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
No changes to report today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ cut TD rates today, and to the lowest in the market for some terms. Westpac also cut, as did ICBC and Heartland Bank. AMP followed. All updated rates less than 1 year are here, for 1-5 years, they are here.
SMALLER HOUSES & LESS BUILD-COST PRESSURE
New dwelling consents have fallen back to 2018 levels and build costs are stabilising except for retirement units. The average size of stand-alone houses is shrinking however as the affordability of McMansions fades.
POURING LESS
Ready mixed concrete poured rose in Q2-2024 from Q1-2024 but is still trending lower. Of the major urban centers, Wellington's trend lower is steepest, Auckland less so, and Christchurch is maintaining a level trend. Nationally, Q2-2024 was -9.0% lower than Q2-2023. Regionally, the sharpest falls were in Waikato, Bay of Plenty and Hawkes Bay. Only one region, Northland, showed an increase, up +13% from the same quarter a year ago.
MORE CORRUPTION UNCOVERED
A former Auckland Council building inspector has pleaded guilty to bribery and corruption charges. Appearing in the Manukau District Court, Nicholas Bright admitted to 21 charges of corruption and bribery of an official. The sentencing hearing is scheduled for 20 November 2024. In March 2024, the SFO filed charges against Bright and one other person, a director of a construction company, who also faces 23 charges of corruption and bribery of an official.
PLUS COVID SUPPORT FRAUD
Meanwhile, the IRD is moving ahead identifying an prosecuting fraud that arose out of the pandemic emergency support. Here, here, and here.
EXPENSIVE CAPITAL
BNZ has raised $450 mln in a perpetual preference share issue for funding that qualifies for T1 capital. They will be paying 7.28% for the first six years.
CHINA'S CPI CHANGE STAYS VERY LOW
In China, their consumer inflation picked up from an ultra-low +0.2% in June to +0.5% in July. But food prices are still showing some deflationary effects. Although overall they are u a tiny +0.2% year-on-year, that is only because of a +20% rise in pork prices (from very low levels a year ago). Beef prices are down almost -13% in the year, lamb prices down more than -6%. Milk prices are down -1.9% on the same basis.
CHINA'S PPI STILL DEFLATING
Chinese producer prices are still deflating, down -0.8% in July from the same month a year ago. That is the same fall recorded in June.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed today. Our chart below will record the final positions. The 90 day bank bill rate is back down -9 bps at 5.35%. The Australian 10 year bond yield is down -2 bps from this time yesterday to 4.12%. The China 10 year bond rate is unchanged at 2.15%. The NZ Government 10 year bond rate is down -4 bps at 4.32% and the earlier RBNZ fix was at 4.26% and down -8 bps from yesterday. The UST 10yr yield is up +6 bps from this time yesterday at 3.98%. Their 2yr is now at 4.02%, so that curve is still only inverted by just -4 bps.
EQUITIES ALL HIGHER
The NZX50 is up +0.6% in late trade today. The ASX200 is up +1.4% in Friday afternoon trade. Tokyo has risen +1.6% at its open. Hong Kong is up +2.0%. Shanghai is up +0.4% in its opening trade. Singapore is also up +0.4%. Wall Street closed its Thursday trade up a very enthusiastic +2.3% leading to most of the other rises.
OIL UP
The oil price is up +US$1 from this time yesterday at just on US$75.50/bbl in the US, and at just on US$79/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 AGAIN
In early Asian trade, gold is up +US$34 from this time yesterday at US$2424/oz.
NZD RISES
The Kiwi dollar has risen +20 bps from this time yesterday, now at 60.3 USc. Against the Aussie we are down -30 bps at 91.4 AUc. Against the euro we are +20 bps firmer at 55.5 euro cents. This all means the TWI-5 is up +20 bps at 69.
BITCOIN JUMPS
The bitcoin price has jumped +6.8% from this time yesterday, now at US$61,243. Volatility of the past 24 hours has been very high at just on +/- 5.2%.
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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82 Comments
I was a bit nervous but due to my equities (9 percent drawdown over the week - yeah I know that is a Tuesday in crypto).
My cryptos are a light-ish bag. But I'm careful to be farming plenty of USD stable coins. They give nice yield plus a fast entry point if I need.
I was happy selling at 70k. I am happy buying at 52k. Just like last time I was happy selling at 42k and getting back in the teens. (Not financial advice) I did not sell anything in the crash - although I rotated a bit (more BTC / SOL - less degen stuff)
I'm not sure what you think is inherently good about being a store of value.
Baseball cards are a store of value
Old comic books are a store of value
A 1991 Nissan Silvia, is a store of value.
But the value of all of these, including BTC, is market orientated. The actual utility, does not define the value.
Random question but why is this Polkinghorne trial such a big deal in the news (not trying to downplay the crime, it just seems to be constantly headline news)?
Obviously the crime is horrific and I’m not trying to take away from that. It just seems to be so omnipresent, at least on the Herald site.
ANZ Melbourne weren't interested when FMA designated me as a retail bond buying customer previously bidding in NZDM government bond tenders at min $1 million clips. NZ really needs to emulate US Treasury Direct where citizens can participate at best rates for $1000 min.
I had a mate who used to work for ANZ who borrowed 500k from them at the peak of the GFC on a revolving credit acc, he lent it to them for around 9.95% on a 5 year deal like this, within months the OCR was cut and he was winning all the way in.... It made him smile every day
Some big increases to visa charges:
https://www.immigration.govt.nz/about-us/media-centre/news-notification…
Why is work progressing ... really slowly, on Auckland's highest apartment block?
https://www.nzherald.co.nz/business/paused-work-on-new-zealands-tallest…
there are more cockroaches?
impossible there are two at most
some will have had option FX protection but the clock is ticking and its more expensive now, some will be purchasing there JPY currency now, even tho asset realisation in far currency will take some time.
This trade is bigger then ben hur, and most of the time its been played with someone else's money, leveraged to hell and with possible margin calls.
I think that if US Commercial RE is involved there may not be enough money to pay back the outstanding..... normal story in any market, small door someone yells fire...
Heard a recording of the NZ AI Forum. Same old jump on the bandwagon (limited stock left!). Not denying the power of AI, just that the industry oversells the benefits and timeframes.
Some good stuff like freeing up the limited skill workers from administrative burden for more productive pursuits. Also on the need to watch out for mass unemployment lower on the corporate ladder.
NZ "gen AI" company Yabble snapped up by YouGov.
Shares in YouGov soared over 17 per cent after the polling and market research company said it has acquired New Zealand-based generative AI company Yabble in a £4.5m cash deal and slightly notched up its guidance.
The data analytics firm said on Tuesday it has bought Yabble for £4.5m in cash and a three-year earn-out contingent on revenue targets, with sellers reinvesting part of the proceeds into YouGov shares.
https://www.cityam.com/yougov-snaps-up-yabble-in-4-5m-deal-as-market-re…
"There's Just One Problem: AI Isn't Intelligent, and That's a Systemic Risk"
There is an even more pernicious result of depending on AI for solutions. Just as the addictive nature of mobile phones, social media and Internet content has disrupted our ability to concentrate, focus and learn difficult material--a devastating decline in learning for children and teens--AI offers up a cornucopia of snackable factoids , snippets of coding, computer-generated TV commercials, articles and entire books that no longer require us to have any deep knowledge of subjects and processes. Lacking this understanding, we're no longer equipped to pursue skeptical inquiry or create content or coding from scratch
On July 9, 2007, Chuck Prince, then the CEO of Citigroup, made a comment that was to become notorious: “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing.” Prince meant well.
All was going so well, the floor was mad like, then that DJ the BoJ dropped the floor, for a full 6 seconds no music, now we back to hard house again, but the mood of the party seems to have changed.
Having watched several market events in my years, they always unfold in waves. Like its just subprime, or its just the carry trade etc etc.... once doubt about the market starts to be questioned people return to fundamentals to recheck valuations, like what are the earnings per share? or what's the debt rations.... the night before while a well mad time was being had on the dance floor , these sort of things didn't seem to matter as much.
You just saw act one... lets see what act two brings.
He tends to stay away from those types of trades, instead he buys low, sells high and swoops in on ball crushing equity rescues at the bottom from his cash pile.
Much like the boys at Renaissance Tech , buffet seems to speak markets language first and English as a second language. Perhaps he has their help.
Bloody good analysis, he is really good
subbed to his emails...
The greater risk is that progressively rising profitability has been the primary catalyst driving market valuations higher this cycle. If this central pillar gets knocked out, the premium valuations of U.S. large-cap stocks could be left with little support.
TLDR: things are expensive based on ever growing profit expectations, and if the earnings do not appear things will get cheaper quickly. The things getting cheaper quickly would be the large caps, where your Kiwisaver has been concentrated.
he reminds me of the guy who used to run the macroman blog way back
none of the cheap out of the money puts are as cheap as they where a few weeks ago
He works for Hussman Funds, do you rate them?
Recent performance seems sus, but is that because they perform better when things go to shit?
https://www.morningstar.com/funds/xnas/hsgfx/performance
$3.50 a box for free range.
However, I suspect the cheap price is due to oversupply, as hospo is down, and not buying as many eggs.
So in another 6-12 months, they'll be raising less chickens, and the price will go back up.
Same thing happened early on during COVID, meat was cheap, because restaurants were closed.
I suspect there is a reason why the Dems have not granted unlimited media access to K Harris like perhaps they did to Bill Clinton.
I think there is a long way to go before the election, Harris has to demonstrate that she can hold a debate and is actually able to run the USA.
There is an economic reality to face. Trump is equally exposed he can meltdown as well.
its like betting on a rugby world cup final before they have named the teams. I think I will place my bets the night before the game thanks.
until then I am too busy betting on NPC, Rugby champs , out of the money puts on aussie banks, and other gambling like things
maybe the TAB will run a promotion
Yes, turnout in the swing states is the key. and i think his "handlers " realise Trump winding up Kamala supporters just makes them more likely to vote for her , and actually vote.But he won't be able to help himself, Vance no better.
He'll definitely lose the overall vote , but can still win if a few crucial areas swing his way..ATM they are 50/50 . But the trend is towards Kamala. And now Walz to swing moderates.
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