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
Westpac has cut most of its fixed rates again today. Unity Money alos cut rates today, and it withdrew its 24 month FHB special (but kept its 12 month FHB special). The details are here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Westpac also trimmed most of its term deposit rate of 8 months and longer. It not longer offers any 6% rates. Unity Money also trimmed their TD rate offers. All rates less than 1 year are here, for 1-5 years, they are here.
SETTLING IN HIGHER
Just over 4000 people a month are gaining residence visas in 2024. While that is sharply less than the post-pandemic surge, it is settling down to about a third higher than pre-Covid levels.
SURVIVAL THREAT
The retail sector is reporting very tough winter trading. Almost 43% of retailers who responded to a Retail NZ survey were unsure whether they will survive the next 12 months, a substantial jump from 32% in the previous quarter, and also compared with the 36% recorded in the second quarter of 2023.
OPEN BANKING & OPEN ELECTRICITY "ON THE WAY"
The Government introduced the Customer and Product Data Bill today, which they say is an important step for improving the regulation of digital markets and encouraging competition. Their approach is giving more choice to consumers and creating a more competitive environment in which to do business. The focus is on both the banking and electricity markets.
DAIRY POWDER PRICES EASE FURTHER
There was a GDT Pulse auction event overnight. Basically prices fell. The SMP price was down a bit more than expected, down -2.8% from last week's full GDT event and taking it back to levels last seen in April. The more important WMP price was down too, down -1.5% in a lesser retreat than expected.
MORTGAGE PAYMENTS GET PRIORITY
The RBNZ released its Q2-2024 mortgage sector reconciliation today (C35) and it reveals some rather remarkable shifts. The amount of interest borrowers paid in the 90 days from April 1 to June 30, 2024 was $5.5 bln, up +30% from the June 2023 quarter. That is a diversion of $1.275 bln between the two quarters, money not available for the wider economy. Borrowers made scheduled repayments of $7.3 bln in the quarter, the most since this series started in 2014. Perhaps even more remarkable, borrowers kept up their excess payment levels, making another $4.1 bln over and above. And while this was no record, it is still well above the ten year average of excess payments in a quarter. Repayment deficiencies remain very low and nowhere near a record. Write-offs remain insignificant at just $2 mln for the whole $357 bln sector. This situation is very positive for banks and may be continuing; no wonder Westpac said today ""We continue to see fairly low numbers of customers struggling with cost of living challenges ...".
TAX CUT CALCULATOR
We are now just seven days until the personal income tax cuts come in to effect. You can find an estimate of how much you will save here.
NEW PROPERTY TAX TOOL
And the IRD is encouraging people to check out their updated property tax decision tool. They say it is a that tool helps to work out whether the sale of a property is taxable under any of the land taxing rules, including the bright-line test. Find it here.
SWAP RATES HOLD
Wholesale swap rates are likely to be little changed again today on international influences. Our chart below will record the final positions. The 90 day bank bill rate was unchanged at 5.54%. The Australian 10 year bond yield is up +4 bps from this time yesterday to 4.41%. The China 10 year bond rate is down -1 bp at 2.24%. The NZ Government 10 year bond rate is unchanged at 4.46% and the earlier RBNZ fix was at 4.41% and down -1 bp from this time yesterday. The UST 10yr yield is up +1 bp at 4.26%. Their 2yr is now at 4.46% is a notable fall, so that curve is now inverted by 'only' -20 bps.
EQUITIES MOSTLY LOWER
The NZX50 is up +0.2% in late Wednesday trade. The ASX200 little-changed in afternoon trade. Tokyo has opened its Wednesday trade down -0.2%. Hong Kong is down -0.8%. Shanghai is another -0.7% lower. Singapore has opened down -0.1%. The S&P500 was down -0.2% Wall Street in its Tuesday trade. The NZX50 looks relatively good in this group.
OIL DOWN FURTHER
The oil price is down more than -US$1 at just over US$77/bbl in the US (recall it peaked in early April at US$87/bbl), and now to US$80.50/bbl for the international Brent price (US$92/bbl was the April peak here).
CARBON PRICE LOWER AGAIN
Today the carbon price fell again, now $50.50/NZU and down from $52.30/NZU at this time yesterday.
GOLD FIRMS
In early Asian trade, gold is up +US$14 from this time yesterday at US$2413/oz.
NZD LOWER AGAIN
The Kiwi dollar is down almost -½c from this time yesterday at 59.3 USc. Against the Aussie we are holding lower at 89.9 AUc. Against the euro we are down slightly at 54.7 euro cents. This all means the TWI-5 is now at 68.4 and down -30 bps.
BITCOIN RETRACES
The bitcoin price is down -3.2% from this this time yesterday, at US$65,509. Volatility of the past 24 hours has been modest at just on +/- 1.7%.
USE OF AI
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77 Comments
NZ$ retreating & trading banks hauling back interest rates regardless, and ahead of the RBNZ’s position and forecasting, particularly that of only six weeks ago or so. Judging by recent utterances imagine the government itself is reasonably content to observe this progress. Problem will be that the former will invite inflation before the latter actually returns improved export earnings which may well cause more teeth gnashing & wailing amongst the RBNZ hierarchy.
Falling Kiwi = a lack of confidence in the Coaliton perhaps?
There is no back door to growth, we can cut rates to try and stimulate some sort of demand in the economy but no ones getting wealthier in real terms.
Welcome to the reality of progressive politics and economics - everyone is getting poorer but you can sleep at night knowing you are doing your bit to stimulate economic growth in another country.
Plenty of wannabes here were talking up the export boosts for our farmers that come with a weakening NZD.
Let’s start by understanding that we’re a trade deficit nation and more expensive imports will further depress our consumer confidence and worsen retail margins when the sector is already doing it tough.
I hope this little chart helps you understand that one month of trade surplus does not a trade surplus nation make!
Bitcoin Conference could host huge election showdown with Kamala Harris as potential speaker
That would spook Trumpy
Astute observation.
Yes, they are front-puppets, as was Reagan. Clinton was an insider... The neocon blob elite have run things for decades - but that had to falter at some point. Obama was a useful soft-front, Harris could be too - they cannot stand Trump not because of his human failings, but because he cannot be trusted to champion their interests.
Nothing new though is it. For example the ill-fated President McKinley, reasonably well respected and accredited by history, was completely smothered in the pocket of his backer Marcus Hanna. On the other side, at the time, just as much was the large identity of W R Hearst. At least the Kennedys largely financed themselves and that including buying the trade unions etc, votes. The whole damn political system, from community hall to the White House, exists and operates on corruption and pay back. What’s in it for me, what do I get back for giving you something. The republicans are backing Trump first and foremost because they view him as the optimum option to win power and turn the taps on, fill the troughs, for their waiting snouts.
Yeah, net migration has turned negative in recent months. Kiwi bank reported that incoming migrants are spending much less than the average consumer in NZ to begin with. The population Ponzi is shooting itself in the foot bringing people willing to bunk in small apartment with 7 other roommates.
You pay peanuts, you get monkeys!
Net migration negative. Cue the increase in spring listings that will come, more people delisting their for sale properties to try and rent them as they aren’t getting their unrealistic prices, and we have a recipe for further price drops and rent drops die to oversupply. It’ll be interesting to see what xmas looks like this year, buckle up.
Something's up in Canada. I read about the Bank of Canada's REPO crisis getting worse - $16 billion of liquidity injections today. This suggests one of the banks is in trouble, but it's unclear which one.
Then I see this:
Canada’s central bank has been shrinking its balance sheet for more than two years, withdrawing the extraordinary stimulus it provided during the COVID-19 crisis. Assets have fallen to around $273 billion from a peak of more than $570 billion as officials have allowed the bonds on their books to mature without replacement, draining liquidity from the country’s financial system.
https://financialpost.com/fp-finance/banking/cibc-says-bank-of-canada-m…
You know the report must be pretty bleak if Luxon is going to make a representative apology on the topic. He isn't doing it for the woke credit.
https://www.1news.co.nz/2024/07/24/state-care-has-key-role-in-creating-…
I wonder how many of the commentary here would have any understanding of the link to gangs...
The law-breaking law makers
The abuse in those institutions was one part of the story. The other part was the silencing, another form of abuse. Perpetrators silence their victims, and the state has tens of thousands of victims.
Looks like New Zealand Oil and Gas are cutting their last ceremonial ties after abandoning the NZX:
"ECHELON, THE NEXT RUNG ON OUR JOURNEY
New Zealand Oil & Gas (ASX:NZO) are pleased to announce that we will be hosting a live webinar on July 31st at 1:30pm (NZST) with Chief Executive Andrew Jefferies"
Perhaps like Japan
Japan has never seen so many tourists flood into the country so quickly.
The yen’s historic collapse, meaning a cheaper traveling experience for those with tourist dollars to spend, coupled with the post-pandemic surge in global tourism, has sparked interest in the nation like never before.
https://www.japantimes.co.jp/news/2024/06/29/japan/japan-tourism-focus/
Now the Brightline has been shortened, it's interesting the IRD have just updated their Property Tax Tool...how timely!
Going forward, under fiscal duress, I think it's more about attention being focused on the intention behind property purchases from the outset. To be assessed under the Intention Rule, there is no retrospective time limit.
We can only hope that their monitoring includes people like this member of the FB Property Investors group (this is far from an isolated post on this subject), where the focus is clearly on capital gains:
"Hi all. We are in the process of purchasing our first investment property using the equity in our owner-occupied home. The purchase price is $450,000, with a rental return of $590 per week. We need to top up approximately $100 a week and are satisfied with these numbers. What should we be aware of regarding taxes, etc.? We will be managing the property ourselves as it is in the town we live in."
Rents go up over time, mortgaages come down as they are repaid, and eventually you have a debt free income. How does that prove you were only in it for capital gains? The intention test means you intended to sell it at the time you purchased it - it does not mean that you cant change your mind, or that you have to hold the asset for infinity. It is not a capital gains tax - its an income tax.
More "seemingly" corrupt actions between KPMG and the Aussie public sector. Strange thing is that it's related to an agency related to corruption. Nobody wants to answer any questions or be held to account.
They're (KPMG and the public sector) just taking the pis now. Nothing can really seem to be corrected in terms of ethics.
The Department of Climate Change and Water has handed disgraced consultancy KPMG an opaque $62,800 contract in connection to the National Anti-Corruption Commission.
https://theklaxon.com.au/watergate-links-in-question-over-mystery-kpmg-…
I'm guessing here but I would imagine that the excess mortgage payments may be those who have yet to face the full force of the higher mortgage rates.
In which case this is extremely prudent. Amazingly prudent.
Something which Govts and Councils etc would never ever contemplate.
I can’t understand why anyone would be like that. I guess it’s just evolution, we weren’t as evolved back then. People will look back on current times and wonder how it happened too.
My mum always says things were better back in the old days. But then we hear the stories of almost all kids being beaten and neglected and abused and it’s hard to believe.
And of course, because of the trauma, it is almost impossible to become a good parent as a result. The harm inflicted lives through more than a single generation. Sadly, the story seems to be similar for most indigenous peoples - steal their land and then their souls. I find it all very overwhelming - those of us who have had the privilege of a blessed childhood owe so much to those who didn't. We can begin to pay back the harm through understanding, remorse, empathy and generosity in whatever way big or small that we can..
The meaning of life is children. Without children humanity has no meaning. Children are born in all innocence to love and trust their parents. That the pure honesty of that gift should be ignored and rejected is the most profound betrayal that could ever be experienced by any child and sadly, it is the setting for the unhappiness and trauma that more often than not, follows.
Roughly half of modern adults have no children - do they have no meaning to their life?
Babies are not born loving their parents. That develops over time. To grow up successfully from birth and for several years they need adults (usually their parents) who love them and especially to provide warm physical contact.
Adopted in the first six months children grow up no different from children with blood parents.
You Mum was right. 60 years ago my grandparents may well have worried about me and my siblings being beaten by other kids or caned by a teacher although they knew we'd not be killed. Now I am a grandparent and worry about my grandchildren's mental health, worried about self-harming, worried about children committing suicide. None of those troubled your Mum's generation. I feel sorry for modern teenagers - that was the age when my generation felt most free.
Ref the abuse: power corrupts and absolute power corrupts absolutely.
The problems always existed. You just hear about it more now. You hear about lots of things more now.
Road deaths is a good example. In 1990 there were about twice as many road deaths as there were in 2022. That doesn’t even take into account the fact there are far more cars now. The suicide rate is lower now than in the 90’s (any is too many) but it feels it is getting worse. Mental health is something people talk about now. Never heard of that years ago. It didn’t mean people didn’t have a lot of serious mental health issues. People just didn’t talk about it and suffered in silence.
You are right to an extent. Less was reported officially but 'suffered in silence' only applied to those in small isolated houses in unusually small families. Nosey gossip ruled unlike today where you have little idea of the people living in your neighbourhood. The data collected from the surveys where they ask people 'are you happy' are clear - young women in particular are dramatically less happy. As teenagers we had thin girls and plump girls but no anorexics and no clinically obese.
'A national disgrace': scale of state care abuse laid bare
I dare some of you to read the stories...
https://www.abuseincare.org.nz/reports/whanaketia/survivor-experiences/
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