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
SBS Bank cut its 18 month fixed rate to 5.99%. WBS also cut rates, including its floating rate (by -10 bps). All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Rabobank cut its rates today. That now only leaves one Korean bank (Kookmin) with a 6% offer for any rate in the TD market. Otherwise 6% has vanished. Heretaunga Building Society also Trimmed rates. SBS Bank did too, late on Friday. All updated rates less than 1 year are here, for 1-5 years, they are here.
'STOCKS DIDN'T LAST', BUT MANY GRABBED THOSE HIGH RATES
Households plunged an extra $2.1 bln into term deposits in July as they sought to take advantage of high interest rates ahead of anticipated reductions in the rates. That was the most since the mid-2023 surge on the way up. Interestingly, that wasn't at the expense of either transaction or savings account balances; both those rose too. The shift was from non-bank investments.
DECADE-HIGH INVENTORIES
The number of dwellings for sale is starting spring 2024 at a 10 year high, Realestate.co.nz figures show. So buyers still have the upper hand as the housing market heads into this next season.
INVESTMENT, OR SPECULATION?
Low rental yields and negative cash flows a feature of three bedroom houses as rental properties, our Yield Report shows. It is the multi-unit properties that are the way to go for investors who value yield. Houses are more of a 'capital gains' play, and there aren't any of them presently. Multi-unit properties are cheaper to buy for similar rents, but have less chance of capital gains.
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. We welcome comments on that update story. Updates to annual results were released today for Meridian and Precinct.
GOVERNMENT CONSULTS ON 'OPEN BANKING' & 'OPEN ELECTRICITY'
With the Customer and Product Data Bill before a parliamentary select committee, the Government's opening consultation on consumer data regimes for both banking and electricity. The Bill will establish an economy-wide legislative framework for secure data sharing, with the next step being the development of regulations establishing the rules for how a consumer data regime will work for different sectors, Commerce and Consumer Affairs Minister Andrew Bayly and Energy Minister Simeon Brown say. Open banking is the first cap off the rank with Bayly and Brown saying they're targeting open banking being fully operational by the end of 2025, six months ahead of the target set by the recent Commerce Commission banking market study. They're also seeking feedback on how a consumer data regime could be established for the electricity sector, and in time also plan to draw in other sectors such as insurance and telecommunications.
SHORT, BUT NOT QUITE AS MUCH
Eighty-three percent of bank customer deposit funding is now due to roll over within six months. That may seem high (and it is) but it is the lowest level since October 2018. Perhaps the July rush to one year TDs that yielded 6% gross has something to do with this small anomaly.
THE PERSONALITY TRAITS OF CRYPTO OWNERS
Do you own crypto? The types of people doing so have been analysed by this Florida/Canadian study. It might describe people you know who do own (and defend) that type of "investment". It is pretty unflattering, and the more so when you know that those in the study self-reported what they saw in themselves and other crypto holders. This was that crypto owners tend to score higher on measures of need for chaos, paranoia, schizotypal attributes, dogmatism, victimhood mentality, and psychological reactance, which is a clinical term for motivations triggered by feelings that personal freedoms have been lost.
MORE ELECTRICITY PRICE EXTREMES
But this time, it is the other way. Wholesale prices have been bouncing around $1/MWhr the past few days. And as we write this they seem to have hit $0.01/MWhr. You will recall they were well over $1000/MWhr in parts of July and August. Now they have moved into the $1 to $2/MWhr range, still very low.
HYBRID NEW CAR SALES GRAB RISING SHARE
There were 6761 new passenger cars sold in August, 8181 used imports. That is -3.2% less than the same month last year, -6.3% less for used imports. Of the new passenger cars, only 564 were pure EVs (one in twelve), but 2712 were hybrids (40%). So almost half of new cars sold were NEVs which was the highest level since the end of the Clean Car Discount. One bright spot was the registration of commercial vehicles which were up +12% from August 2023. Although to be fair August 2023 levels were rather light. The August 2024 level is more 'normal'.
SWAP RATES LITTLE-CHANGED
Wholesale swap rates are probably little-changed again today although there is a hint of firmness in bond rates that may influence swap rates. Our chart below will record the final positions. The 90 day bank bill rate is down -2 bps at 5.21%. The Australian 10 year bond yield is up +7 bps at 4.05% on sticky inflation worries. The China 10 year bond rate is down -1 bp at 2.17%. The NZ Government 10 year bond rate is up +9 bps at 4.37% and the earlier RBNZ fix was at 4.29% and down -2 bps bps from Friday. The UST 10yr yield is up +7 bps from this morning at 3.91%. Their 2yr is now at 3.92%, so that curve has now tightened right up, inverted by just -1 bp.
EQUITIES MIXED, BUT CHINA LOWER
The NZX50 is little-changed in its late Monday trade. The ASX200 is down -0.2% in afternoon trade. Tokyo has opened its Monday trade up +0.2%. Hong Kong is down a sharpish -1.6% and Shanghai has opened down its own -0.6%. Singapore is up +0.3% at its open. Wall Street will be closed till Wednesday, their Labor Day holiday.
OIL DOWN SHARPLY
The oil price is down nearly -US$2 from this morning at just over US$72.50/bbl in the US, and at just under US$76.50/bbl for the international Brent price.
CARBON PRICE FIRMER
Today the carbon price is firmer again today at $62/NZU. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DROPS FROM ITS HIGHS
In early Asian trade, gold is down -US$14 from this morning at US$2492/oz.
NZD TURNS UP FURTHER
The Kiwi dollar is essentially unchanged from this morning, still at 62.4 USc. Against the Aussie we are up +20 bps at 92.2 AUc. And against the euro we are up +50 bps at 56.4 euro cents. This all means the TWI-5 is now at 70.4 and up +30 bps.
BITCOIN DROPS AGAIN
The bitcoin price is down -3.3% from this morning, now at US$57,426. Volatility of the past 24 hours has been modest at just on +/- 1.4%.
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102 Comments
Transport Minister Simeon Brown unveils $32.9b National Land Transport Programme.
"NZTA-Waka Kotahi has put road maintenance and building new roads and public transport infrastructure at the centre of its $32.9 billion National Land Transport Plan for 2024-2027."
Transport Minister Simeon Brown unveils $32.9b National Land Transport Programme - NZ Herald
"Brown said there needed to be less money going into cycleways – and New Zealanders were "sick and tired" in seeing how much money was going into cycleways in recent years."
Ah, they are sick and tired of seeing..... *Checks notes* ..... 1% of that amount he's just announced being spent on cycleways, after a century of less than 0.1% being spent on cycleways.
Much like the road cones debate, focusing on the small things.
The irony is that more people cycling and walking saves the country money with lower health costs. It is also great for tourism. A lot of small towns especially have financially benefitted so far. Bur it is a similar situation with the free prescriptions which a study showed that it would save the health system money if they were free for all, the government cuts things to make their books look better in the short term. Same with cancelling the ferry contract.
It isn't cycleways he's cutting, it's cycling and walking.
You know because walking is woke and he's all about back to basics like kids having to be driven to school rather than walking.
Oh yeah and he's borrowing to pay for the RONS and pot hole fund.
Worse National leadership in living memory, hand down, no-one else is even close
Car tech has moved on since the 1980's, I drive one that is electronically speed limited to 270kmhr. Its about building decent roads with decent road surfaces and ideally totally separate cartridge ways so head on crashes are impossible. With the right setup you can go no limits at all like in Germany.
I had an Audi v8 with low profile tires, my god that thing could stick to the road at insane speeds.... scary fast car, had faster but not good cornering, even the seat felt like a racing seat.
I travel that Puhoi road couple of times a month, often at night. 100 km is ridiculous, its got very gentle curves, wide lanes and big wide shoulders in case you get a flat etc. I think it needs to be 110 to match the other roads that are actually less safe that are already 110kmph.
Already happens multiple times a day on the southern motorway, some womble plodding along at 70 in the middle lane oblivious to the cars coming up behind it, changing lanes to go around it.
Had one this morning, pulled up behind him, flashed my headlights, and he wanders over to the left without indicating, waits for me to pass then wanders over to the right lane (again without indicating) and proceeds to hold up the next car that was also trying to do the speed limit in the right hand lane.
"He [Simian Brown] says the Government’s transport priorities include safety, value for money, economic growth and productivity."
$32.9b for roads but none for the vital link between our islands, ay? So much for safety, economic growth and productivity, ay. Treasonous plonkers paying back their donors.
It is 100% NOT User Pays.
The land transport fund come no-where near covering road costs. It is topped up by govt grants and loans and rates.
The trucking lobby gets a massive subsidy but not rail, strange. I wonder if it's because the trucking lobby pays for those 'favours' through party donations.
Yeah roads are a consumable. Forestry and trucking are heavily subsidised industries when you consider the subsidy comes indirectly, so rather than seeing a handout we get potholes.
I vaguely remember an interview with buffet where he said rail was one of the best investments he made too
Is the drop fully explained by Tiwai reducing their use or is there more to it? It's certainly been a lot warmer here in Chch, my heat pump has had a restful few days.
Methanex will have shut down now, but I don't know if they are much of an electricity user alongside the gas.
I assume that many heavy power users such as the publicised Winstone mill that have shut down, whether temporarily or permanently sold some of their contracted power to wholesale buyers that were desperate to avoid the sky high prices. So now there's hardly any buyers at spot prices.
Will be interesting to see if any reopen, and what the effects on future power contracts will be.
Houses are more of a 'capital gains' play, and there aren't any of them presently.
On a risk weighted basis, the pitiful yield Speculords have accepted in return is a dead giveaway. They continue to carry unrealistic expectations. Considering the rates, insurance, maintenance and mortgage top-ups already paid out, I guess it's the price of being a late entrant bag holder.
Do you own crypto? The types of people doing so have been analysed by this Florida/Canadian study. It might describe people you know who do own (and defend) that type of "investment".
How can anyone take seriously research that can't even accurately differentiate between the ol' rat poison with 'crypto'? The researchers even admit this flaw in their research in the conclusion. (...future studies could delineate between different types of cryptocurrency ownership (e.g., are owners of the more mainstream Bitcoin different from owners of nascent cryptocurrencies?).
Furthermore, the data is collected by Cint / Dynata - both online panel companies notorious for being a hive of bots. Clown research.
Other research suggests approx 10% of employees in the financial services sector may be psychopaths, a stark contrast to the general population, where the prevalence is about 1%.
Won't stop the hoi polloi from buying their funds and taking on their recommendations.
I must admit that Bret Easton Ellis' American Psycho was a thrilling read for me. Patrick Bateman is somewhat of an anti-hero, much like Holden Caulfield in Catcher of the Rye.
https://www.theatlantic.com/health/archive/2012/03/is-wall-street-full-…
The best thing about working in Finance was that your boss was a pisshead physcopath who was happy to sign off your boozey lunches etc gold coin purchases, because that was how the game was played... and how they played it
Now not so much, at least its on hold for a few months at ANZ
CNY has surpassed the Euro to become the second most used currency after USD. Global South countries are using it in trade with China.
According to SWIFT data, the yuan accounted for nearly 6% of global trade payments in April 2024, with a 13.37% rise in June.
https://watcher.guru/news/brics-chinese-yuan-beats-euro-to-become-the-s…
I imagine it's higher than this report suggests, given that it appears to only use data provided by Swift and there are lots of reasons that trade is moving away from that platform (not to say it isn't massively dominant). I'd hazard a guess that on other platforms the yuan has a greater share than it does on Swift.
Most people are probably convinced that the slicing and dicing of property loans was buried after the GFC.
Better think again.
Investors in the AAA tranche of $308M debt backed by 1740 Broadway in midtown Manhattan received only 74% of their money.
Creditors in the five lower groups were totally wiped out.
Supposedly midtown Manhattan is among the most desirable CRE on the planet.
https://www.globest.com/2024/08/29/how-a-recent-major-cre-bond-failure-…
I recall this one that came to light after the collapse of SVB: https://edition.cnn.com/2023/03/14/politics/facts-on-trump-2018-banking…
There may be others, as this doesn't seem like it'd have a strong influence on the MBS market
I recall this one that came to light after the collapse of SVB: https://edition.cnn.com/2023/03/14/politics/facts-on-trump-2018-banking…
So if you read the article, you will see that support for the rollback law was bipartisan, even though more Repubs were in support than Democs.
As for SVB's issues, the bank has a high concentration of uninsured deposits exceeding the $250,000 FDIC insurance limit, which makes it vulnerable to a bank run. And more importantly, incompetence - major deficiencies in SVB's risk management procedures, which the bank failed to address. Regulators attributed blame to SVB's management and board of directors for mismanaging investment risk
"This was that crypto owners tend to score higher on measures of need for chaos, paranoia, schizotypal attributes, dogmatism, victimhood mentality, and psychological reactance, which is a clinical term for motivations triggered by feelings that personal freedoms have been lost."
Having sold the literal top on 31 March (sharing it here too) I feel like my personal freedoms and increased a bit
Having sold the literal top on 31 March (sharing it here too) I feel like my personal freedoms and increased a bit
Sorry to say Wolfie but the research doesn't distinguish between HODLers and those who have sold ratty. Therefore, you're tarred with the same brush. But once again, that shows a weakness of the research. For ex, someone may have previously owned BTC and / or crypto, but no longer believe it in for whatever reason they owned it in the first place may have different attitudes and behaviors; for ex, they trust Granny Herald as a news source over Zerohedge.
Rymans raises it's (right to occupy) DMF prices for new residents to restore it's finances. It seems the creeks and groans of this dubious business model grow louder now people are living longer.
https://www.rnz.co.nz/news/business/526811/ryman-healthcare-raises-pric…
Slow clap everyone.
Government systematically underfunding elder care, and trying to prise hard earned capital gains from boomers to fund their own needs is like trying you steal gold from a dragon's horde.
Also the retirement cos overbuilt in the good times and stretched their finances to the limit.
Massive problem coming our way
Crunching the numbers: Over-65s spending almost all of pension on sky-high rent https://www.rnz.co.nz/news/national/526857/crunching-the-numbers-over-6…
Yep
I don’t align with his politics but for me Matthew Hooton is the top political commentator in the country (very low bar, mind you). His latest Metro article is well worth a read.
Basically he concludes that we need to: cut government spending massively, or increase tax revenue massively, or quite possibly both.
Or we will be bankrupt within 20 years.
Stayed with my dad at his Rymans retirement village last week. Sounds like there is a big movement amongst residents to gain the rights to keep at least 50% of capital gains.
I told him I understand why people see the system as a rort but…. If the model loses its profitability, it might fall over.
Unintended consequences, be careful what you wish for etc etc.
Are they happy to stump up 50% of the capital losses if it goes pear shaped?
I'd have thought the system where the payment is extracted painlessly from the inheritance you leave behind is favorable to having to pay the real cost of care week after week, but what do I know.
Harry 'Doomsday' Dent had some bad news for the Aussies ....lol
Former New Zealand Prime Minister Jacinda Ardern has been recognised for her leadership, as one of the annual DVF Award honorees.
Named after Belgian fashion designer Diane von Furstenberg, the awards are handed out each year to honour women who embody courage, resilience, and leadership.
The awards began in 2010, and past recipients have included former US Secretary of State Hillary Clinton, talk show host Oprah Winfrey, and former US Supreme Court judge Ruth Bader Ginsburg.
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