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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
No changes to report again today. Meanwhile, Resimac said from July 1, 2024, it will cease accepting new home loan applications in New Zealand. After reaching a high in February 2021, Resimac's traded share price has fallen from AU$2.45 then to just AU$0.87 now.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.
LOWEST EVER, EXCEPT DURING THE PANDEMIC
Kiwis' confidence in getting a new job has plummeted. The Westpac McDermott Miller Employment Confidence Survey shows a marked fall in the latest three months.
FAMILY REUNIONS TWIST IMMIGRATION DEMOGRAPHICS
There has been a big surge in the number of older migrants gaining residency. And the rise has been especially large for those over 65 years. (Opinion: This will only work for us if the number of people arriving in the 15-45 age bands rises much faster. The reason should be obvious.)
FAST REVERSAL
Meanwhile, the number of job ads declined for the fourth consecutive month in May. Seek reports NZ's labour market is ‘incredibly tough’ as job ad volumes are down -30% from a year ago.
RESTATED
The RBNZ foreign currency intervention capacity fell -$730 mln in May to $20.2 bln, but that was probably only a revaluation impact of their capacity in FCY.
GODFREY BOYCE JOINS BNZ BOARD
Godfrey Boyce, ex-CEO of KPMG NZ, has been appointed to BNZ's board, effective August 1. Boyce will be an independent, non-executive director. Prior to becoming KPMG's CEO in 2016, Boyce led the firm's advisory arm for three years. He joined KPMG in 1985 as a graduate and retired at the end of 2023.
KEEPING IT KIWI
Kiwi insurer Tower (TWR) announced it has entered into a referral agreement for general insurance products with Kiwibank for its retail banking customers. The agreement is for an initial term of five years. Tower has referral agreements in place with several other New Zealand organisations, including the Kiwi Adviser Network, New Zealand Financial Services Group and Trade Me, among others.
AVOCADO PROSPECTS LOOK UP
Although 2023 was a very tough year for the avocado industry, Rabobank notes that our exports to China shone. They rose +159% to that market and efforts to build market share in Asia are an essential step if New Zealand wants to become a more significant global player in term of avocado exports, they said. The US market is the global heavyweight but it would be hard to break in there given the well-entrenched supply chains from South America and Mexico.
AUSSIE CONSUMERS NOT CONVINCED INFLATION IS IN RETREAT
Australian consumer sentiment is mired in low territory, according the the June update of the Westpac-Melbourne Institute survey. Despite the improvement, consumer sentiment remains below its March level and still firmly in deeply pessimistic territory. The survey detail suggests positives from fiscal support measures are being negated by increased concerns about inflation and the outlook for interest rates.
BUT SOUTH KOREANS ARE MORE POSITIVE
Their latest consumer sentiment survey rose in June to its highest level since March. Sentiment regarding current living standards increased, while future outlook improved by the same margin. Expectations for future household income also rose.
SWAP RATES STAY ON HOLD
Wholesale swap rates are likely to be higher but only at the long end on global forces. Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 5.61%, a level it has hovered around for 110 days now. The Australian 10 year bond yield is down -2 bps from this time yesterday at 4.24%. The China 10 year bond rate is also down -2 bps at 2.25%. The NZ Government 10 year bond rate is down -2 bps as well at 4.63% and the earlier RBNZ fix was at 4.59% and unchanged from yesterday. The UST 10yr yield is down -3 bps from yesterday at 4.23%. Their 2yr is now at 4.73%, so the curve is a bit more inverted at -50 bps.
EQUITIES MIXED
The NZX50 is up +0.2% today in late trade. The ASX200 is up +0.8% in afternoon trade. Tokyo has opened up +0.5%. Hong Kong is also up +0.5% at its open, but Shanghai is down -0.2% and continuing their retreat. Singapore is up +0.2%. But Wall Street ended its Monday session down -0.3% on the S&P500.
OIL ON HOLD
The oil price is up +US$1 at US$81.50/bbl in the US, and just over US$85/bbl for the international Brent price.
GOLD ON HOLD
In early Asian trade, gold is slightly firmer, up +US$2 from this time yesterday at just on US$2326/oz.
NZD LITTLE-CHANGED
The Kiwi dollar is only marginally firmer from this time yesterday, at 61.2 USc. Against the Aussie we are -20 softer at 91.9 AUc. Against the euro we are also -20 bps softer at 57 euro cents. This all means the TWI-5 is little-changed at 70.8.
BITCOIN DROPS
The bitcoin price is down -4.1% from this time yesterday, now at US$60,585. Volatility of the past 24 hours has been very high at just under +/- 4.0%.
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64 Comments
Household heating rising costs are biting. Sure are. So too, other unavoidables. Rates, insurance, fuel you name it. These are hardly minor parts of household budgets and for those households contemplating a mortgage renewal at say 3 to 4% above their present one, their prospects must feel dismal. All of these factors feed inflation significantly and holding a high OCR rate constant, does diddly squat to suppress that input.
And with commendable intelligence, we voted out one 'borrow from the future' brigade, and another in.
Debt being a claim on the future, whether it's for cancer drugs or covid cushioning.
Measuring heating in money, of course, is a-about-f. The underwrite is the other way around...
Again as Chris Trotter correctly predicted here, around about a year ago, that the electorate would be obliged to vote for the least worst. Still with concern to inflation my mind cannot help recall when I first encountered the question of international financial issues in the primitive working of a trading bank in the 1960s and seminars with such as Rufus Dawes, Len Bayliss; emphatic opinion that nations that print money without restraint and proceed to spend it indiscriminately, and inconsequentially, will not only invite rampant inflation they will incur it and then discover they have a tiger by the tail. So sixty years later the sixth Labour government chose to challenge the theory and here we all are now.
Happy to predict that the housing market does not turn until this corrects itself at a minimum
Kiwis' confidence in getting a new job has plummeted
-10% Dec 23 to Dec 24, Almost Guaranteed, or your money back............ 1st 5 callers also get a free set of Ginsu knives
More combover wisdom
- Landlords report that it is becoming harder to find good tenants.
- There has been a sizeable drop in the average rent rise which landlords will aim to achieve in the coming year.
- Investors overall still intend being net sellers of property in the near future.
Consensus here is that rent is set by tenants ability to pay. Which may be reducing in the current economy?
An investment price is usually calculated on it's net income return less it's opportunity cost & risk vs alternatives eg TDs. Edit: yes people have been caught up in CGs optimisk for several years until 2022 however there is now 5-10 years horizon at least so back to basics
b-b-but some wingnut on here told everyone that prices are about to take off and he was going to make a killing in property
Nek minnit in Riverhead:
MORTGAGEE SALE – 6.287ha future urban land
https://www.trademe.co.nz/a/property/residential/sections-for-sale/auck…
MOTIVATED VENDORS WANT A SALE!
https://www.trademe.co.nz/a/property/residential/sale/auckland/rodney/r…
Vendors Are Motivated!
https://www.trademe.co.nz/a/property/residential/sale/auckland/rodney/r…
Motivated vendor- now is the time to move
https://www.trademe.co.nz/a/property/residential/sale/auckland/rodney/r…
URGENT AUCTION - MUST SELL!
https://www.trademe.co.nz/a/property/residential/sale/auckland/rodney/r…
Present All The Offers!
https://www.trademe.co.nz/a/property/new-homes/new-house/auckland/rodne…
Price Drop... Must Be Sold!
https://www.trademe.co.nz/a/property/residential/sale/auckland/rodney/r…
Some of them are so motivated, they cannot even be arsed to post an asking price........
Little hint in this market PBN is a really dumb marketing strategy, if you want people to look and offer.
EVERYONE who has listed wants a sale FFS
Nek minnit in Riverhead: - a flood?
One commentor here even posted "Landlords will always raise rents to compensate themselves during times of capital loss"
If that be the methodology then they're well and truly screwed.
Like a thief in the night, Landlords are having their pricing power whipped from underneath them. Loss of capital value AND shrinking yield- that's quite an eye watering combination....
Yes, sure, neglected to refer to Mr Ryan the Attorney General’s report December 2023 identifying $billions of, unpurposed, uncontrolled, unaccountable spending. But at least former Finance Minister Robertson did have the grace to admit and apologise, albeit begrudgingly, before he jumped ship.
In our household of 4 the winter power bill is $80 more per month. We have heat pumps going all night, which is a nicety we can afford. (although we have them going all night in cooling mode in summer too)
I see the winter energy handout is $31.82 a week, or $137.88 a month. Seems a bit OTT to me.
Depends where you live - talking to relatives in colder parts of NZ (lower South Island) their June/July power bills often spike to $600-700 per month to heat their homes.
Not many options to avoid this as they are unable to manage firewood etc so heat pumps are the primary source of heating.
Often daily high temps are less than 5deg (a number of days/weeks won’t get above 2-3deg in the day) so need to have heat on continuously while home (and to avoid frozen pipes).
Some struggle to afford to keep their homes warm because of the cost.
Yip North Island winters (apart from central NI) are pretty mild - just wet/windy.
A good McKenzie country or Central Otago winter is a different experience to this - often days (or sometimes weeks) with weather below 0deg (even during daylight hours).
Older retirees can really struggling with heating costs over this period - some really do it tough to try and keep costs down.
So maybe the energy payout should be location dependent? Or maybe that’s just the cost of living in the South Island, it may be cancelled out by other savings.
This seems like an awful waste of energy. Instead of subsidising the waste maybe the government should start installing double glazing etc. our government seems to invest way to much in day to day living and not enough into the future.
I meant the govt paying instead of the handout (and instead of many other energy investments like hydro batteries). Maybe that cost is recouped upon sale of the house. And make double glazing mandatory for South Island rentals instead of the government subsidising it.
"...Newshub understands that spend was to the tune of $8 million.
Willis said she was told she isn't allowed to disclose that figure."
https://www.newshub.co.nz/home/politics/2024/06/government-refuses-to-r…
Let's hope so...
NZD8M is approx USD5M
There was a report 5 years ago of a McKinsey partner charging AUD 16000/day...the rate has probably gone up since
https://www.afr.com/politics/federal/revealed-mckinsey-partners-charge-….
(& they'll still borrow your own watch to tell you the time 🤣)
You don’t find out what you are insured for until you make a claim. And from what was reported in the media and high court proceedings following the Canterbury EQs, a lot of policy holders soon discovered more about what they were not insured for, in comparison to what they thought they were. From experience Tower would be well included in that opinion.
The chart below shows that it's taken 60 years for the most famous and arguably successful investor in the world, Warren Buffet, to build Berkshire Hathaway up to just shy of a trillion-dollar company ($883bn at Friday's close). Indeed the company's origins began in the 19th century so the full journey has taken well over a century and it’s yet to hit a trillion dollars.
Contrast that with Nvidia, which went from just below $2tn market cap for the last time on April 24th, to over $3tn just 30 trading days later. Even more impressively, at its record close last Tuesday, where it became the largest company in the world, the last trillion of market cap was added in only 23 trading days.
https://assets.zerohedge.com/s3fs-public/inline-images/nvda%20berkshire…
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