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
The Cooperative Bank trimmed fixed rates today. That was followed by SBS Bank who also cut fixed rates, the most interesting being the emergence of a 5.99% fixed rate for two years fixed, a market-leading 2 year rate. Update: Westpac has also cut rates. We have more on this here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
The Coop Bank also cut TD rates. Update: Westpac cut too. A full review of all recent bank changes is here. All updated rates less than 1 year are here, for 1-5 years, they are here.
ABOUT TO HIT TARGET?
An influential RBNZ survey gives an effective green light to interest rate reductions with expectations of inflation from one to 10-year's time all falling markedly and towards the RBNZ's 2% goal.
VOLUMEs RETREAT
ANZ said card transactions among its customers remains very weak in July. Year-on-year growth overall was just +0.3%, suggesting sales volumes are still falling. Spending on durables, discretionary spending categories, clothing and categories related to the housing market remains particularly weak. However, spending in many housing categories lifted in July after falling sharply in June, they said
NZGBs GET GOOD DEMAND
More than $1 bln was bid in 97 bids for the $500 mln NZGB bonds available today. 49 were successful. Interestingly, the May 2041 bond, the one that 'failed' at the last attempt six weeks ago was very successful today with an average yield of 4.66% (and down from 5.05% at that last attempt.
REGULATORS & INDUSTRY SET VISION FOR INSURANCE SECTOR
A key group of New Zealand financial regulators has set what it's describing as a vision for the insurance sector, saying it wants it to be "forward-looking, fair, stable, competitive and efficient, promoting informed and confident participation by consumers and business." This comes from the Insurance Forum within the Council of Financial Regulators (CoFR). CoFR includes the FMA, RBNZ, the Treasury and Commerce Commission, and its Insurance Forum also features MBIE, the Natural Hazards Commission, ICNZ, Financial Services Council and Financial Services Federation. The FMA's Clare Bolingford, who chairs the CoFR Insurance Forum, says; "With the increased frequency of weather-related events, supply chain challenges and cost of living pressures, it is more important than ever that financial regulators and the industry come together to help New Zealanders understand and manage their risk...The vision will provide a common reference point for the Forum when discussing and prioritising issues, including insurance accessibility and affordability, insurance literacy, and building greater resilience."
BETTER RESULTS
Meanwhile Tower said its profits will be above its earlier guidance in part because weather/climate claims will come in low this year. And they are winning more business than expected.
$3.5 MLN FINE FOR ANTI-COMPETITIVE LAND COVENANTS
The Commerce Commission has won its case against Foodstuffs NZ for blocking rivals. The Wellington High Court has penalised Foodstuffs North Island $3.25 million for lodging anti-competitive land covenants with the purpose of blocking competitors. In handing down his judgment today, Justice Radich described the conduct as “deliberate” and “serious”. He said it reflected a deliberate effort to hinder rivals from opening new supermarkets or developing existing ones at three locations in the Lower North Island - Newtown and Petone in Wellington and Tamatea in South Napier.
SWAP RATES LOWER (?)
Wholesale swap rates are probably much lower at the short end. The better-than-expected signals from yesterday's HLFS is counteracted by today's inflation expectation data so plenty of influences and the latest likely drove them lower. Our chart below will record the final positions. The 90 day bank bill rate is actually up +9 bps at 5.44%. The Australian 10 year bond yield is up +6 bps from this time yesterday to 4.14%. The China 10 year bond rate is unchanged at 2.15%. The NZ Government 10 year bond rate is down -3 bps at 4.36% and the earlier RBNZ fix was at 4.34% and up +5 bps from yesterday. The UST 10yr yield is up +2 bps from this time yesterday at 3.92%. Their 2yr is now at 3.96%, so that curve is now only inverted by just -4 bps.
EQUITIES MOSTLY TREAD WATER
The NZX50 is down -0.8% in late trade today. The ASX200 is down -0.3% in Thursday afternoon trade. Tokyo has risen a minor +0.2% at its open. Hong Kong is up +0.3%. Shanghai is down -0.1% in its opening trade. Singapore is up +0.1%. Wall Street closed its Wednesday trade down -0.8% after it could not sustain another rise.
OIL UP
The oil price is up +US$2.50 from this time yesterday at just under US$72.50/bbl in the US, and at just under US$78.50/bbl for the international Brent price.
CARBON PRICE STILL ON HOLD
Today the carbon price is still holding at $52.50/NZU today little-changed from yesterday. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD UP A LITTLE
In early Asian trade, gold is up +US$7 from this time yesterday at US$2390/oz.
NZD HOLDS
The Kiwi dollar has risen a minor +10 bps from this time yesterday, now at 60.1 USc. Against the Aussie we are also holding at 91.7 AUc. Against the euro we are-10 bps softer at 55 euro cents. This all means the TWI-5 is at still at 68.8.
BITCOIN HOLDS
The bitcoin price is little-changed from this time yesterday, now at US$57,345. Volatility of the past 24 hours has been moderate at just on +/- 2.8%.
USE OF AI
No articles on this news service are produced with AI. Occasionally we use AI to derive images. They are always identified in the attribution.
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70 Comments
Big day in the crypto space. The case between the SEC and Ripple appears to have come to a close. A federal judge ordered Ripple to pay a civil penalty of $125 million stemming from allegations that Ripple improperly sold its XRP token to institutional investors without proper registration as a security. The SEC had initially sought $2 billion in penalties, making the final ruling a significant reduction of approximately 94% from the original claim.
This case will be be single largest civil case in crypto. Ripple didn't win outright, but the significance is important - the judicial system did not let state agencies bury Ripple or XRP.
Ripple's token XRP of course went up 20% today. And honestly speaking, I don't see it as having much value. But the timing of this is great and don't be surprised if XRP can 10x+ in the next bull run before crashing into insignificance.
https://finance.yahoo.com/news/ripple-labs-ordered-pay-125-200549311.ht…
Watched the Working Group podcast last night featuring Cameron Bagrie and Damien O'Connor. Was reasonably enjoyable as they discussed some issues like the carry trade upheaval. Also, the only person who was able to refer to the existence of the Ponzi was Cameron, who usually steers clear from this kind of discussion. Damien O'Connor seemed particularly woeful on most issues.
The Bomber guy's intro to this podcast is superb.
If any of us asked 33 people down at the pub for their opinions on any topic, I suspect the consensus of their opinions would not reach any news outlets whatsoever. This cannot be the sort of information RBNZ uses to build their policies. If it is, it explains quite a few of their decisions over the last few years.
Finally a flicker of commonsense...
"Three Wellington City councillors have walked out of a meeting and refused to vote on a plan to downsize a controversial roadworks project.
The Regulatory Processes Committee on Thursday voted to drop the number of raised pedestrian crossings on Thorndon Quay from five to two after Waka Kotahi pulled its funding."
https://www.rnz.co.nz/news/national/524530/wellington-councillors-walk-…
Only road deaths matter to the Left. If you die while waiting for an ambulance to get there, or your house burns down with you trapped inside it, that doesnt matter. All that matters is that the drunk Mayor doesnt get bowled staggering across the Wellington streets after a big bender.
Around a year ago NZTA quietly increased their cost of a death 250% to $12.5M pp, this is used to "justify" their virtue signalling project wishlist. More than double Oz & UK
https://forum.effectivealtruism.org/posts/4eXJ2rEi5AGgDjRr3/new-zealand…
In the same change they also raised the cost of congestion by 250%. That was more virtue signalling to the god of RoNS i suppose?
It raises the value we place on saving time stuck behind a wheel driving to and from work, from $7.80/hr to $19.53 an hour – an increase by a factor of 2½. That figure increases to as much as $36.18/hr if that’s what it costs to avoid being stuck in congestion.
According to JPM, 75% of the global carry trades are now unwound. And just like that, we're back to normal.
Three-quarters of the global carry trade has now been removed, with a recent selloff erasing this year’s gains, according to JPMorgan Chase & Co.
Returns in Group-of-10, emerging market and global carry trade baskets tracked by the bank have fallen about 10% since May, quantitative strategists Antonin Delair, Meera Chandan and Kunj Padh wrote in a note t clients. The moves have wiped out the year-to-date returns and significantly cut into profits accumulated since the end of 2022.
https://www.moneycontrol.com/news/world/jpmorgan-says-three-quarters-of…
Indeed, the Bank of Japan is the start and the end of these market dislocations.
Bank of Japan 1. Prints insane amounts of money. 2. Becomes largest holder of ETFs in the Nikkei, incentivizing investors to purchase Japanese ETFs borrowing in yen. 3. Yen falls to 40-year lows 4. BOJ blames "speculators". A classic. 5. BOJ spends billions stabilizing the yen 6. Yen rises, market declines, margin calls jump, Nikkei plummets. Black Monday. You think this is "free market". https://en.macromicro.me/charts/26280/j Link
J P Morgan Chase is a 5 times felon - it's a Frankenbank that is allowed by banking 'regulators' to house under one roof, a trading casino that has pled guilty to multiple felony counts, and trillions of dollars of derivatives that remain largely a black hole to regulators.
It is also, after Citigroup, the second highest owner of New York Fed shares - any announcement by this serial criminal organisation should be taken with an enormous sack of salt.
J P Morgan, just as they did in 2008, once again is integral in orchestrating yet another pump-and-dump financial crisis, only this time it will be 2008 on steroids. The Fed has zero tools left to deal with a crisis which is largely caused by their own major shareholders - AGAIN!
JPMC were in the crap again in 2019 when the repo market blew on Trump's watch - before any of us had even heard of Covid. They became the second to largest repo borrower from the Fed after Nomura - the Fed, BTW, is the largest money spigot on the planet.
Nomura was the Japanese bank that was handed on a plate the Asian division of Lehman Brothers when they went belly up - and what was a major cause of the 2008 GFC? - the derivative casino.
The derivative total notional value which was estimated at ~$56 trillion in 2002 is now estimated to be between $2.5 - $3.7 quadrillion - as much as 37 times total global GDP. Meanwhile, the global derivative casino appears to have increased 66x in around 20 years.
... paraphrased from the WSOP link, and back to 2019 - you can C&P this into your search box...
wallstreetonparade.com/2024/04/new-york-will-not-conform
"In that fourth quarter of 2019, JPMC was the custodian of $1.4 trillion of MBS for the Fed, along with its massive bailout with New York Fed repo loans... adjusted for term, these loans amounted to $2.59 trillion!"
In reality, the traditional repo market no longer exists because none of these banks trust one another or the collateral that they post to secure these loans - without the Fed, repo would cease to exist.
The Western world and all fiat currencies now reside in fairy tale land. I could quote at least a dozen reasons why a major implosion is imminent.
And the $35 trillion public debt which amounts to 125+% public debt:GDP is by no means the main problem either, even though it reveals that the country is technically insolvent - they have to borrow more and more just to service their existing debt.
Total US debt, when you include unfunded liabilities, is over 600% (CEIC figures), NZ's is too, but our commentators can only talk about our public debt which is less than 1/12 of total debt. Most of the big Western economies are between 600% and 1200%. Ausy is by far the best of a very sad bunch at ~250%.
This debt death spiral is not being addressed and in 2023 the US Govt spent 38% more than it collected, resulting in a $1.7 trillion deficit. It took nearly two centuries to accumulate $1 trillion of debt - now it increases at around $1 trillion every 100 days.
Case rested
Colin Maxwell
Right on cue, Pam Martens asks the same question that I just did - IOWs, JPMC and Nomura who played a starring role in the 2019 repo crisis appear as an integral part of the cast in this current carry trade debacle.
https://wallstreetonparade.com/2024/08/we-charted-the-plunge-and-reboun…
Just in the next two years in the US alone, there are $15-20 trillion of new debt instruments that have to be sold to keep the global Ponzi scheme going. It is a combination of CRE refinancing, Govt deficit spending, and rolling over of maturing debt - most Western countries are in similar situations.
Expecting this debt to be sold at lower interest rates is delusional. These sellers of debt are competing with one another and they can only compete by offering a higher yield. Eventual debt death spirals where total debt levels become unsustainable for currencies and economies, are the flip side of fiat currencies.
No one with half a brain cell would buy long-dated US debt - the yield is negative in real terms anyway, and their value at maturity for $100K invested today, would be lucky to buy a loaf of bread.
The organic pressure on the Fed is to pay more interest in order to keep selling U$ debt instruments. 4-week T-bills are the ticket and this is what Berkshire Hathaway is doing, meanwhile keeping their liquidity intact and their powder dry for the day that everyone makes a bee line for the elevators - they own more ($234 billion) treasury bills than dah Fed...
https://www.msn.com/en-us/money/markets/warren-buffetts-berkshire-hatha…
The reverse repo market is papering over a very dangerous situation, in which U$ banks sell overnight their excess cash for a juicy rate of interest.
When I studied eCONomics in the early 70's the biggest cause of bankruptcy was investing short and borrowing long. This works equally disastrously in the macro sphere as well. This is a global Ponzi scheme and it will end as all Ponzi schemes do - by running out of suckers.
Luxy making friends - such a statesman and icon for NZ
Paul Goldsmith, who approved the removal of te reo from the letter, said he didn’t think the minister concerned would know what Aotearoa meant.
- An Australian politician says he knew the word Aotearoa from a Split Enz song.
- This comes after te reo Māori words were removed from a Matariki invite, with Christopher Luxon calling Australians “simple” people.
It would, I think, have been good sense in introducing that holiday to ditch the monarch’s birthday observance. Just as appropriate as it was to ditch the royal titles etc. An interesting thought perhaps, with regard to the latter, is that every National PM except for Jim Bolger has availed themselves of a knighthood whereas in equivalent territory, post WW2 as far as Labour, only the lesser lights of Rowling, Palmer & Ardern have succumbed to the privilege. Have not included in that though, the distinguished and long service of Sir Walter Nash as he was hardly a lesser light as properly recognised by the Holyoake government.
No, what Luxon said was Ïn my dealings with Australians it always pays to be incredibly simple and clear and use English" so he was implying they are simple people.
...strong NZGB demand, swaps lower
The interpolated mid IR swap rate, for today's 1.75% 15/05/41 government tender yielding 4.662%, was - minus 38.936 bps at 4.2726%.
The Global Monetary System Is Reliant on Swap Spreads (Here's what they are)
RBNZ Government Bond Repurchases
Government bond Total to date (m) 15 Apr 2025 480
Transaction date Settlement date Bond repurchased Face value ($m)
07 Aug 20240 9 Aug 2024 15 Apr 2025 400
Reserve Bank to start NZ Government April 2025 nominal bond repurchase programme
From the latest Transpower consultation document to increase the buffer on the contingent storage:
'We are consulting on this draft decision now, and to tight timelines, because we consider the risk of electricity shortage and/or shortfall near term is sufficient that bringing forward access to contingent storage is necessary'
Finally an admission from Transpower that we have a serious problem! Until today spring inflows would save our bacon.
syndicated bloomberg wrote it
https://www.nzherald.co.nz/business/kiwis-workers-flock-to-australia-fo…
Yeah I gathered you were including me in your sample.
Some pay is more in Aus. But then they have a greater percentage of people on minimum wage.
Some things are cheaper in Australia, and some are more expensive.
Will someone automatically be better off moving there? Possibly not.
Fundamentally, my perspective is if what you're doing isnt working, changing what you're doing will likely yield better results than the geography you're doing it in (assumes you're living in a first world country and not somewhere like Lebanon).
Of course it’s a generalisation, but I think both data and anecdotes show quite clearly that many roles / professions pay significantly more than in NZ, plus employers pay 6% Super. And outside of Sydney, rents are lower in the big cities than Auckland. Fuel is a lot lower, and groceries probably 10-15% lower. If you are a sports fan, a lot of sport is on public broadcast so no need for Sky. What’s more pricey? I am struggling to think… (and I lived there for a few years). I think beer might be slightly pricier. It’s not insignificantly cheaper to fly to the rest of the world
I am not sure why you seem so determined to keep pushing this very weak argument, apart from your desire to be a perpetual contrarian.
11.5% super paid by employers, rising to 12% 1 July 2025.
healthcare is a boondoggle, but better access to medical drugs and devices here.
Private health insurance is a rort, but earning $130k base (before allowances) means it’s better to pay for a basic cover rather than the additional medicare levy at the end of tax year.
car rego price is offset with $1.85/l petrol and no 6 monthly WOF. Cheaper to get car serviced as well.
far more opportunity to shop around for groceries. ALDI has a good selection. Local butchers have better, tastier meat, often at lower prices than Colesworth.
NZ lamb leg steaks can be purchased for $15/lg compared with the usurious $38/kg NewPakWorths charge in NZ.
overall, much better in Australia.
Currently in Brisbane. The place is booming. The city is busy, restaurants are packed every night of the week, shopping malls are heaving, the atmosphere is fantastic.
Don't need to even earn higher wages - you'll save thousands of dollars a year in council rates alone.
Visas for yoga teachers but not tradies in Aus, lol:
https://www.macrobusiness.com.au/2024/08/visas-for-yoga-teachers-but-no…
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