6. That probably means Monday, February 5 will be a day of light economic news. And there's more. In 2024, Chinese New Year begins on Saturday, February 10 and continues for 15 days, with the Lantern Festival marking the end of the celebrations from Thursday, February 22 to Sunday, February 25.
REALITY SETS IN
Analysts are pointing out that despite the sharp resurgence of the past few days, Chinese equities are being sharply discounted by investors. Overall price-to-book ratios there have dropped to a five-year low. Property and finance companies are particularly hard hit. Overall P/B ratios are now under 2x there, their lowest since 2005. (It peaked at nearly 8x in 2008.) Some financial companies have P/B rations at less than 1x. For perspective, the current S&P500 P/B ratio is over 4x. The Nikkei225 ratio is over 2x and rising in a market that has traditionally held low valuations. It still isn't clear that the recent PBoC reserve ratio cut, nor the new huge government share market stabilisation fund will stem the down drift. Short-term they might have, but they have tried these things in earlier crises and they haven't worked. In the past, only "more debt" has put off the reckoning. Investors are now insisting on reality and won't overpay.
DISAPPOINTMENTS
But it is not all roses for US listed stocks either. Tesla reported disappointing results and its stock fell -12% on the day to be down -29% over the past month in anticipation. Intel disappointed too in a report released just as Wall Street closed, and its stock fell -11% after the close. Generally however, the American earnings season has been strong in the current cycle.
SWAP RATES HOLD
Wholesale swap rates should be basically unchanged today. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is unchanged at 5.66%. The Australian 10 year bond yield is down -4 bps at 4.22%. The China 10 year bond rate is down -2 bps at 2.51%. And the NZ Government 10 year bond rate is down -6 bps at 4.77%, while the earlier RBNZ fixing was at 4.72% and down -3 bps from yesterday. The UST 10 year yield is now at 4.10% and down -7 bps from yesterday. The UST 2yr is at 4.28% and down -10 bps, so that key inversion is now less at -18 bps.
EQUITY WINNERS & LOSERS
The NZX50 is down -0.5% in late trade today but will be up +1.4% for the week if that holds. The ASX200 is on holiday and not trading having booked a short-week +1.9% rise. Tokyo is down -1.0% in morning trade heading for a -1.2% weekly fall off its record high. Hong Kong is little-changed in early trade and is heading for a strong +5.5% weekly gain. Shanghai is unchanged at its open heading for a +2.9% weekly rise. In New York, the S&P500 ended its Thursday session with a smallish comeback and booking a +0.5% rise on the day. Intel and Tesla might weigh on Friday trade tomorrow however.
OIL RISES
Oil prices are up about +US$2 at just under US$77/bbl in the US while the international Brent price is now just over US$81.50/bbl.
GOLD FIRMS
In early Asian trade, gold is now at US$2021 and up +US$6 from this time yesterday. It closed earlier in London at US$2025/oz.
NZD ON HOLD
The Kiwi dollar is now just on 61.1 USc and unchanged this time yesterday. Against the Aussie we are down -30 bps to 92.7 AUc. Against the euro we are little-changed at 56.3 euro cents. That means the TWI-5 is still at just over 70.1 to end the week.
BITCOIN HOLDS
The bitcoin price has moved down slightly today to US$39,918, only a minor drop of -0.3% from where we were this time yesterday. There's been low volatility over the past 24 hours of just on +/- 0.9%.
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36 Comments
You couldn't really make this up. But appears it might not be fake news.
The European Central Bank has asked some banks to closely monitor activity on social media to detect a worsening in sentiment which could lead to a deposit run, two banking executives with knowledge of the request told Reuters.
European regulators have sharpened scrutiny of banks' liquidity after the collapse of Silicon Valley Bank and Credit Suisse in March last year, the people said, requesting anonymity because the discussions are private.
https://www.msn.com/en-ca/money/topstories/ecb-asks-some-lenders-to-mon…
LOL. Surely you don't believe they aren't already monitoring social media? They have been for yonks!
Edited: Remember the Enron crash? Well a Yahoo forum was posting facts to suggest it was all smoke and mirrors way, way before the crash and way before regulators took an interest. You'd be amazed at who is posting. And who is reading. If one has the knowledge to filter out nonsense there is much that can be learnt.
(speculation)... It's probably thanks to the fact that the typical Social Media user has a near zero bank balance that they fail to initiate a bank run.
Those with funds to lose are busy at work and miss the SM triggers. Those that pee their hours away on SM see little to gain and little to lose if the banks collapse, since the SM itself is the currency they care about.
Thanks David.
On conclusion of reading your daily "What's Happened Today", I am reminded that it must be wine'o'clock and it is time to stop work, (stop posting), put my feet up, before thinking about what I'll cook the family for dinner. Who knew interest.co.nz's dedicated staff contributed so much to NZ's mental health? A national treasure. Thanks again.
Tesla reported disappointing results and its stock fell -12% on the day to be down -29% over the past month in anticipation.
The most challenging financial event for investors in the coming decade will be the repricing of securities to valuations that imply adequate long-term returns, following more than a decade of reckless and intentional Fed-induced yield-seeking speculation. Measured from the recent bubble peak, the likely consequence will be a long, interesting, 10-20 year trip to nowhere for the S&P 500. There’s also a strong possibility of an interim loss in the S&P 500 in the range of 50-70% over the completion of this market cycle, or as we observed between 2000-2009, a sequence of cyclical lows punctuated by several extended recoveries. I expect S&P 500 total returns to be negative, on average, for well over a decade – an outcome I also projected at the 2000 market peak. Link
Happy Australia Day!
"From what I have said of the Natives of New-Holland [Australia] they may appear to some to be the most wretched people upon Earth, but in reality they are far more happier than we Europeans; being wholly unacquainted not only with the superfluous but the necessary Conveniences so much sought after in Europe, they are happy in not knowing the use of them. They live in a Tranquillity which is not disturb’d by the Inequality of Condition: The Earth and sea of their own accord furnishes them with all things necessary for life, they covet not Magnificent Houses, Household-stuff &c., they live in a warm and fine Climate and enjoy a very wholesome Air. . . . In short they seem’d to set no Value upon any thing we gave them, nor would they ever part with any thing of their own for any one article we could offer them; this in my opinion argues that they think themselves provided with all the necessarys of Life and that they have no superfluities."
- The Journals of Captain James Cook on His Voyages of Discovery.
So Captain Cook's Journals are where Jonathan Swift may have acquired his writing style from for his famous book "Gulliver's Travels". Swift mean't "Gulliver's Travels" to be a satire on all the exotic travel stories (some factual but many fictitious) prevalent in his time, which was an age of discovery of new lands. However, today "Gulliver's Travels" is only known as a chilren's story which was never his intention. But Swift's style almost exactly mirrors Captain Cook's.
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New Tokyo property getting pricey. 25x average national salary. Mortgage debt servicing low and comes with all kinds of benefits - no mortgage payments if primary breadwinner somehow cannot work due to illness and death.
The price of new apartments in Tokyo during 2023 averaged more than 100 million yen (US$677,785) annually for the first time ever, about 25 times higher than Japan's nationwide salary.
The average price of newly built apartments in Japan's capital rose 39.4% from the previous year to a record 114.8 million yen ($778,041) in 2023, the Real Estate Economic Institute said on Thursday.
https://e.vnexpress.net/news/property/new-tokyo-apartment-costs-25-time…
Yet houses in the countryside there are almost free.
Instead, let's all squish up together in shoeboxes and plug into the machine. Yum yum.
We have a mortgage renewing in a month.
Imterested to see the rate ASB offered through the app (which is never a generous discount) is 0.4% for everything up to a year, and reduces to 0 for everything 3 years and over.
Curious the motivation behind that, I thought they'd love long lending right now.
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