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
BNZ dropped all its fixed rates today matching its main rivals. They also simplified their carded rate offers, essentially making their old discounted 'Classic' rates their Standard rates in a move that mirrors what ASB did many months ago. It is a change that will benefit FHBs especially even if they kept their LEPs. There were also cust from the Police Credit Union, and WBS. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
The Police Credit Union cut rates today. Sharsies said its Sharsies Save account rate fell today from 4.60% to 4.35%. But it also said its promotional 5.00% rate will continue until August 31. All updated rates less than 1 year are here, for 1-5 years, they are here.
SELLER PRICE EXPECTATIONS CAPITULATE
The REINZ's national median price was down another -$17,000 in July from June, with the Auckland median down -$80,000. House prices continued to tumble in July but that's proving to be good news for buyers as sellers seem to be capitulating in some markets. Deals are getting done, with transaction volumes up to 5806 compared to 5070 in July 2023.
COMCOM PRESSES FOR MORE BANK COMPETITION
Commerce Commission backs away from recommending shake-up to banks' regulatory capital requirements in its final banking competition report. It pins its hopes for more competition in the sector on a capital-bolstered Kiwibank & open banking. More here.
CONFLICTED MORTGAGE BROKERS IN CROSSHAIRS
In its response to the ComCom report, Consumer Affairs Minister Bayly notes the Commission found mortgage brokers are aligned with the banks and often only put forward one home loan offer to their clients. "I will be encouraging the Financial Markets Authority to pull every lever they can to ensure mortgage advisers are transparent about who they act for and what commission structures are in place," he said.
SIGNS OF LIFE
Latest SEEK NZ employment report shows signs of life in July with particular strength in Bay of Plenty and Manawatu. They say job ads rose in July recording first monthly increase since January.
DEFICIT SHRINKS SLIGHTLY
In July 2024, compared with July 2023, goods exports rose by +$770 mln or +14% to $6.1 bln in the month. The import of goods rose by +$558 mln or +8.5% to $7.1 bln. That meant we ran a monthly trade deficit of -$963 mln. In July 2023 that deficit was $1.174 bln.
GOVERNMENT CUTS ETS UNITS BY 24 MILLION
The Government has decided to reduce the number of units in the Emissions Trading Scheme available between 2025 and 2029, by more than half, throwing out 24 million units in the process. Climate Change Minister Simon Watts made the announcement that the Government had reduced the number of units available between 2025 and 2029 from 45 million to 21 million. The Climate Change Commission (CCC) had advised the Government to trim the “oversupply” of New Zealand Units (NZUs) earlier this year. Watts said on Tuesday that the Government is going to retain the current auction floor price, the cost containment reserve price, and current reserve volumes of New Zealand units in the Emissions Trading Scheme (currently 7.7 million units). “Reducing the number of units will likely see the carbon price rise. We need the carbon price to encourage businesses and individuals to reduce their emissions to meet our climate targets,” Watts said. ANZ Agriculture Economist Susan Kilsby said the changes were “largely aligned” with the CCC recommendations so were unlikely to surprise the market.
HUGE SYNDICATION, HUGER DEMAND
The Debt Management Office of Treasury has today announced that $6 bln of the nominal 15 May 2036 New Zealand Government Bond has been issued via syndication. It was done at a yield to maturity of 4.365%. Total book size exceeded NZ$22.7 bln.
EYES ON DAIRY PRICES
There is another full dairy auction tomorrow, and actually the chance of another small rise is real. Last week's Pulse event brought a +0.4% rise from the prior week's full GDT event. And the derivatives markets suggests another ~3% rise is on the cards tomorrow. For WMP, last week's Pulse event delivered a +1.0% rise from the prior full GDT event. The derivatives market suggests an additional +1.5% is possible tomorrow.
EARNINGS SEASON UPDATES
Our NZX50 profiles have been updated with the recent release of full year results to June 30, 2024 for A2 Milk (ATM, #10), Freightways (FRT, #21), Skellerup (SKL, #33), Contact Energy (CEN, #9) Vital Healthcare Property (VHP, #23), and Mercury (MCY #4).
NEW FEATURE
Check out our new quick update of how the NZX is faring today, as at 3pm. We welcome comments on that update story.
CHINA HOLDS RATES UNCHANGED
China held its Loan Prime Rates unchanged, as expected. The 1-year loan prime rate (LPR) is still at 3.45% while the 5-year rate was retained at 3.85%. Both rates are at record lows, coming after unexpected rate reductions in July.
UPSIDE RISKS HIGHLIGHTED
The RBA released the minutes of its August 6 meeting (what takes them so long?) and those warned of upside risks to inflation and therefore monetary policy. The risk of inflation not returning to target within a reasonable timeframe had increased, those minutes showed. The situation came amid the slow pace of disinflation, signs that the gap between aggregate demand and supply was larger than previously anticipated, and the upward revision to the forecast for final demand. Markets didn't react immediately to the 'warning'.
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 5.25%. The Australian 10 year bond yield is unchanged at 3.96%. The China 10 year bond rate is down -3 bps at 2.16%. The NZ Government 10 year bond rate is up +4 bps at 4.26% and the earlier RBNZ fix was at 4.21% and up +6 bps from yesterday. The UST 10yr yield is down -3 bps from yesterday at 3.88%. Their 2yr is now at 4.07%, so that curve is now inverted by -19 bps.
EQUITIES MIXED
The NZX50 is down another -0.9% in Tuesday trade. The ASX200 is up +0.3% in afternoon trade. Tokyo has opened up a strong +1.7% in a clear recovery. Hong Kong is down -0.3% at its open. Shanghai is down -0.9%. Singapore is up +0.7% at its open. The S&P500 ended its Monday session Wall Street up +1.0%.
OIL FALLS
The oil price is down -$2 from yesterday at just under US$73.50/bbl in the US, and at just under US$77/bbl for the international Brent price.
CARBON PRICE JUMPS
Today the carbon price is up +$6.50 to $60/NZU today in reaction to the Government announcement that future NZU releases will be sharply trimmed back. See above.. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD SLIPS SLIGHTLY
In early Asian trade, gold is down -US$4 from yesterday, now at US$2499/oz.
NZD FIRMER AGAIN
The Kiwi dollar is up +40 bps from this time yesterday, now at 61.1 USc. Against the Aussie we are up +20 bps at 91 AUc. Against the euro we are also up +20 bps at 55.2 euro cents. This all means the TWI-5 is up +30 bps from yesterday at 69.2.
BITCOIN RISES
The bitcoin price has jumped +3.2% from this time yesterday, now at US$60,520. Volatility of the past 24 hours has been moderate at just on +/- 2.6%.
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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92 Comments
ANZ frames it differently. As Goldilocks as it can get.
The monthly falls you refer to seem like they're quite possibly the largest on record. I don't know. Don't follow the data closely. Yet the banksters shrug their shoulders.
As outlined in our Property Focus, we recently downgraded our near-term house price forecast. We now expect house prices to fall 1% over 2024 (prev +1%). However, with the RBNZ unexpectedly kicking off its easing cycle last week, loosening monetary conditions increase the odds of a sharper rebound in 2025. But given near-term momentum continues to head south, that might take some time to emerge in the data. After all, stretched affordability and weakening labour market conditions are still strong headwinds to the market. Stepping back, the housing market is likely to be one of the first parts of the economy to respond to lower interest rates, but it could be a couple of months before we start seeing evidence of that in these data.
Forecasting is easy. This is how its done.
1. Make sure your measures and outcomes are watered down. Like the ANZ does using a 12-month rolling average on growth in an index. That means your variance is always going to be much lower. And eye-opening outcomes like $80k mom have limited impact.
2. Always mention what if scenarios and known unknowns that cannot be quantified. Only mention the ones that suit your narrative. Other known unknowns can be left out.
Who even takes note of the CV in both good times and bad. The CV has about as much relationship to value as a rock does to an animal.
Seriously ignore CV is not a new thing or even something that is particular to the last couple years. Ignore CV was the general rule All of the time.
Likewise a price "indication" is an even more flawed bs number pulled out of a hat stuffed up the ahole of an egotist.
That you even put them in the list is concerning. Neither are actual valuations or resemble a market valuation.
If you think that advice is helpful it is not. It does show more that people are really uneducated about property that they were even looking at the CV, (NZ has really poor understanding of mathematics in general). Those crowing at minor market movements, that nowhere near return to values even from 5-10 years ago, are just trying to stuff their holes with stimulants of dopamine via comments.
What we see now is a minor correction from the stupid market stimulation around the last government. Yet we do not have affordability, there is no massive crash. Those who are gone mortgagee right now were either suffering from other life events that would normally cause mortgagee sales, like MH causing refusal to pay the mortgage or refinance, or overextended themselves way beyond bank stress tests and lost half their income (which would be expected). I have yet to see mortgagee sales from anything other then normal conditions prompting them. There really is no surprise because in good times we had mortgagee sales as well. However after a major pandemic there is a higher rate of income loss as expected as more people become disabled, lose work etc and those have a long tail to take full effect. Normally it can take a couple to a few years depending on the amount of emergency savings and sources of support to run out. Hence a minor shift in the number of people not meeting a mortgage, but they seriously have to take it to denial and MH levels to get to the mortgagee point even with significant life events as people can make choices beforehand.
Rumors spreading that Kamala Harris may appoint SEC chairman Gary Gensler as Treasury Secretary. Hailed as the crypto tsar, this is problematic.
Gensler was very close with FTX's Sam Bankman-Fried and his family. SBF largely donated to Democrat causes. The US doesn't need more corrupt deep state officials and appointees. While SBF has been convicted and in jail, Gary Gensler is being considered for a promotion.
Incompetence and seemingly corrupt behavior should not be rewarded with potential promotion.
https://www.fxstreet.com/cryptocurrencies/news/crypto-community-reacts-…
Theo Von seems grade A good people. I don't know many other US podcasty/comedian people who'd do this:
Classic brain dead tone deaf journalism. The guy was shot at a couple of weeks ago, and it turns out that his S.S. protectors were so useless, corrupt, under orders, take your pick, that the local guy took out the assassin before the S.S. could, or refused to get a shot in. Then they ask him how his V.P. will cope if he is assassinated while in office. No wonder we hold those journalists in such low regard.
The latest Marsden Fund spending of net taxpayers money
https://www.kiwiblog.co.nz/2024/08/the_latest_marsden_fund_spending.html
Where did they get that list from? I can't find anything related on the Marsden fund website...
https://www.royalsociety.org.nz/what-we-do/funds-and-opportunities/marsden
Edit: here are last year's ones https://www.royalsociety.org.nz/what-we-do/funds-and-opportunities/marsden/awarded-grants/marsden-fund-awards-2023/
When have you put up a comment that isn't pure National Party handout?
No Party is right - make that correct - all of the time. Most of them, indeed, are wrong more than 50% of the time, for bigger-picture reasons I explain hereabouts.
Those big-picture reasons tell us that your comment about science attention might be slanted.
It is true, that we aren't studying what matters - which is how to get out of this existential predicament that humanity is facing (all else being somewhat irrelevant).
You must have missed my several posts over recent years where I stated that I was a 90% Labour voter since Norm Kirk, including Jacinda twice.
And I didn't vote National last year either.
Just because people including myself post links &/or comments that don't suit your particular world view agenda is no excuse for your ad hominem attacks (nor an excuse for a few other repeat offenders on this site).
I'm struggling to see what's so bad about researching the impacts of alcohol advertising, given the billions of dollars of harm alcohol does to the country every year. In fact looking at the full list of recipients there seem to be plenty of completely legitimate recipients to me, despite a few questionable ones https://www.royalsociety.org.nz/what-we-do/funds-and-opportunities/mars…
Ultimately the "waste" is an absolute drop in the bucket compared to overall government spending I could never find the effort to be outraged at it.
Hi Jfoe and J.C.. I think you are two of the most knowledgeable posters, and I wonder if you would be kind enough to share your views on Colin Maxwell's interesting late post of 9.09pm last night about the state of our economy and particularly BRICS+ on David Hargreaves article: https://www.interest.co.nz/economy/129281/bnz-head-research-stephen-top…
Many thanks
Colin seems to be a very switched on chap Particularly the Train Wreck that's coming.
"I studied economics ... and have since discovered that the entire subject was a complete crock based on mythology and false maxims. I have since spent more than 30,000 hours studying geopolitics, banking and central banking models, money creation, and unlearning the crap I was taught at University. I write a regular financial column... and am currently doing a sequel of articles that I call 'eCONomics' on all aspects of the Western fiat currency impending train wreck ... My main icons are Richard Werner, Michael Hudson, Ellen Brown, and Sergei Glazyev and I am horrified to find that these four people are the only high-profile personalities on the entire planet who are honest and courageous enough to call out the current situation accurately."
In fewer words - don't take anything at face value, and do your own research.
Quick scan and certain themes resonate. I don't agree that the West is bankrupt because the money supply is unlimited for countries that issue their own sovereign currencies. My assumption is that the rubber hits the road when your whole productive output is dedicated to debt servicing. Before or at that point, there will need to be some kind of debt jubilee.
He's close on the diagnosis of the problem especially around debt but the BRICS+ idea is a fantasy. In a follow up comment when he asks how this won't be corrupted he basically says "cause they are nice guys".
The incentives will still be screwed.
The answer is crypto. Maybe Bitcoin, maybe some other crypto or cryptos, maybe a combination. But sacrificing the central bank scamcoins for decentralised publicly auditable crypto will be the solution.
Crypto is digitally native global money governed by consensus in a very clever incentive structure that has been proven to work. It will outcompete the pre-2009 analog money that has been moved online. It's just a matter of time.
I wouldn't put my expertise above many others on this site. I'm just an ageing engineer who likes to understand how things really work!
I would make two main points on Colin's post. One strong disagree. One strong agree.
My strong disagreement: You cannot simply add private and public debt up and go 'oooh, look at this big, scary number'. Public debt is on the opposite side of the balance sheet to private debt. Every dollar of NZ public debt (liability) is an asset of the private sector. The more Govt goes into debt, the wealthier the private sector gets. When Govt reduces its debt, the private sector gets poorer. The mighty Michael Hudson gets this wrong too (his mate Steve Keen has tried to help him with this).
To bridge my two points, it is worth noting that every dollar of private debt is an asset of either the public or private sector. You can watch NZ private debt levels and private bank account balances go up in tandem - every new bank loan creates new bank deposits. Loan repayments destroy bank deposits.
My strong agreement is that private debt levels are completely unsustainable and the way that banks are allowed to create new money (debt) to inflate the favoured ponzi of the day (bitcoin, housing, land, tech shares) is completely nuts. However, to manage our private debt levels down would require us to reverse the disastrous period between 1990 and 2010 when NZ Govt effectively transferred its debt to the private sector. What Govt has the balls for that job?
On BRICS, I welcome the move to support developing countries to get out from under the thumb of the IMF and the US. To be really clear, the IMF and US use the global financial system, military might, and sabotage to keep countries poor so that the US and their allies can extract cheap labour and materials. More and more people are working this out now and that's a good thing. If we do see a shift in the balance of power to BRICS, and the people holding that power use it responsibly (a big IF), that will cause some big shifts for NZ in terms of the price of imports and potentially the relative value of the NZD. However, I think these risks can be over-egged and they are a long way away.
The way to manage down these risks over the next 10 years is to forge genuine monetary sovereignty - and imho that means balancing our trade through full-scale electrification, really playing to our strengths, and aiming to create a more circular economy that runs without waste. I can dream.
My strong agreement is that private debt levels are completely unsustainable and the way that banks are allowed to create new money (debt) to inflate the favoured ponzi of the day (bitcoin, housing, land, tech shares) is completely nuts.
I think that fits within Steve Keen's paradigm. Re rat poison being lumped with the other ponzi assets, not sure I agree there as essentially there is no counterparty risk. Someone's BTC is not someone else's liability, except with the ETFs and open interest positions. That's quite unlike the property and equity ponzis. Understanding this was a Eureka moment for me.
Let's say I create a kiwibachcoin. People can create kiwibachcoins by using energy, labour and machines to build kiwibachs, which have to be validated by an official kiwibach_inspector before they are entered onto the public accessible secure kiwibach digital ledger. Each kiwibach is worth 1 kiwibach coin.
The market determines the value of kiwibachcoins. Nobody lives in the kiwibachs - that's not the point. They are tradable assets. A kwiibachcoin is not anybodys' liability because you can only redeem the value of a kiwibach coin by selling it on to someone who believes that the asset has a resale value. Now, you might say, 'hold on a minute, they do have value - there is a kiwibach somewhere that I own 1/1000th of'. Indeed there is (or is there?) I guess that gives the kiwibachcoin an edge over bitcoin.
Forgive me teasing, but currency has value because you can use it to pay your taxes and legally settle your debts. There are some people who believe we should limit the money supply to prevent over-consumption. That's not my view, but, even if it was, why use a currency that is not guaranteed by Govt?
Bitcoin is great, but only if you're using it with other Bitcoin users. Unless Bitcoin could supplant domestic currencies as the most popular medium of exchange, not much reason for most people to own them, outside of speculation.
But even if you were to adopt a Bitcoin, a better system would be to distribute them evenly amoung a population from inception. Not have a small handful of people own most of them from the start, and let most everyone else fight over the scraps. It's already over before it begins.
I never painted you as an idealist or a socialist... they where a few $ at the start, I think BTC was more for the smarter crowd rather then the political elite. Many are now diversifying into gold and other hedges as well.... smart s some in gold hedge into BTC, no one knows whats around the corner but Fiat is F..ked.
I never painted you as an idealist or a socialist.
At a core level, I believe everyone should be entitled to a safe, happy life, free of material hardship, and a caring supportive community. We have the technology and resources to make this possible.
We don't look to have the mental wherewithall to make that a reality though, so I can't afford to put much faith or stock in it, at least in the short to medium term. All I can really talk to is how things are likely to be given the setup we have.
Some of the answer might involve a crypto, but it's definitely not Bitcoin.
Forgive me teasing, but currency has value because you can use it to pay your taxes and legally settle your debts. There are some people who believe we should limit the money supply to prevent over-consumption. That's not my view, but, even if it was, why use a currency that is not guaranteed by Govt?
You can pay taxes and repay debt in fiat currency. Also, we know that fiat currencies can expand forever and a day.
But that understanding does not delegitimize BTC in any way.
Great post and I have always been a big fan of reducing our energy dependence as much as technically feasible.
I understand Transpower recently reported on having over 35GW of new generation applications in queue to connect into its network. Most of these projects won't get off the ground but will be interesting to watch what comes out of this.
On BRICS, I welcome the move to support developing countries to get out from under the thumb of the IMF and the US. To be really clear, the IMF and US use the global financial system, military might, and sabotage to keep countries poor so that the US and their allies can extract cheap labour and materials.
To balance (but this is not condoning of the US or IMF), if we look at China's approach to foreign investment/financial support, it looks just as bad, if not worse.
Maybe that is somewhat influenced by the lower tier nature of the nations seeking Chinese support, but I would suspect their M.O would be fairly consistent.
No, just gradients of bad. Any power will take steps to consolidate, by various means.
US bad, still likely least bad. There's a reason it's the most popular destination for migrants, and virtually no one wants to move to a BRICS nation.
About the only potential superpower I hold any hope for is India. They can't manage the speed of development like China, and they have one of the world's oldest continuous cultures. This will potentially allow them to avoid them the same sort of fate as mercantalists like China or Japan.
But it's still changing super fast.
I could say words like "Tibet" and "Xinjiang internment camps", but I guess we also have "Texas" and "Guantanamo Bay".
The Chinese have a history of requiring significant military resources just holding itself together (or keeping people out), hard to say how different things could've been if not for that.
The white man's done worse, but partially due to having the jump on military technology, and the realities of Europe having a lot of countries, but fairly limited land (the only way to go is abroad).
The technological gap between the West and everyone else is almost gone. With it, much of our competitive advantage, and over time, relative wealth and influence.
Thanks Captain Cindy.
https://businessdesk.co.nz/article/policy/winstone-pulp-proposes-closin…
"THEY" will not be resigning
https://www.nzherald.co.nz/nz/politics/mp-darleen-tana-vows-to-fight-gr…
The new improved Jacinda ardern aka chloe swarbrick used the same "they" terminology when interviewed by tv one 🤣🤣🤣🤣🤣🤣🤣🤣 Just how many MPs have resigned from the Green Party and are now refusing to leave parliament??????
The privatisation, either partially or fully, is counter-intuitive to the Government saying they want it to act as a disrupter. It will simply become another entity that is to focus on shareholder returns.
if they want it to act as a disrupter then leave it as Government owner, tip more money in and leave any profits in there to help it grow.
Companies like this need support if we are going to change anything. An independent mortgage company with a tech solution for end to end processing and transferring.
https://youtu.be/E3s-qZsjK8I?si=VQbk8BtLuUNnPceM
Best take on Steve Jobs
100% HughJordan. Many of the successful, and smaller, countries we like to compare ourselves to have a government owned bank of some sort. And some others sold them off at the height of the neo-liberal frenzy, and like us, regret it. If we're okay with have government invest our future money in pension funds (and do pretty well with it too) then a bank isn't much different.
They're pretty good - better than anything in NZ.
These folk are pretty good too:
Al Jazeera is definitely not impartial and has an extremely fundamentalist & extremist bias. Coverage of much of disputes in Africa are very very telling esp with genocide of African minorities with large scale loss of life (which they place a positive note on) and removal of women's rights (which they are very positive slanting about). They have even more of a slant towards promoting human rights abusing regimes which is very telling. They definitely are promoting a fundamentalist bias and it shows in what they report and how they reframe world events to tie in with their marketing messages.
If you want impartiality then take every single news source and mix them all into a pot, pour it out, line up all the articles about a topic and correct for the known biases of the authors through comparisons with others.
Ironically tech & science news like Ars Technica is probably the closest we have to impartial but even then there are more joke/feel good opinion articles mixed in.
Al Jazeera have a bent for sure, but they will generally cover some events far less impartially than their anglo counterparts.
There's some I'd avoid altogether.
Generally I have a cluster of individuals I've filtered through that I keep tabs on regarding most of the stuff I'm following. They generally have a far greater depth of knowledge and understanding about the subject matter than can be gleamed from 60 seconds from whatever "expert" the MSM trot out.
Well avoid them unless it is time for an MST3K laugh. Like clips of many US news outlets it is almost comedy that writes itself and far too silly to take seriously.
In NZ all news sources are needed as many events are missed and not shared between them (protecting IP).
Interesting move - BNZ gets rid of higher interest rate penalties on low equity mortgages:
https://www.stuff.co.nz/money/350384653/bnz-scraps-higher-interest-rate…
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