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
Kiwibank has raised its 4 and 5 month TD rates to 5.00% for both. That puts it four month offer the highest of any main bank for that term. But others already had this rate for a five month term. All rates less than 1 year are here, for 1-5 years, they are here. But we have corrected an error in our Business Savings table page. (We had the Westpac rates wrong. Sorry to them.)
PRESSURE EASING
Supplier cost increases continue to slow, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index showing an average 2.7% more than a year ago in what suppliers charged Foodstuffs supermarkets for goods. That tis down from a +8.3% rise in June 2023. Although global shipping prices are higher and continue to cause concern for future input cost pressures, reduced import costs, softer fuel prices, and lower global food prices are all encouraging signs of a continued moderation in cost pressures, they noted.
'STAY ON HOLD'
The NZIER's 'shadow board' view of economists (6), lobbyists (1), and a financial CEO (1) generally recommended that the RBNZ keep the OCR at 5.5% in the upcoming Monetary Policy Review on Wednesday (July 10). The weaker growth and a slack labour market, along with the continued easing in annual CPI inflation, suggest that the OCR increases to date are reducing inflation pressures in the domestic economy. However, with domestic inflation pressures remaining elevated, Shadow Board members were of the view that the RBNZ should remain cautious about moving the OCR for now. One member (BNZ's Stephen Toplis) considered that there is justification for a cut in the OCR given the deteriorating economic outlook.
KEEPING AN EYE ON THE SHADOW BANKING SECTOR
RBNZ today said it will 'monitor developments' in the private credit sector, including its 'linkages with the financial system'.
EXPANDING GEOTHERMAL CAPACITY
Contact Energy said its new 174 MW Tauhara geothermal plant near Taupō is nearing completion and has passed its 30-day reliability test. This new facility is in addition to the recently nearly completed 51 MW geothermal plant, Te Huka 3, also near Taupō, which is expected to go online in Q4-2024.
EASING BACK
A little air seems to be going out of the rising Australian housing markets - an indication from their lending data shows. Owner-occupier loan demand fell -2.0% in May from April to now be up +12% year-on-year.
AN AUSSIE ADVENTURE
And in case you missed it, global realtor Frank Knight and Bayleys NZ (both privately owned), have teamed up to buy the previously listed Australian realtor group McGrath Limited. McGrath as 110 offices. Frank Knight has about 60 offices in Australia. Bayleys has 100 offices here. As a sign of support, Direct Capital has bought back in to Bayleys which will allow them to fund the purchase. Direct Capital is no stranger to Bayleys having previously been an investor, but quit that holing in 2022.
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 125 days now. The Australian 10 year bond yield is down -6 bps from this time Friday at 4.41%. The China 10 year bond rate is up +4 bps at 2.31% as the PBoC swings into action. The NZ Government 10 year bond rate is down -5 bps at 4.72% and the earlier RBNZ fix was at 4.65% and down -8 bps from Friday. The UST 10yr yield is little-changed from this morning at 4.29%. Their 2yr is now at 4.62%, so the curve is still inverted by -33 bps.
EQUITIES MOSTLY NEGATIVE, EXCEPT WALL STREET & TOKYO
The NZX50 is down -0.7% from Friday in late trade. And the ASX200 is down -0.5% in afternoon trade. Tokyo is up +0.2% at its open and again pushing new all-time highs. Hong Kong is down -1.3%, and Shanghai is down -0.6% to open their day's trading. Singapore is down -0.2%. Wall Street is signaling a +0.9% rise via the S&P500 futures when they open tomorrow.
OIL SOFTISH
The oil price is down nearly -50 USc at US$82/bbl in the US, and at US$86/bbl for the international Brent price.
GOLD OFF SLIGHTLY
In early Asian trade, gold is a little softer since this morning, down -US$7 at US$2382/oz.
NZD HOLDS
The Kiwi dollar is holding from this morning, still at 61.5 USc. Against the Aussie we are still at 91 AUc. Against the euro we are marginally firmer at 56.8 euro cents. This all means the TWI-5 is little-changed, still at 70.6.
BITCOIN FALLS FURTHER
The bitcoin price has fallen another -2.9% from this morning's open, now at US$55,275. Volatility of the past 24 hours has been high at just over +/- 3.8%.
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21 Comments
A long way from the heady days 10 years back when John said he was going to make his company into the biggest real estate company in the World! Started as McGrath Goodhope in Paddington.
"But the stock flopped, falling 12% from its $2.10 offer price on its first day of listing, and it later became a target for P/E firms. McGrath’s stock tumbled to as low as 18¢ a share.....Here was a man who, for better or worse, had built a career on good publicity. From one excursion to America he discovered the benefit of self-promotion, of making a name and building it. In lightning speed..."
Japanese media picks up on the fact that "real wages" have decreased for 26 consecutive months, the longest in their modern economic history, despite relatively strong wage growth. Arguably people were better off when wage growth was stagnant.
https://news.yahoo.co.jp/articles/d2ededdbea4b35ff044e4dfb6ae446e0ce942…
US media starting to use 'housing crash' in their narratives via market experts. Redfin reporting 201,000 homes for sale in Florida in May - 40% increase yoy.
The U.S. housing market is already entering a "crash stage" in multiple cities across the country, according to expert Nick Gerli, CEO and founder of real estate analytics firm Reventure Consulting.
Talking during a recent episode of the Thoughtful Money podcast, Gerli said that while the national housing market is still "in a record bubble," with home prices significantly higher now than they were before the pandemic, many metropolitan areas are experiencing price drops on a month-to-month basis and even year-over-year.
https://www.newsweek.com/housing-market-entering-crash-stage-multiple-c…
Yet prices remain at record highs.
https://wolfstreet.com/2024/06/25/the-most-splendid-housing-bubbles-in-…
Gotta love Wolfie Richter. Notice Florida not in the hot / not hot markets. Then I saw this comment:
the bigger problem in miami, and florida in general, is that there isn’t enough income to support current housing prices. that was a relic of the pandemic when people working remote moved to wherever they wanted, including places they had never lived before.
as full remote jobs are becoming harder and harder to get, the miami market is less and less sustainable, as nowhere near enough jobs have moved in in high finance and other expensive roles to support housing prices there.
a lot of sellers are still asking for aspirational pricing, and most are not getting it, but some are, which gives hope to the rest.
the condo hoa and insurance costs are just more fuel on that fire.
Makes you realise, as opposed to conveniently forget, what distortion and disruption covid caused, short and long term, globally. Without doubt and by a country mile the most impacting export China has ever mustered and about which they offer neither acknowledge nor regret. Is it any surprise then that nations are viewing them askance, and withdrawing.
It was US sponsored and designed gain of function research....
As presented at Senate Homeland Security Committee Investigation into Covid-19
I am certainly not a socialist but the older I get I think there is argument that the people or government own those industries that provide basic needs of people gas,electricity etc
i hate to say it but capitalism needs to be reworked otherwise we will all suffer
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