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
ANZ cut many rates today. Details here. First Credit Union also cut rates. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
And, ANZ cut many TD and savings rates. And raised one. Details here. First Credit Union also trimmed some rates. All rates less than 1 year are here, for 1-5 years, they are here.
A LONG TIME TO SELL
As an icon marker for the struggles of the real estate industry, data out today shows that there is now 31 weeks of sales on average in the level of listed houses available for sale. That is a decade high. In Auckland, it is 40 weeks adn the highest since 2010. For Wellington it is only 17 weeks. In Canterbury it is 19 weeks.
AND WHEN THEY DO, IT IS FOR LESS
CoreLogic says the national median dwelling value declined for the fifth consecutive month in July, down -0.5% from June. Their home Value Index, the median value of all dwellings in New Zealand was $827,515 in July, from the record high of $982,918 set in January 2022. That is an average retreat of -$155,400.
'AI DETECTION' SCAM SITES FLOURISH
Beware of websites claiming they can detect faked AI generated content; they might be fakes themselves
INSURERS HAVE SETTLED 96% OF CLAIMS FROM SEVERE WEATHER EVENTS IN 2023
The Insurance Council of New Zealand (ICNZ) says insurers have now fully settled 96% of claims from the Auckland Anniversary floods and Cyclone Gabrielle. This is up from 91% claims settled in March. ICNZ Chief Executive Kris Faafoi says 112,746 out of 118,037 claims have been settled so far at a cost of $3.8 billion and the amount of claims reflect the severity of the events. He says up to $4 billion is expected to be paid out in claims from the two disasters. ICNZ has priced these two events as the largest insurance weather events in New Zealand's history.
NON-PERFORMING HOUSING LOANS NOT RISING
Latest RBNZ figures show the total of non-performing housing loans is hovering around $1.9 bln as mortgage holders look towards interest rate relief in the closing months of the year.
PRISTINE DEBT SECURITIES VERY POPULAR
There was a very well supported NZGB tender today attracting 120 bids worth more than $1.5 bln. Only 30 bids were accepted for the $500 mln on offer. The May 2030 $300 mln went for a yield of 4.02%, down from 4.53% at the equivalent tender five weeks ago. The May 2034 $150 mln went for 4.28%, down from 4.37% two weeks ago. And the April 2037 $50 mln went for 4.47%, down from 4.54% two weeks ago. More than $315 mln was bid on this last tranche from 31 bidders. But only two bidders won anything.
FEWER RISES
In Australia, some heat seems to be going out of some residential real estate markets. July prices actually fell in Melbourne, Hobart and darwin, and were no-change in Canberra from June. That only leaves Perth Adelaide and Brisbane wirth rising prices. Sydney rose too but only a minor +0.3%.
WHEN PRICES ARE LOW, SHIP MORE
The Aussie merchandise trade surplus rose in June to AU$5.5 bln. No surprises there. But interestingly there are stresses beneath the hood. The are seeing the falling global steel price hit some reasonably significant aspects of their terms of trade. Iron ores prices fell -9%, coal prices are down -13%. Gas prices are down -8%. Shipping more helped cushion the overall impact. And they were 'lucky' - the price of gold rose +12% offsetting some of the other falls.
MINING NOT SO SEASY
In Australia, American miner Albemarle said it is cutting hundreds of jobs at its WA lithium mining operation. Falling prices and reduced demand for lithium has necessitated the sudden move. The Aussies are shocked, I tell you, shocked.
SHARP TURN LOWER
In what is actually a sharp turn lower, the Caixin China General Manufacturing PMI slipped to 49.8 in July from 51.8 in June, missing market forecasts of 51.5. It was the first fall in factory activity in this survey since last October and the key change was a fall in new orders. Recall yesterday we noted the official NBS factory PMI also retreated, to 49.4 in that case.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed today across the curve. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 5.46% and a new 115 day low. The Australian 10 year bond yield is down -6 bps from this time yesterday to 4.10%. The China 10 year bond rate is unchanged at 2.15%. The NZ Government 10 year bond rate is down -8 bps at 4.32% and the earlier RBNZ fix was at 4.30% and down -10 bps from yesterday. The UST 10yr yield is down -9 bps at 4.05%. Their 2yr is now at 4.28%, so that curve is now inverted by -23 bps.
EQUITIES VERY MIXED AGAIN
The NZX50 is up +0.6% in late trade. But the ASX200 is up only half that, up +0.3% in afternoon trade. Tokyo has opened its Thursday trade down a very sharp -2.6%. Hong Kong is down -0.3% at its open. Shanghai is down -0.2%. Singapore is down -0.7%. Wall Street ended its Wednesday trade with the S&P500 up a strong +1.6%
OIL RISES
The oil price is up +US$2.50 from this time yesterday at US$78/bbl in the US, and at US$81/bbl for the international Brent price.
CARBON PRICE EASES SLIGHTLY
Today the carbon price slipped to $51/NZU today from $51.50/NZU at this time yesterday. That puts it -19% lower than the same day a year ago. Please note that we have a new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD UP AGAIN
In early Asian trade, gold is up another +US$33 from this time yesterday at US$2439/oz.
NZD FIRMER
The Kiwi dollar is up +½c from this time yesterday, now back up at 59.6 USc. Against the Aussie we are up +30 bps at 91.2 AUc. Against the euro we are +40 bps firmer at 55 euro cents. This all means the TWI-5 is now up at 68.8.
BITCOIN FALLS BACK
The bitcoin price is -3.6% lower from this time yesterday, now at US$63,977. Volatility of the past 24 hours has been moderate at just on +/- 2.3%.
USE OF AI
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88 Comments
Plenty of houses to chose from in a falling market, tomorrow it will be cheaper.... , Be slow.... dawdle, um and ah...
Its a buyers market and you have control....
FOOP dominates BBQ and water cooler conversations, along with team redundancies
Spruikers must be loading up here and driving very very very hard bargains.
-10% Dec 23 to Dec 24
Easy now. Your poor heart must be racing cause you're now name calling.
While you might regard yourself as an employers greatest asset, an increasing number are finding out they're not. Cheaper money will do little in the face of growing job insecurity. In sufficient numbers, people need to be confident to borrow believing the asset they're purchasing won't be even cheaper tomorrow. We are no-where near that point - let alone an attractive median price point.
The economy is turning to custard - that's why rates are dropping. From day one, Spruikers never grasped the true cost of bringing inflation under control. Now you're assuming a quick fire asset price recovery driven by another avalanche of cheap money - Naive.
Ironically more sense is made the less words poppy puts in, not more.
Super funny how none of the DGM squad ever mentioned how poked high rates would make it for so much of the population and economy.
We were told it'd be a quick surgical strike to make houses cheaper.
If you don't like the message, yeah why not complain about an edit or two, the length of a message or even name call too. Typical Spruiker behaviour ✅
Edit, Pa1nter, when DGM's ever did mention how poked the economy would become under high interest rates, you mentioned fire and brimstone 😆🤣
That's why you gotta like IREN - feet in both the rat poison and AI camps.
IREN up a solid 28% YTD (and 150+% if you timed it right) while ratty up a respectable 50%.
If cycles repeat themselves, now would appear to be a good time to accumulate BTC, instead of trying to pick lows and dumps.
Maccy B ripping on the 'education as export' rort happening in Aussie.
The ABS wrongly classifies all spending by anyone on a student visa as an export, even if the expenditures are funded via money earned by working in Australia.
Hilariously, student visa holders are the only category of migrant whose expenditure is treated as an export for the duration of their visa.
Therefore, if an international student Uber driver on their fifth year of their visa fills up with petrol, it is counted as an export. Whereas if a newly arrived temporary migrant on a skilled visa fills up with petrol, it is not counted as an export.
The World Bank’s migrant remittance data from Australia disproves the idea that international education is a significant export (or even an export at all).
https://www.macrobusiness.com.au/2024/07/australia-tops-class-in-intern…
The Aussies are shocked, I tell you, shocked. So are the Yanks
"We have a 30 year old family member who works on the assembly line building Peterbuilt trucks in Denton, Texas. (a PACCAR company) He has seniority and works the #1 shift. He was told not to come to work next week. Shutting down the assembly line for a week due to lack of orders. The only other time this happened in the last 7 years was during the Covid lock down." Link
UK's biggest pub operator in financial strife. Needs refinancing through to 2029!
The private equity owners of Britain’s biggest pub operator have pumped £250m into the company to avoid defaults on its debt pile.
As part of a refinancing of Stonegate, which has a £3bn debt pile, TDR Capital has given up a stake in the pub chain to one of its lenders.
Stonegate runs more than 4,000 pubs across the UK including the Slug & Lettuce chain.
It comes after Stonegate warned this year that there was “material uncertainty” over its ability to continue as it struggled to refinance £2.2bn of its debt.
The refinancing allows the terms for Stonegate’s debts to be extended to 2029, significantly easing pressure on the company as it recovers from the impact of the pandemic and cost of living crisis.
https://www.telegraph.co.uk/business/2024/07/31/britains-biggest-pub-co…
Japanese investors now given permanent tax relief on stock and fund investments up to JPY3.6 million (approx NZD40,000). Tax relief means no tax on dividends or capital gains.
https://www.jsda.or.jp/en/activities/research-studies/html/2024nisa.html
Plenty of Japanese companies to invest in and they return better than cash in Japanese banks.
Heck just look at the success of 7-Eleven. Westerners begging for the quality they offer.
In February, Bloomberg noted in a report that Ryuichi Isaka, CEO of 7-Eleven parent company Seven & I Holdings, believes the Japanese 7-Eleven model can be duplicated in the U.S. His focus is on bringing fresher foods to U.S. stores, including sliders, ham-egg-and-cheese french toast, and chicken salad sandwiches. The report also details Isaka’s hopes that stateside 7-Eleven offerings will eventually be able to rotate seasonally, as they do in Japan.
https://la.eater.com/2024/7/29/24209079/japanese-7-eleven-items-coming-…
I never said it was fairing ok, I said that there are still no real statistics saying otherwise. I’d define the current unemployment rate and GDP as “getting worse but still not terrible.”
I’m not really a fan of anecdotes, and we are still a long way from the stats I defined as a hard landing (and I believe you agreed with). Of course that could happen once stats NZ releases the next quarters unemployment and GDP figures, but many on here have been saying next quarter is going to be terrible every single quarter since the OCR went up (or even the last decade)
Go back 40 years and Browns Bay didn't have a single restaurant except for Cob n Co, you had to go to Takapuna to find a one. Things really changed there used to have Saturday shopping till 12 where you couldn't move on the mainstreet and the second hand shop was my favourite place. Good times in Brown Bay its changed a lot.
No, had no end of them, still got one in Tauranga, they seem to follow me. No problem with them at all, nice people they switch to English the second they see you. Tough country, they were glad to get out and appreciate New Zealand and no longer need to carry a 9mm.
I was on Lambton Quay in Wellington on Monday, after several years away. At 11am I could have fired a gun down the street and not hit anyone.
At 1pm it was busier but nowhere near how it was 15 years ago when you'd have to keep left to avoid being swept away by an oncoming tide of suits.
Aussies cutting back on McDs because it's too expensive.
https://www.abc.net.au/news/2024-08-01/mcdonalds-drop-sales-inflation-c…
It fairly consistently ranks above us for cost of living.
https://www.numbeo.com/cost-of-living/rankings_by_country.jsp
And speaking of maccas, those are dearer in Aus too: https://www.economist.com/big-mac-index
Lies. Aussie is a true blue fair dinkum paradise, everything's cheap, pay is huge, infrastructure rock solid, houses plentiful and affordable to rent or buy.
These are the trade offs of Ponzinomics P. Price inflation of a Big Mac in Japan has been comparatively benign.
When you allocate credit to speculating on asset prices instead of productive activity, you have to accept that price inflation is going to sting. Research Werner's Quantity Theory of Credit. Great departure point for your understanding of how it all works.
Not so P. According to OECD data, Japan has higher levels of labor productivity and multifactor productivity than NZ. Particularly on the latter, that should be no surprise.
https://www.oecd.org/en/publications/oecd-compendium-of-productivity-in…
I'm talking about it's trajectory
Japan’s labor productivity in 2022 ranked 30th among 38 member nations of the Organization for Economic Cooperation and Development, according to the Japan Productivity Center.
Labor productivity measures the output of goods and services a worker produces in a certain amount of time. Higher labor productivity will lead to economic growth and prosperity.
Japanese workers produced $52.3 dollars per hour in 2022, giving Japan its lowest ranking since comparable data became first available in 1970. Japan’s labor productivity improved 0.8% in 2022 from the previous year, but its ranking went down by two spots.
Russia's army is bleeding, and it's raising its recruitment bonuses to US military levels to draw in more men.
Russian media reported that new recruits would get a new signing bonus of 1.9 million rubles, or about $22,000 if they sign contracts with the Russian defense ministry.
https://www.military.com/daily-news/2024/07/31/russia-needs-men-so-badl…
FYI, this is enough for a cheap small apartment in parts of Russia.
I know a few names considering there future but no one falling over tomorrow, there is a lot of pain in joint developer/funder space.
Big names helicopters, big boats etc, but no news re tomorrow... I think it rolls upward, smaller go firsts....
losses at this level do not want to crystalise
These ones maybe?
Thought this is a great piece on the ‘Professional Managerial Class’ or the ‘Virtue Hoarders’. Wellington is full of these people.
essential viewing if you are basically of ‘the left’ but think it’s basically failing because it’s too concerned about identity politics and nowhere near concerned enough about the plight of the working class:
Yeah I have seen teams of older white male mainframe type developers decimated via ‘Professional Managerial Class’ skirts,
oh well it will all be ok TCS is all good. Funny mostly male 50 year old Cobal Programmers in India as well?
its much better customer experience now each meeting starts with a karakia
most of the displaced class is asset rich, no debt and just does not Give a shit....
its going to be fun watching many moved some funds to gold and BTC
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