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
There are no changes to report todays. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here either. All rates less than 1 year are here, for 1-5 years, they are here.
DEPOSITOR COMPENSATION SCHEME FUNDING STRATEGY PUBLISHED
Treasury has published the inaugural funding strategy for the incoming Depositor Compensation Scheme (DCS), which is scheduled to be implemented from mid-2025. The funding strategy, or Statement of Funding Approach (SoFA), provides estimates of the costs of the DCS over the next five years and sets out the strategy for funding these costs and liabilities. The SoFA sets a target fund size of 0.8% of protected deposits, which will be built over 20 years and funded by levies paid by deposit takers which are being developed by the Reserve Bank. The DCS will protect each eligible depositor up to $100,000 per licensed deposit taker in the event of failures.
PROGRESS REDUCING THE PASSPORT BACKLOG
Now more than 90% of passport applications are via the online process. And the new Passport Office system is now working much better. The passport application queue has reduced from 53,847 at the beginning of May, to 35,290 today (July 5). That is a reduction of -34% in five weeks. In June, they issued 43,488 passports - almost 6,000 more passports than applications it received.
DEPRECIATION CHANGE HIT
The Coalition's tax changes eliminating depreciation on buildings that have a 50 year life or more are cascading through company results. For many the changes will impact the accounting value of deferred tax and also the reported earnings for the current year. It is long overdue change. The value of buildings don't really depreciate if they are maintained, and the maintenance cost is deductible. (If anything, they appreciate, and any real estate professional will attest. Land on the other had, is where there is more volatility.)
SOME FINCOs REPORT RESULTS
A couple of finance companies released their financial results recently. Finance Direct reported a -$786,000 loss, in part due to its closure of the related Lending Crowd business. A feature of their changing business however has been positive cash flows (+$640,000). Xceda Finance reported a profit of $1.2 mln, and very strong positive cash flows.
WESTPAC NZ CHIEF RISK OFFICER LEAVING
Westpac NZ says its Chief Risk Officer, Dirk McLiesh, is leaving the bank at the end of 2024. He joined the bank in August 2022.
US ON HOLIDAY
Global financial markets are very quiet today, emphasising just how dominant Wall Street is to their normal functioning.
SWAP RATES NOT DOING MUCH
Wholesale swap rates are likely to be little-changed again today. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 5.61%, a level it has hovered around for 120 days now. The Australian 10 year bond yield is up +1 bp from this time yesterday at 4.47%. The China 10 year bond rate is down -2 at 2.23%. The NZ Government 10 year bond rate is up +1 bp at 4.79% and the earlier RBNZ fix was at 4.73% and up +4 bps from yesterday. The UST 10yr yield is unchanged from yesterday at 4.37%. Their 2yr is still at 4.71%, so the curve is still at -34 bps.
EQUITIES MOSTLY NEGATIVE
The NZX50 is down -0.3% in late trade. And the ASX200 is down -0.2% in afternoon trade. Tokyo is up +0.3% at its open and pushing new all-time highs. Hong Kong is down -0.7%, and Shanghai is down a full -1.0% to open their day's trading. Singapore is down -0.4%. The S&P500 isn't trading because it is a holiday on Wall Street.
OIL FIRM
The oil price is up +50 USc at US$83/bbl in the US, and at US$87/bbl for the international Brent price.
GOLD FIRM
In early Asian trade, gold is a little firmer since this time yesterday, up +US$4 at US$2362/oz.
NZD HOLDS
The Kiwi dollar is holding from this time yesterday, now at 61.2 USc. Against the Aussie we are marginally softer at 90.9 AUc. Against the euro we still at 56.6 euro cents. This all means the TWI-5 is little-changed at 70.4.
BITCOIN FALLS FURTHER
The bitcoin price has fallen another -3.8% from this time yesterday, now at US$56,737. That is down -6.5% in a week. Volatility of the past 24 hours has been moderate at just over +/- 2.2%.
GO THE ALL BLACKS!
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
63 Comments
The Topix is down today, but hit an ATH y'day--first time since 1989. The Topix is a broader and more comprehensive measure of the Japanese stock market compared with the Nikkei 225. No doubt a weaker yen has been positive for exporters and for those companies with assets abroad.
I am tucked into NZ Cash, I am not happy with the breadth of the market or the composition of the leading shares.
Happy to let this one play out.
Breeding dressage horses, but thinking about adding a few racing gobies to the fleet. Those winners circles look good. Would rather manage my own risk here.
Flew down to Christchurch a week ago to attend the birthday of our ex-dressage leading man - Irish Hunter, Wynyard Bally Bay. We passed him on to an enthusiastic 15.yo lady; still full of that enthusiasm and love for horses only pony club can create. We'd assumed he'd have gone to Horse Heaven 10 years back. But, no. There we all were. His, now 3, past and current owners, all standing beside him at....35! We'd thought he might remember us from the day we passed him on in 2008, but no. Just that look in his eye of "Who are you?" and "I'll have another carrot, thanks". Horses!
Sorry yes the left disagree on this so it's not a lie? Are we in the twilight zone?
In his debate with President Joe Biden last week that the Jan. 6, 2021, attack on the Capitol involved a “relatively small” group of people who were “in many cases ushered in by the police.”
There is stark footage of Trump addressing the mob, Trump inciting a mass of rioters, an insurrection, and stark footage then of the mass of them assaulting the Capitol, the centrepiece of American democracy. Where it gets stuffed up is that the authorities entrusted with the prosecution of let’s say law and order, are so politically compromised and entangled that law and order cannot be enforced. It has taken nigh on four years to bring anything to heel. The whole damn shooting box is a shambles. I am a very slight acquaintance of the McKay family, the tragedy this week in California, and have recorded here that on our last return visit, last year, to where we had lived in the USA we found ourselves, uncomfortable and apprehensive and unfortunately that sort of attack is exactly what we we warned about by our old friends there.
One cop died after being pepper sprayed and struck on the head with a fire extinguisher. He actually walked away from the riot but died some hours later. Not saying that's not bad but not something that people need to go and seek psychological help for when their assessment of Jan 6 doesn't match yours.
If they are invested in the US market, then that S&P performance was driven by only a couple of stocks (Nvidia, Apple, Microsoft). The rest of the market is actually falling, more stocks hit 52 week lows last month than made new 52 week highs. The divergence is not good, it will probably end in tears as they all do.
On the face of it it looks like a Labour landslide but their %vote is only up a few %. The real winners are Reform. The question is what happens next? Tories lurch further to the right? Reform peter out and back to status quo or they kick on and become the de facto 2nd party? I suggest that if immigration keeps going at current levels then the latter case is likely.
Tories lurch further to the right?
You do realise the Tories have been obliterated because they were lefty globalist shills? If they move further to the right they'll still be centre left. May as well have the full fat socialist party in Labour.
The UK voting spectrum has changed markedly as a consequence of years of high immigration - a Palestinian Independent won a seat fgs. Lessons for all of us here.
The effects of FPP showing up . Liberal Democrats and the reform party got about the same number of votes , but the LPD's got 68 seats , the reform party 4. Labour got a seat for every 23000 votes , The reform were nearly a million votes per seat, the Greens 500 000.
I'm finding it quite amusing the number of my UK family and colleagues (from an old job) who have been vehemently pro changing from FPP to some form of PR in the past ... all of a sudden they've had a change of heart!
Reform may well implode, but equally seeing as they've come second in a number of seats if they can play the long game (particularly as Labour can presumably only be worse on immigration than the Conservatives, although even I'm beginning to doubt that) they could really stand to pick up the pace.
And people thought our last election was an arse kicking!
As of 0600 GMT, centre-left Labour looked on course to beat an exit poll forecast of winning 410 of the 650 seats in parliament, an astonishing reversal of fortunes from five years ago when it suffered its worst performance since 1935.
Why is the ECB engaging in USD swaps with the Fed?
USD211 mio seems a bit too large for "testing". Adjusting the dates will show you what happened this week.
https://www.newyorkfed.org/markets/desk-operations/central-bank-liquidi…
It does say above ‘GO THE ALL BLACKS,’ yes they will certainly need to go well. A big test for the new camp. One thought though. A wise South African rugby pundit likes to refer to the vital importance of the spine of the team. That is #s, 2, 8, 9,10,15. So how do the ABs rate accordingly in my opinion. 2, very good. 8, best player in the world but not in his best position. 9, older, slower and shorter in pass, and ready to pose. 10, light & fluttery.15, a natural 10 with only 2 tests experience. Big test for all of them and all the best for all of them.
I see Hooten has finally seen how dire a government Labour was; when the impacts start hitting a little closer to home
The finance minister was also asked why the Government had put aside $3.6m in the budget to appeal the High Court’s upcoming decision on the Nelson Tenths case.
Can't have land agreements withe the local Maori actually being honoured.
And people wonder why there are gangs are growing.
Really..go back a few generations and see we what would have happened if this particular deal had been honoured...probably a bit of a stretch for you.
The establishment of Nelson was agreed to by our families, the customary owners of Nelson, on the basis of two key conditions – that one-tenth of what would become the Nelson settlement would be reserved for us in perpetuity or forever.
"The second condition that all of our homes, our papakāinga, our sacred places, our wahi tapu and our cultivation lands would be protected from settlement."...
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.