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 has cut all its fixed rates, especially the 12, 18 and 24 month ones. Details here. The Cooperative bank also cut most of its rates. The Police Credit Union trimmed its two year rate. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
ANZ has cut most of its TD rates, with the 12 and 18 month rates slashed by -40 bps. The Cooperative Bank and Nelson Building Society cut TD rates too. We know more are coming from others tomorrow. All updated rates less than 1 year are here, for 1-5 years, they are here.
FEW AUCTIONS, LOWER PRICES
Last week's auction activity was at a low level, with selling prices falling. Three quarters of the properties selling at auction are fetching less than their rating valuation.
'A BIT LESS AWFUL'
July service sector activity was 'a bit less awful', according to the BNZ/BusinessNZ PSI. While service sector activity recovered a little last month from the 'horrendous' June results, the Performance of Services Index is still below the levels seen during the Global Financial Crisis.
MORE BUT NOT GETTING ANY OLDER
As at June 30, 2024, New Zealand’s estimated resident population was provisionally 5,338,500, (after a downward revision). That is +93,500 or +1.8% more than as at June 2023. The median age remained at an elevated 38 years, just off its series high, but has been at this level for six consecutive quarters.
WESTPAC NZ CAPITAL & BAD LOANS BOTH UP A BIT IN JUNE QUARTER
The latest quarterly disclosures from the Westpac Banking Corporation show both regulatory capital and loan provisions and losses slightly higher at Westpac NZ. The NZ unit's total regulatory capital ratio, as a percentage of risk weighted exposures, rose to 15.62% at June 30 from 15.23% at March 31. Its common equity tier one capital ratio rose to 11.77% from 11.37%. Westpac NZ's specific provision for non-performing loans increased to A$194 million from A$157 million, and its actual losses for the nine months to June rose to A$15 million from A$10 million for the six months to March 31. Total non-performing loans rose to A$1.031 billion from A$875 million.
NEW NZ COUNTRY HEAD FOR HSBC NZ
HSBC, which announced it was quitting wealth and personal banking in New Zealand last year, has appointed Daniel Felton as Country Head and Head of Wholesale Banking NZ effective September 1. Felton joins from HSBC UK, where he has led the corporate banking team in the South of the UK for the last five and a half years.
PROFIT JUMP
NZ’s second largest insurer rakes in $2.8 billion from insurance premiums. Vero owner Suncorp New Zealand reports a +17.3% rise in annual gross written premium, as net profit doubles to $230 m;n.
HOPE LEAVES, RICH ARRIVES
Katherine Rich has succeeded Kirk Hope as CEO of BusinessNZ who is leaving the position after 9 years to take up the position of CEO of the Financial Services Council.
NEW COVERAGE
We are extending our daily review of the NZX with a new daily summary, released each day about 3pm.
MACHINERY ORDER GROWTH
Japan said core machinery orders, which exclude those for ships and electric power companies, rose by +2.1% in June from May, better than expected. It was on the back of an upturn in orders for the service sector. In JPY, these orders were up +2.6% from the same month a year ago.
SWAP RATES IN ANOTHER SMALL SHIFT UP
Wholesale swap rates are probably firmer today but not significantly. Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 5.2%. The Australian 10 year bond yield is up +2 bps from this morning at 3.96%. The China 10 year bond rate is unchanged at 2.19%. The NZ Government 10 year bond rate is up +6 bps at 4.22% and the earlier RBNZ fix was at 4.15% and down -5 bps from Friday. The UST 10yr yield is up +3 bps from this morning at 3.91%. Their 2yr is now at 4.07%, so that curve is now inverted by -16 bps.
EQUITIES FIRMER AGAIN ON GOOD DATA
The NZX50 is down -0.9% in Monday trade. The ASX200 is up +0.1% in afternoon trade. Tokyo has opened unchanged. Hong Kong is up +1.0% at its open. Shanghai is up +0.5%. Singapore is down -0.1% at its open. The S&P500 futures suggests Wall Street will open +0.6% higher tomorrow.
OIL ON HOLD
The oil price is unchanged from this morning, still just on US$75.50/bbl in the US, and at just over US$79/bbl for the international Brent price.
CARBON PRICE FIRMS
Today the carbon price is up +$1.50 to $53.50/NZU today in light trade. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD LITTLE-CHANGED
In early Asian trade, gold is down -US$2 from this morning, now at US$2503/oz.
NZD SLIGHTLY FIRMER
The Kiwi dollar is up +20 bps from this morning, now at 60.7 USc. Against the Aussie we are still at 90.8 AUc. Against the euro we are up +10 bps at 55 euro cents. This all means the TWI-5 is little-changed from this morning at 68.9.
BITCOIN SLIPS
The bitcoin price has slipped -1.8% from this morning, now at US$58,652. Volatility of the past 24 hours has been modest at just on +/- 1.7%.
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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42 Comments
Visa and Mastercard both charge the retailers about 1% for their service. 1% interest for 55 days equates to 6.6% p.a. rate. The good people who don't pay on time get charged the usual exorbitant rate, plus the two providers get the 6.6% p.a. as well. Great business model.
To avoid the "Middle Income Trap" China, India and the rest all have to just give their economies over to Western Investment. That's all. This sounds like blackmail more than sound policy. Link
Iron ore price now down 38% for 2024 - Fortescue down 41%. As Bloomie says, 'Welcome to the End of the Biggest Commodity Boom - After basking in the sunshine of higher prices, iron ore faces a blizzard'.
We've heard this before, but this time it could actually be true.
It was an astonishing bonanza: From the late 1990s to earlier this year, iron ore prices jumped nearly tenfold, more than any other major commodity; traded volume tripled; Australian commodity tycoons become billionaires; mining companies turned, even briefly, into Wall Street darlings; and mighty legal battles broke for control of the last untapped mineral deposits.
The cost of the reddish dirt, which turns into steel inside blast furnaces, has fallen already below $100 a metric ton, down 55% from its all-time high of almost $220 a ton set in 2021. Beyond, the outlook looks somber as Chinese steel demand reaches a zenith. Pinpointing the exact date is foolhardy, but now it’s becoming clear that China hit peak steel demand somewhere between 2020 and earlier this year. The reason? The shift in its economic model to services and away from heavy investment and housing construction.
https://www.bloomberg.com/opinion/articles/2024-08-19/the-iron-ore-comm…
Are you talking about the old historic bnz building, opposite ‘Darth Vadar’s pencil case’? The old building with cafes, shops etc in it now?
I think you are. It got pretty run down didn’t it. I went to an amazing techno rave in it in 1990. The dystopian music worked well in the rather post-apocalyptic surrounds
ATHs for the mighty gold so interesting to look at the gold stocks.
Using the GDX(J) ETF as a benchmark, miners are up 40% in the past 12 months. Same for the juniors.
Using same benchmark, mining stocks are still down 38% from their peak in 2011. Even worse for the juniors, down 61% over same time period.
Which is why if they drop them too far, investors will look overseas for a better return. And to do that they'll have to sell the NZ$ and buy (pick your favourite countercurrency)
It's all about probability I guess. TD rates just partially alleviate destruction of purchasing power. They don't actually beat inflation.
So allocating 10% to some speccy altcoin could be a good move, particularly if it has the opportunity to 100x in the next bull run.
Hmmmm...
Michael, the role of property continues to expand. You sent me a great e-news that we often reference, Mr. Matt Stoller and his BIG newsletter.
This software algorithm ‘RealPage’ that coordinates rental increases. This led to some FBI dawn raids. What do you think about this form of price fixing?
MICHAEL HUDSON: Oh, that’s right… To try to coordinate rents. That’s been happening in quite a few different countries. They’re trying to make sure that landlords do not lower the rents just to get customers. They want them to hold out and say, if you want housing, you have to pay the high prices that we’re charging. And we want to make sure that all the landlords are acting together as a monopoly to prevent any housing that people can basically afford at what used to be 25% of their income and is now up to 43% for renters, 43% for buyers and over 50% for many renters now. So yes, they’re trying to increase the price of housing.
And of course that helps price American labor out of the market, which is just one more reason that Americans are buying imports and de-industrializing. So you would think that supporting Stoller’s criticism of the landlord’s monopoly would be to help the economy, much as David Ricardo’s critique of the pro-landlord Ricardo Corn Laws in 1815 was aimed at making English industrial labor more competitive and not make industry flourish in other countries. Certainly.
When you think of those rental price increases, is affordable housing and the right to shelter the frontier to our freedom? There’s not much affordable housing being built today. Most of the housing is for very wealthy people, not simply mansions, but real palaces for the billionaires and the multi-millionaires that are developing. There’s very little housing for the people. Although I must say, the subway I took a subway today from Manhattan to here, and the subway is certainly the new affordable housing here in New York. Link
As soon as the rates did a big jump.
I was telling everyone here they're gunning for jobs and businesses.
Now it's happening, everyone seems shocked, or saying the RBNZ dropped too late.
This is exactly what they were after - what on earth were people expecting was going to happen. Oh yeah, smash the ponzi and make houses affordable.
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