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
None to report today, so far at least. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
The Police Credit Union trimmed its Notice Saver rate. All updated rates less than 1 year are here, for 1-5 years, they are here.
PRICES SLIDE FOR SIXTH STRAIGHT MONTH
National median house values declined for the sixth month in a row in August, according to CoreLogic
PROTECTING THEIR MILK SUPPLY
Synlait have raised their 2024/25 payout to $8.60/kgMS from $8.00 to stay competitive and not lose any more milk supply.
LESS RED TAPE IN BUILDING INDUSTRY
More details are emerging of the Coalition Governments moves to make house building more affordable. Law changes have been signaled that will target each level of the building product system and will enable recognition of overseas standards and standards certification schemes, therefore removing the need for designers, builders or Building Consent Authorities (BCAs) to verify standards; streamline the citing of international standards with the new Building Product Specification, which can be used with Building Code documents to show compliance with the Building Code, and require BCAs to accept building products certified overseas and recognised by MBIE as regulator. Other changes include streamlining building consent changes by making it easier for minor variations and customisation to be made without the need for a new consent and exempting projects under $65,000 from paying the building levy.
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. We have added some key index fund performance tracking.
'WE CAN DO THAT TOO'
As at the beginning of April, there were no recorded infections of Micoplasma bovis (MPB). The Labour Government's plan to eradicate it, sceptically viewed by many in the industry, has been successful. Copying that strategy, the Coalition government has adopted a recommended MPI plan should Foot & Mouth Disease (FMD) occur here. To be fair, FMD could have a much more critical economic impact that MPB did.
YIELDS RISE
104 bids were received today for the three tranches in today's NZGB bond tenders. They exceeded $1.1 bln for the $500 mln on offer. The May 2030 $225 mln went for a yield of 3.87%, down from 3.97% at the equivalent tender of this maturity one week ago. The May 2034 tranche went for a yield of 4.19% and up from 4.17% three weeks ago. The final May 2041 $50 mln went for a yield of 4.60% and up from 4.50% three weeks ago.
BIGGER SURPLUS THAN EXPECTED
Australia's merchandise trade surplus rose in July to its highest since since February as exports grew to a 5-month high while imports fell to a 3-month low.
UP MORE THAN EXPECTED
Wages in Japan rose by 3.6% year-on-year in July, slowing from a 4.5% rise in June which was the highest in 26 years, since January 1997. Markets expected a July rise of 3.1%.
SWAP RATES HOLD AT SHORT END
Wholesale swap rates are probably little-changed at the short end again today. Our chart below will record the final positions. The 90 day bank bill rate is down -4 bps at 5.15%. The Australian 10 year bond yield is down -2 bps at 3.96%. The China 10 year bond rate is down -1 bp at 2.14%. The NZ Government 10 year bond rate is down -2 bps at 4.24% and the earlier RBNZ fix was at 4.18% and down another -6 bps from yesterday. The UST 10yr yield is down -6 bps at 3.77%. Their 2yr is also now at 3.77%, so that inversion has gone.
EQUITIES MOVE LITTLE
The NZX50 is up +0.3% in its late Thursday trade.The ASX200 is up +0.3% in afternoon trade. Tokyo has opened its Wednesday trade down +0.4% at its open. Hong Kong is down -0.1% and Shanghai has opened up +0.1%. Singapore is up +0.4% at its open. Wall Street slipped earlier today, with the S&P500 off by -0.2% in Wednesday trade.
OIL DOWN
The oil price is down from this time yesterday at just on US$69.50/bbl in the US, and at just over US$72.50/bbl for the international Brent price.
CARBON PRICE LITTLE-CHANGED
Today the carbon price is marginally firmer today at $61.50/NZU. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD STABLE
In early Asian trade, gold is up a minor +US$3 from yesterday at US$2498/oz.
NZD STABLE
The Kiwi dollar is up +20 bps from this time yesterday, now at 62 USc. Against the Aussie we are down -10 bps at 92.1 AUc. And against the euro we are unchanged at 55.9 euro cents. This all means the TWI-5 is now just on 70 and up +10 bps.
BITCOIN FIRMS
The bitcoin price is up +1.7% from this time yesterday, now at US$57,671. Volatility of the past 24 hours has been moderate at just on +/- 2.1%.
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47 Comments
lots of nice observations in this article
https://surplusenergyeconomics.wordpress.com/2024/09/02/288-without-the…
"Whole business plans have been based on the mistaken assumption that an infinity of economic expansion will create ever-larger, ever-more-affluent middle classes in China, India and other EM countries. This has been cited, for example, as a reason for doubling the size of the global aviation fleet over the coming twenty years.
In fact, these countries are now at, or close to, the same inflexion-point in disposable prosperity long since experienced in the West."
The increase in wealth in developing countries isn't as evenly dispersed as it was in the West through the mid 1900s. So there's fewer people, getting really wealthy. There's a middle class, but it's relatively smaller.
Although also hard to dispute the improvements in infrastructure in many of these places that almost anyone can benefit from. Many developing nations skipped right past copper land lines and straight into cheap and abundant cell services.
And sub $10 Chinese lunches:
https://www.rnz.co.nz/news/chinese/527150/auckland-s-chinese-restaurant…
I anticipated this to an extent. So many businesses raised prices way above their cost increases.
The local curry place used to do a $14 lunch I used to like, same lunch is now $20. it’s a small amount of chicken and ghee, there’s no way their costs went up that much.
Average commute time in Brizzie is 58 minutes. I imagine Auckland would be quite similar to this, maybe a touch shorter.
https://www.realinsurance.com.au/documents/the-real-australian-commute-…
I think it’s certainly very similar, making a nonsense of some of the comments above.
My wife’s drive to work is usually about 45-55 minutes, and I would say it’s a pretty average sort of distance.
When I need to go to the office, mine is about 45-50 minutes by train including walking time.
With lower demand in China (& potentially the US) oil could stay around where it is, or drop lower…so if A Orr has wiped out discretionary spending to successfully drop inflation but then fuel drops as well…we could have deflation for the headline number in a few months 😂
What does the RBNZ do then…and yes, council rates are up I know 🤦🏻♂️
Rates and insurance will continue upwards for some time yet I guess, but maybe with smaller increases if we’ve seen the grunty jumps over the last couple of years, rents might plateau…already seeing signs of that maybe…jeez it might be bloody interesting to see the headline numbers this time next year
Wages in Japan rose by 3.6% year-on-year in July, slowing from a 4.5% rise in June which was the highest in 26 years, since January 1997. Markets expected a July rise of 3.1%.
Now things are getting interesting.
There's a lot of concern about weak profits in China. In Japan, profitability by contrast continues to get stronger, boosted in Q2 by sales and a further rise in margins. After a sharp fall in 2023, the labour share has stabilised, but with capex modest, cash holdings remain large.
Japan’s Financial Services Agency wants to align crypto tax rates with traditional financial assets.
The proposed 2025 reform means that taxes on crypto profits will adjust from 55% to 20% and allow loss carryovers.
Happy days for Japanese crypto degens.
https://cointelegraph.com/news/japan-lower-crypto-taxes-2025-financial-…
Q: if your business* was on The brink of going under and the only viable solution was to reduce you're staff's wages to minimum legally allowed ( to reduce costs and make your product meet market price expectations )... Could/ would you?
*- say a coffee shop with 10 staff( biggest expense) and you need the staff to operate.
Not necessarily.
And I know places like Bunnings will pay a teenager $27 an hour.
But to answer the question, pretty tough. I'd be offering everyone reduced hours. Hard market to find that sort of work, and a reduced income is better than no income.
Although it sounds like the writing might be on the wall, time to reinvent or close/sell the business.
Assuming we're talking about an actual coffee shop. But the labour component sounds too high, should be 20-25% of expenses.
It depends on the industry I guess. But if you reduce pay then people will leave and morale will be at a real low. I guess it’s the same with redundancies, but if it’s just a small proportion of the workforce hopefully the remaining employees are still on board.
As an employee I’d probably be happier with a company that just made one or two layoffs compared to one that just reduced wages.
Russia will increase its gold purchases from 1.12 billion rubles per day to 8.2 billion rubles per day for the next month.
And the Russians are buying gold with oil revenues - the govt expects a significant oil and gas revenue of 162 billion rubles in September, a huge jump compared to the 10.9 billion rubles generated in August.
https://www.jpost.com/business-and-innovation/precious-metals/article-8…
2/3 of Russian oil exports are going to China and India (at significantly less than the global oil price).
There's only so much Yuan and Rupee a county would want - and Russia won't want USD. So gold is where they're putting their money in order to trade with countries that aren't India or China.
From the US:
‘Job openings are declining rapidly
Such sharp drops have only occurred 3 times since 2000:
- Dot Com bubble
- Financial Crisis
- Pandemic
All of them ended with a sharp economic downturn
The worst part: This is happening when the consumer has run out of excess savings
And is holding record levels of credit card debt’
https://x.com/gameoftrades_/status/1831364118558974255?s=46&t=MUwQeKa7M…
Australia’s chief housing liar, lol. Another embarrassing excuse of a ‘Labour’ Minister:
https://www.macrobusiness.com.au/2024/09/australias-chief-housing-liar-…
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