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
ICBC reduced all of its fixed home loan rates today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
And ICBC reduced most of its term deposit rates today too. We know that more banks will be reducing TD rates tomorrow. Update: Westpac has both raised and cut some key TD rates by up to 20 bps. More soon. All rates less than 1 year are here, for 1-5 years, they are here.
MANIPULATOR CAUGHT BUT TO REMAIN ANONYMOUS
The FMA has warned an unnamed individual for engaging in share market price manipulation with Sharesies accounts. The FMA concluded that the individual likely breached the Financial Markets Conduct Act by engaging in trading which was likely to have the effect of creating a false or misleading appearance regarding the price of shares for a listed company. The alleged conduct occurred over two weeks in November 2021. During that period, the individual used his partner's Sharesies account to place eight sell orders for the shares. During the same period, he used his own Sharesies account to place 11 buy orders and his partner's account to place another four buy orders. A number of the buy orders had higher volumes than the prevailing best ask volume and higher price limits than the prevailing spread. These order terms allowed the key buy orders to clear the volume at the existing best ask price, then trade into the volume at the next higher price step. As a result, market spread and/or the last trade prices for the shares moved higher on at least 10 occasions.
FINCO CAUGHT IGNORING CCCFA
The Commerce Commission has warned Aotea Finance for non-compliance with CCCFA regulations. "... inconsistent application of policies by staff ..." seem to be the cause here, rather than actions by the Company generally. The right policies were in place and generally followed. But there weren't procedures to ensure this was carried out by all.
AIR NZ WITHDRAWS FROM CARBON TARGET
Air New Zealand has become the first major airline to scrap its ambitious 2030 carbon emissions reduction targets, saying it is unachievable now. But it says it remains committed to the 2050 target it signed up to. Essentially, delays by aircraft suppliers to its fleet renewal plan means the measures they have put in place without new aircraft won't be enough for 2030. More generally, without taxpayer subsidies, the green transition struggles. "The rent is too high."
ONLINE CASINOS GET GREEN LIGHT
The Government has agreed to a high-level approach to regulating online casinos designed to minimise harm, support tax collection, and provide consumer protections - or so they say. Hard on the heals of Entain taking over the TAB and ramping up betting promotion, now online casinos are getting a local boost. Apparently harm minimisation can only go hand-in-hand with organised increases in harm. The lessons from regular casinos remain unlearned.
WAITING FOR BULLOCK
In Australia, they are waiting for the Q2-2024 CPI data to be released on Wednesday (1:30 pm NZT). Markets expect that to come in at 3.8% and up from 3.6% in Q1. And they will release the June month inflation indicator at the same time where a 3.8% rate is expected, down from 4.0% in May. This data will go a long way to setting the RBA stance expectations for their Tuesday, August 6 MPS review.
AUSSIE RESIDENTIAL CONSTRUCTION IN THE DOLDRUMS
Meanwhile, Australian building consent levels for June came in weak, led by low apartment and townhouse construction intentions. In fact, the levels for these dwellings that are not stand-alone houses are now down at levels last seen in 2011. Over the past 12 months, there have been a total of 162,892 dwellings approved, compared to 177,936 in the 12 months prior, representing a -8.5% decrease. This too is the lowest number of dwellings approved on a June year basis since 2011/12.
A HEADLONG RUSH OUT OF HOUSING RENTALS - INTO AIRBNB
As you probably know, resistance is growing to the AirBnB-style short-term accommodation industry that seems to cannibalise rental for residents in favour of higher-yielding casual tourists. Venice and Barcelona are at the forefront of the resistance. The scale of the issue in Europe became clear overnight with the EU releasing data that shows these short-term booking rose a remarkable +28% in Q1-2024 over Q1-2023. It is an issue that is just starting (despite this industry pushback).
SWAP RATES EASE SLIGHTLY
Wholesale swap rates are probably softer again today at the short end. Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 5.45% and a new 115 day low. The Australian 10 year bond yield is up +3 bps from this time yesterday to 4.33%. The China 10 year bond rate is down -5 bps at 2.13% in an unseemly dive for them. The NZ Government 10 year bond rate is up +2 bps at 4.43% and the earlier RBNZ fix was at 4.37% and unchanged from yesterday. The UST 10yr yield is unchanged at 4.18%. Their 2yr is now at 4.40%, so that curve is now inverted by -22 bps.
EQUITIES MOSTLY LOWER, THE NZX50 THE EXCEPTION
The NZX50 is up +0.6% in late trade. But the ASX200 is down -0.6% in afternoon trade. Tokyo has opened its Tuesday trade down a full -1.0%. Hong Kong is down -1.3% at its open. Shanghai is down another -0.5%. Singapore is up a minor +0.1%. Wall Street ended its Monday trade with the S&P500 up just +0.1% and far less than expected.
OIL WEAKER
The oil price is down nearly -US$1.50 to just over US$75/bbl in the US, and down a bit more at US$78.50/bbl for the international Brent price.
CARBON PRICE FIRMS
Today the carbon price rose to now $51/NZU and up from $50/NZU at this time yesterday but down from $53 a week ago. Please note that we have a new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD LOWER
In early Asian trade, gold is down -US$13 from this time yesterday at US$2379/oz.
NZD HOLDS
The Kiwi dollar is holding from this morning's open, now back at 58.8 USc and down -20 bps from this time yesterday. Against the Aussie we are softish at 89.8 AUc. Against the euro we are fractionally firmer at 54.4 euro cents. This all means the TWI-5 is now just under 68 and really, little-changed.
BITCOIN FALLS HARD
The bitcoin price is -5.0% lower from this time yesterday, now at US$66,001. Volatility of the past 24 hours has been high at just on +/- 3.1%. A large sale of Silk Road BTC holdings is behind today's fall.
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67 Comments
Wholesale swap rates are probably softer again today at the short end.
One year NZ Treasury Bills were issued today at 4.75%.
So another cut back of TD rates anticipated tomorrow by the major banks. Is it now not quite obvious that the banks are doing what they want and in advance and regardless of the RBNZ’s viewpoint, announcements and signals. In other words the RBNZ is being virtually sidelined. Wonder why and how that should happen.
Fair enough. That’s pretty arguable. Even so it is hard to dismiss an inkling, for want of a better word, that shortly we are about to witness another roller coaster event by the RBNZ as far as the OCR. The sequence of late so to speak being, crash dived to the bottom, blown up to the top, and crash dived again.
Jim, I have 100% confidence in monetary policy!! If you want to crash a high private debt economy where loans are fixed short-term (to make sure banks can extract rent) then hiking rates is guaranteed to work beautifully. Aggressive rate hikes, start stopwatch, 18 months later... 'kaboom!
Monetary policy doesn't do much else obviously, but it is undoubtedly brilliant at supporting asset price booms and jobs busts!
Read their site its not a TD, its a Term Investment...backed by home loans to people who couldn't get a loan from a bank. I wouldn't lock in $ for long term before the deposit guarantee is in place. I do however have $ in their on call account.
EDIT just saw previous comments..so what they said!
I am pleased that there is good carbon pricing covered on this site. While many may think it is a crock off whatsit, there are hundreds of farmers that rely on carbon to put on fertilizer and other inputs to sustain productivity. Many don't realize that to maintain our income we need to import nutrients. Sad fact is the current income on farm does not support even maintenance nutrient requirements, as far as hill farms go .As I have pointed out before, the NZ agricultural industry is reliant on imported fertilizer. The NZ dollar dropping looks good for export but we lose in the long run.
I would even go as far to say that most farms require off farm income to survive. Yes I know there are farms that are doing well, but most have economy of scale or diversity. That diversity is often forestry.
And to add NZ needs China and other Asian countries to survive. Don't think USA and the EU will see us right, as they produce everything NZ does in ample supply. We also have Sth America with identical production but on huge scale.
Sorry, my rant tonight.
Markets looking nervous? One seller of a block of 100 million Fortescue Mining shares in Aussie today.
https://www.marketindex.com.au/news/fortescue-shares-sink-9-on-massive-…
Very interesting. Got out of Forty in early 2020 after many years of poor performance and after they paid a special div. Share price boomed during Covid - go figure - and still up 125% in past 5 years. Being punished YTD and down 36%.
FMG is undoubtedly an interesting barometer of Aussie fortunes going forward. My conspiracy theory is that iron ore prices only holding up because they serve as collateral for loans in China. In terms of construction activity, the price doesn't make much sense, even considering the issues at Vale.
Only ignorance would still rate 'costly, in money terms, at this late stage.
And they aren't 'renewables', they're 'rebuildables'. Dams, PV panels, windmills, grids. All physical infrastructure, all not 'renewable'.
Can rebuildable be built using rebuildable (and leaving enough surplus energy? Nobody has proven they can.
And we're half-way through the stock of fossil energy; the best half is gone.
You understand 'doubling-times"? Work it through.
Some news about Forty.
Vanguard and BlackRock are selling too. Vanguard sold 16.8 million shares (AUD336 million) on Friday. The seller today is Capital Group who have been rotating from iron ore to copper substantially over the last 12 months.
Selling: Vale, Fortescue, Barrick
Buying: Freeport, Grupo Mexico, First Quantum, Antofagasta, Newmont
The bitcoin price is -5.0% lower from this time yesterday, now at US$66,001. Volatility of the past 24 hours has been high at just on +/- 3.1%. A large sale of Silk Road BTC holdings is behind today's fall.
Plenty of psyops at the moment with the ol' rat poison and the Dems moving their coins to an unknown address. What they don't seem to understand is that the public can watch what they're up to. They can't be all sneaky and coins can't be diverted into Hunter Biden's wallet without people knowing what's going on
If they want to dump it into the market, they should go ahead. Distribute the coins to the public.
Osaka City made it very difficult for Airbnb because hotels were feeling the pinch. Very tightly regulated there now. Osaka has gone through a massive tourist boom. Remember getting a nice little place before Covid for about USD30 per night - free pocket wifi included. Got a business hotel next to Osaka Castle Park even cheaper.
I trust this means that the climate zealots will now refrain from flying.
Chloe Swarbrick commuting to Wellington by bus or train. Yeah right.
Also, Sam Stubbs still needs to get to Sydney or NYC more often than your typical suburban dweller.
Public servants commuting by bus between cities is a positive thing. Of course, aint going to happen.
Hah, yeah cause only someone old wouldn't subscribe the belief that current EVs are a cure all.
They have a use case, but currently that's not for everyone. And the financial numbers are usually terrible, compounded by terrible depreciation as the prices are being slashed and obsolescence is fairly rapid.
It'll get better though.
Yes the financial numbers are terrible. You can power your normal car forever on the interest on the amount the of money you will lose on your EV in the first year, which is about 40k or half of the 80k you need to by one with average features. Then you have to deal with the terrible performance and all the road user charges. I’m looking forward to the new Toyota multi fuel engine, that seems to be the logical replacement for traditional ICE (petrol) and the EV market.
The ICE petrol engine doesn't need to be replaced by anything else, it just needs to be made smaller with a turbo and cars need to be much smaller and lighter. The whole market has gone in the wrong direction with SUV's, its a disaster, bigger heavier cars with terrible drag coefficients have taken over the roads. The market is driven by what people want to buy and as long as there is no change, car makers just give them what they want.
Silver Fern Farms released its 'Net Carbon Zero by Nature' beef range - grass-fed beef products certified as Net Carbon Zero by Nature. Apparently, the equivalent of 100% of end-to-end emissions has been absorbed by trees growing within the farms where the animals were raised.
This is supposedly the result of brilliant marketing. Shoppers in the US had no idea what Net Carbon Zero by Nature even means.
They are between a rock and a hard place, and you need to stop offloading your own guilt.
Fossil energy is leaving us - and there is no scalable replacement. I've been pointing this out, steadfastly, for years.
Therefore those who turn fossil energy into electronic digits - like Air NZ and dairying in current form - are temporary arrangements. Exponential growth being what it is, we are looking at both being history, well prior to 2050 - on depletion alone, let alone competition for.
Those who immediately point to others, should study the psychology of why they just needed to do so. Call it PD.
I read an article recently and there is a new betting or prediction site where you can bet on anything including climate change, emission targets, EV take up. The author implied he would bet that nothing would change with regard to climate, emission targets will be tossed out, EVs will fail. Also that 82% of the economy is powered by fossil fuels, and the world economy will be substantially bigger (growth) and that the same percentage of it will be powered by fossil fuels (indicating growth of fossil fuel use over the coming decades). His opinion was that those pushing for alternatives will soon meet reality head on, and lose. AirNZ seems to be one of the first to meet meet reality. Europe are about to dump their EV rules…..the dominos seem to be lining up to fall.
There isn't the fossil energy to grow, from this rate of consumption.
Sheesh....
And the surplus energy is declining (declining EROEI and increasing entropy both contributing) so we see universities, hospitals and council services, all in trouble. Which is about to get worse. And worse.
Triage time.
I will bet that it wont be the end of the species - or even life as we know it - because of a shortage of FF - we will be using something else before FF is all gone
This doesnt negate the argument that we are over using lots of raw materials and thats all negative over time
You miss the point.
Money is keystroke-issued fiat-levered debt. Sans energy to do the work, what is that debt worth? Diddly-squat. And less energy per time (rate of supply of joules) means less underwrite - equals inflation. Why would I crave worthless tokens?
Sigh. How many times????? Why is it so hard for some folk to understand?
Grattaway - of what EROEI? We will end up on renewable energy, using rebuildable technologies. But that won't be this level of throughput - not by several orders of magnitude.
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The alleged conduct occurred over two weeks in November 2021. During that period, the individual used his partner's Sharesies account to place eight sell orders for the shares. During the same period, he used his own Sharesies account to place 11 buy orders and his partner's account to place another four buy orders. A number of the buy orders had higher volumes than the prevailing best ask volume and higher price limits than the prevailing spread. These order terms allowed the key buy orders to clear the volume at the existing best ask price, then trade into the volume at the next higher price step. As a result, market spread and/or the last trade prices for the shares moved higher on at least 10 occasions.
I would struggle to see churning in a low liquidity security as "manipulation."
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