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. It seems unlikely there will be changes before Wednesday; no-one really knows what the RBNZ decisions will be. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here either. All updated rates less than 1 year are here, for 1-5 years, they are here.
SLOWING TO A TRICKLE
New building work is slowing to a trickle as more projects are either cancelled or put on hold. The latest building industry survey paints a grim picture, with 21% of firms now operating at less than 50% capacity.
A THREE YEAR LOW
Infometrics says their Foodstuffs Grocery Supplier Cost Index (GSCI) rose +2.4% for what suppliers charged Foodstuffs supermarkets for goods in July from a year earlier. This increase is the slowest since November 2021. In July 2023 it was rising +7.5% pa.
NOT IMPRESSED WITH ITS 'REFORM'
Ratings agency S&P is warning that the Government's water reform policy may weaken LGFA’s financial stability and increase council borrowing costs.
SHINING A LIGHT
In Australia, access to an active ASIC investigation reveals a lot about how some in their payday lending sector operate.
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 up +1 bp at 5.36%. The Australian 10 year bond yield is up +1 bp from this morning at 4.08%. The China 10 year bond rate is up a sharpish +5 bps at 2.25%. The NZ Government 10 year bond rate is up +2 bps at 4.32% and the earlier RBNZ fix was at 4.27% and up +1 bp from Friday. The UST 10yr yield is unchanged from this morning at 3.94%. Their 2yr is now at 4.06%, so that curve is slightly deeper at -12 bps.
EQUITIES EASE HIGHER
The NZX50 is up +0.4% in late trade today. The ASX200 is up +0.6% in Monday afternoon trade. Update: Tokyo is on holiday today (Mountain Day) but was up +0.6% on Friday. Hong Kong is up +0.3%. Shanghai is up +0.1% in its opening trade. Singapore is down -0.6% at its open. According to the futures market, Wall Street is expected to open +0.6% on Monday on the S&P500.
OIL ON HOLD
The oil price is unchanged from this morning, still at US$76/bbl in the US, and at just on US$79.50/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 Friday. There seems to be little trading activity at present. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD EASES BACK
In early Asian trade, gold is down -US$34 from this morning, now at US$2427/oz.
NZD LITTLE-CHANGED
The Kiwi dollar has changed little, up only +10 bps from this morning, now at 60.1 USc. Against the Aussie we are also up +10 bps at 91.3 AUc. Against the euro we are still at 55 euro cents. This all means the TWI-5 is little-changed from this morning at 68.8.
BITCOIN FALLS
The bitcoin price has fallen -2.7% from this morning, now at US$58,702. Volatility of the past 24 hours has been high at just on +/- 3.0%.
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.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
71 Comments
Shady as private equity in Aussie. Millbrook has always been a mystery to me. For ex, a loan Millbrook is advertising in Melbourne, the firm has told investors that the borrowers are worth “well over $100 million”. The $2.3 million loan, with a 15% interest rate, will give lenders a mortgage over a house in Toorak which it says is worth $21 million. The first mortgage is held by La Trobe Financial, which has advanced $12.8 million already.
Despite public declarations that overdue loans are under control, a bit of digging, the fund has AUD58 mio in loans past due date. However, they still seem to be making out like bandits.
Despite the overdue loans, David Lyall, Millbrook’s managing director, had a successful year, according to the ASIC filings. He collected a $225,500 salary and Millbrook paid out $3.5 million in dividends to a company called David Lyall Holdings, up from $1.4 million in the same period the year before. Millbrook paid $108,525 to another company Mr Lyall controls, which it sub-leases its office from. The company’s net profit rose from $3.1 million in the 12 months to the end of March 2023 to $5.3 million for the same period this year.
The majority of Millbrook’s revenue, or $9.3 million, came from fees, compared with $1.4 million from interest payments. Of the fee revenue, about a third is made at the origin of the loan, and the rest from ongoing management fees.
https://www.afr.com/companies/financial-services/overdue-loans-swamp-pr…
Haven't we seen all of this many times before, even in Australia? Yet, friends and family etc still get roped in to lending money to the businesses. For example:
"It was New Year’s Eve when the email hit the inboxes of numerous friends of David Hunter Campbell, many of them living in the well-to-do enclaves nestled around Clontarf and its beachy environs on Sydney’s north shore. Sent by Campbell’s wife, Cassandra Campbell, the email was direct but hard to absorb. “I am totally devastated to have to tell you that David has informed his solicitor that there is likely to be a shortfall of funds within his business that you have invested money in,” she wrote.....What really tore people apart was the broken trust – the realisation that years, sometimes decades of friendship with Campbell had become a sham, and they had been used... to funnel millions of dollars into David Campbell’s own pockets. (NB:Campbell died 'suddenly' shortly after the email)
https://www.afr.com/wealth/investing/castle-rock-collapse-i-realised-he…
Millbrook does get quite a bit of attention, particularly from the AFR. There is a relationship with hospitality baron Jon Adgemis whose whole life can be described as flying by the seat of his pants.
https://www.afr.com/companies/financial-services/investors-realise-priv…
https://www.afr.com/property/commercial/lenders-tried-to-sell-jon-adgem…
Indeed. And these are but a few of them...Off course, we have one for the ages in Ivan's brother Anthony; Ivan and his wife Marina being among the really, really wealthy of Australia.
" A 53-year-old Australian who is a Wall Street washout, a world-class con man and an inveterate fabulist with a bogus CV and persona— fancifully purports to be an heir to a 600-year-old European olive oil fortune. What’s more, he entices people to attend his summits under often-dubious pretences, not infrequently requesting a cut of the action from presenters. And finally, this self-proclaimed maestro of “family wealth” is actually a thrice-married deadbeat dad who has been repeatedly jailed in Europe and is wanted in the US after threatening to harm his own wife and family;
https://www.vanityfair.com/style/2022/10/inside-wealth-conference-con-m…
Another oxymoron. Millbrook private equity lends to Australia's wealthy people. If they are wealthy, why would they need high fee, high interest loans? The obvious answer is that they are not actually wealthy, but poor bullshitters faking wealthiness by using these loans to carry on their "rich" lifestyle instead of paying back people they owe money to. This is where due diligence comes in. If the returns are higher than "normal", it will be because the risk is higher than normal. The due diligence is finding out what that risk is, and then make an investment decision, rather than trusting one of these bullshitting conmen.
When they say "the rich are different" they mean the rich do things differently to us mere mortals. Now say I was the owner of a billion dollar company. I dont want to sell the shares in my company to raise funds to buy a $20M house because that (a) crystallises a CGT tax bill and (b) reduces my holding in and control over the company. So what I do is go to a lender and ask for a $20M loan secured over the shares in my company (or other assets). I now have $20M to spend, tax free, and still have all my assets and company shares. The interest on the loan is probably tax deductible as well depending on the structure set up to borrow and buy it (eg. a company buys a house and borrows the funds and the owner "rents" it from the company thus keeping it away from any creditors in case things go belly up).
A 53-year-old Australian who is a Wall Street washout, a world-class con man and an inveterate fabulist with a bogus CV and person
What a wild story. Thx for posting this. Anthony's still rocking and rolling in Dubai. His Linkedin profile suggests he doesn't just suck in the uber-wealthy.
https://www.linkedin.com/in/anthony-ritossa/?originalSubdomain=ae
He's also in cohorts with Blockchain / AI fraudster Nick Ayton who the braindead CNBC go to for advice.
NZ has products that have been issued to "wholesale" investors with mezzanine type security as well. It's not just the Aussie market. If you look at secondary exchanges such as Syndex you will see a lot of these "wholesale" investors trying to offload units in their investments at par when they are obviously not worth that any more. However it seems to me that they haven't really understood the product in the first place so don't really understand why they can't bail out at par. At the margin these things are pretty messy.
"Ratings agency S&P is warning that the Government's water reform policy may weaken LGFA’s financial stability and increase council borrowing costs."
Quelle surprise.
Let's be clear here, the Nats & Act want our water supply, like our electricity supply, privatized. And the best way to do it is to load Councils with debt and then utilise the woeful local body voter turnout so a tiny number of voters can swing the result in their favor. (Same model as was used all over 'Merica and was then exported to other countries.)
That and the emergency was largely made up. Some councils are good at looking after their waster assets, others are not, i.e. Wellington (Green disaster in progress). Rate payers from well run areas would have ended up subsidizing poorly run areas, and the whole management handed over to unelected incompetents. I think that is why the country voted against that sort of stupidity.
I was against it purely because of those puerile "ah stink as water g" radio ads they had on. Who signed off on that utter drivel. Yes, I appreciate that's cutting off your face to spite your nose - but that's my democratic right and I choose to occasionally indulge in it (somewhat tongue in cheek comment warning)
A truth, too often ignored. The councils that stuck to their knitting, invested in and maintained basic services such as those of water in and out, will not be affected, will carry on as before and congratulations to all of them and their ratepayers. Those ratepayers not in such a position, when viewing the vainglorious vanity projects that were prioritised instead, by their respective councils, should have some justifiable hard questionin in mind.
Not sure what sort of stupid introducing a beneficiary traffic light system in the middle of a recession is but...........
sure .. so many jobs, so easy to get one....
I have a nephew who has comp sci, 10 weeks looking and a friend, their son has science degree, also tough to find work right now.
Maybe harder with no skills, facial tats and a record...
Yep. From what I have heard the bottom has fallen out of the IT market big time (with regard to work at least). Many of the startups are falling over, and many hired from the US and had people working from here. AI is about to collapse as well, just like BlockChain already did.
There are plenty of unskilled jobs around still, but you are right, facial tats generally = no job, as does a record. But, no-one made them plaster nonsense on their faces or commit crimes, so I guess it does make it very hard, but that is really on them.
Meanwhile its all TipTop in the SME space
https://www.nzherald.co.nz/business/small-business-confidence-hits-reve…
Economic pressures continue to drive unprecedented stress and burnout for small business owners while confidence declines, new research has found.
The RFI Global research, commissioned by Prospa, showed earlier post-Covid optimism was in reverse amid ongoing uncertainty in New Zealand’s business climate.
According to the research of 500 Kiwi small- and medium-sized businesses (SMEs) less than half (48%) feel confident about the future of their business over the next year, a drop from 53% in November 2023.
A total of 70% reported feeling stressed and burnt out. For retailers it was 85%.
They cited economic challenges (29%), cashflow issues (27%), and pressure/responsibilities of being a business owner (19%), as the top three reasons for stress.
Adrienne Begbie, Prospa New Zealand managing director, said the figures were confronting but it wasn’t surprising there was a correlation between economic challenges and the wellbeing of business owners.
“What we’re seeing are the effects of inflation and the cost of living, and the impact this has on business owners’ overall wellbeing,” Begbie said.
“Inflation and cost of living have meant that many small businesses just aren’t seeing the amount of customers that they usually would. For SMEs, any dip in customer spending is a serious issue, directly impacting their cashflow.
“What’s more, these challenges come at a time when supply chain and labour costs are also on the rise due to inflation.”
The research also showed in response to recent economic challenges, SMEs are more inclined to increase prices (42%) and use personal funds to cover business expenses (19%).
Owners have also made significant personal sacrifices for their business. More than half have had to cut back on personal expenses (51%), 36% are struggling to save for personal goals, 36% have had to postpone or cancel travel plans, 34% are sacrificing hobbies or leisure activities, and 32% are spending less time with family and friends.
“Business owners should never be forced to choose between their wellbeing and personal life, and the success of their business,” Begbie said.
“Business owners should not hesitate to seek external support – see what government grants and rebates are available, check out industry insights on how other like-minded businesses are dealing with current economic conditions, and seek professional advice from a financial adviser.”
SMEs were feeling more confident about the future of their business over the next 10 years (49%), up from 45% in November 2023.
“It isn’t the first time our country has faced a recession, and it won’t be the last. What this tells us is that we always bounce back,” Begbie said.
Begbie said rate cuts will provide some relief by easing the cost of living, but the effects won’t be immediate.
“While lower rates will help reduce the burden of everyday expenses, Kiwis still don’t have the disposable income for nice-to-have purchases, especially with other costs, like energy, expected to rise. However, the Christmas period should offer a much-needed boost for businesses.
“With rates potentially easing just as consumers naturally start shopping for the holidays, this could be a very [welcome] season for small businesses.”
Winter spending woes
All the recent data is pointing to extremely weak consumer spending appetites, making for a slow and challenging environment for businesses right now.
The tough conditions have led to a number of business closures in the first half of 2024.
Figures released from payments network Worldline last week showed consumer spending with core retail merchants (excluding hospitality) reached $2.82 billion in July, down 2.6% compared to July 2023.
“Spending across the country was down on last year in June and continued to be down in July, although there was a small school holiday effect bump seen within the month,” said Worldline NZ’s chief sales officer Bruce Proffit.
“The third week of July – the second week of the school holidays – was the worst of the month for core retail merchants in the major regions.”
Things aren’t any easier in the hospitality industry, with spending in the major regions (Auckland/Northland, Wellington, and Canterbury) and the “rest of New Zealand” down in July by 5% and 10% respectively when compared with a year ago, according to Worldline.
Retail NZ chief executive Carolyn Young said the challenge for retailers is to survive until 2025.
“Cashflow is critical and some retailers have indicated they don’t think they will have the cash to buy forward stock, putting their businesses at risk,” Young said.
Retail NZ’s latest quarterly Retail Radar, a survey of its members, showed both confidence and sales were at even lower levels in the 12 months to June than earlier in the year.
Almost 43% of respondents said they were unsure whether they will survive the next 12 months, up from 32% in the previous quarter and higher than the 36% recorded in the second quarter of 2023.
Additionally, 71% of retailers reported that they did not meet sales targets for the quarter.
Inflation was the top issue (80%) in the June quarter, up from 62% in the first quarter of the year.
Xero’s Small Business Insights data this month covering the June quarter showed sales fell 8.3% year on year, the largest monthly fall since May 2020.
This week Stats New Zealand will release electronic card spending figures for July. In June, retail spending fell for the fifth consecutive month.
A THREE YEAR LOW on still rising grocery prices. Strange how we celebrate prices only going up 'a bit' these days.
I've switched from Nutri-grain back to no-name cornflakes. Much better as the former had loaded on the sugar content over time - very fulfilling being able to put as little or as much on as I like now :-). Funny how we get 'captured' in expensive ruts.
Now I need to look into making my own bhuja.
Yep. Last time I went (I don’t get to go often), there were 6 good Avos for $4, broccoli $1, rump steak, $16kg, pork roasts $7 kg, cheese $12kg, bacon $16kg….and TimTams $2 a packet. Woolworths too. Cheese was 10-12 when Helen Clark was around. Breads a bit expensive but it’s not all bad.
it hasn't been this good since...............
Darren Watson - Planet Key
The visual at 1 min 54 sec is interesting, with Sir John taking a bath in a hydro damn as protesters protest below
even the satire was better back then.... must have all left for strayla
Nice one, bhuja is delish. Im getting seeds for this gardening season to sprout shortly and spreading the compost early to allow the soil to adapt to the new introduction. Never a better time than now to get into the garden and have a crack at growing something edible.
SHINING A LIGHT
In Australia, access to an active ASIC investigation reveals a lot about how some in their payday lending sector operate
Mark Swanepoel was also responsible for a low income predatory lending business in NZ as well. Pretty Penny Loans. Tied himself in with second hand car dealers mainly around Christchurch/Kaiapoi and installed engine disabling devices to deactivate the car the second a loan payment was missed. Charged debtors $250 a time to reactivate the car, once the loan payments were caught up.
Not necessarily. Missed loan payments incur penalty interest rates which doesn’t increase the cost to everyone else. Penalty interest + $250 each time is usurious.
also, it didn’t matter if people rang in before the payment date to extend the timeframe for a day or two. The car still got disabled. Hardly a virtuous outfit.
its interesting how many Swanepoel’s there are working in the finance sector in NZ.
Interesting to see household debt servicing (as % of income) is at the same level as seen between 2012 and 2015:
https://www.rbnz.govt.nz/statistics/key-statistics/household-debt
It puts into context this nonsense about rates being too high. This is historically quite a normal level of debt servicing despite the squealing from certain bank economist. The aberration was the last decade when servicing costs collapsed.
Some people still see NZ as the place to be...(possibly until they can get into Oz)
"In the 11 months to 31 May 2024, a total of 2220 people claimed refugee status in New Zealand.
Half of these asylum seekers – 1108 people – were from a single country: India.
Before the Covid pandemic, the number of refugee claimants averaged only 400 people a year."
https://www.stuff.co.nz/politics/350366985/refugee-claims-have-exploded…
Interesting that article on people claiming refugee status. Governments should keep the citizenry informed about how they do actually decline a large number of people. A lot of folk likely think that it is very easy to rort the system. The government is trying to crack down on scams too, where people are milking government coffers with bogus charity and education outfits.
Isn't India the world's largest democracy, and we variously see articles in the news about their burgeoning economy, acceleration of their space program etc.
On that basis, what on earth conceivable reason is there for somebody from India to claim refugee status?
I get places like Gaza, Ukraine, Sudan etc with actual humanitarian crises and wars, but what's the equivalent for India?
If that's legit, we can't be far off allowing refugees from the UK who might have written some mean tweets after a few cans of Stella, lest Sir Keir wants to show his statesmanship on them with 20 years at His Majesty's pleasure. I mean if we're going to allow people in from functioning democracies, why not?
Also absurd that we allow refugees from anywhere an interim working visa - as the author points out, this just encourages more applicants.
Isn't India the world's largest democracy, and we variously see articles in the news about their burgeoning economy, acceleration of their space program etc.
On that basis, what on earth conceivable reason is there for somebody from India to claim refugee status?
I get places like Gaza, Ukraine, Sudan etc with actual humanitarian crises and wars, but what's the equivalent for India?
Despite India being a democracy, and having a rising economy, it's also a mostly Hindu country with a decent amount of persecuted minorities.
https://www.amnesty.org/en/location/asia-and-the-pacific/south-asia/ind…
I felt quite sad to see today national going after the beneficiaries. Obviously they are too weak to Chase corporations like the banks supermarket and petrol stations insurance companies who are all making billions of dollars but feel safe chasing the beneficiaries who have bext to nothing it doesn't a good way forward to me
"According to a report on beneficiary trends commissioned by MSD, a “work-ready jobseeker in 2019 was expected to spend an average of 10.8 years of their working lives on Jobseeker. By 2022, that figure had increased to 13 years,”
https://thespinoff.co.nz/the-bulletin/19-04-2024/20000-more-on-jobseeke…
There's other people doing their jobs
https://www.stats.govt.nz/news/net-migration-remains-near-record-level/
Wait until congestion charging kicks in...we will all be feeling sorry for each other when we get the first toll bill.... Ive gone out of my way to avoid toll roads and know its very likely I am going to have to set up an account with NZTA or some other provider just so I can go to work.... Having seen some of the rejected proposals via AA and council its likely I will be crossing multiple zones just to go to work....I would rather see car registration fees go to the moon .... Likely many folk will soon be driving around with missing number plates that obviously just fell off....lol
Labour didn't get turfed out for doing the wrong things. It got turfed out for not delivering on doing the right things it said it would do, for some things that it didn't need to do and due to conspiracy theory and anti-woke, culture war narratives (bit like the stuff kiwikidz posts e.g. anti-immigrants, anti-benficiaries, anti-maori, anti-public sector). Big difference.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.