Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop). (Updated with a note about the outsized fall in swap rates, below.)
MORTGAGE/LOAN RATE CHANGES
No changes to report today. But we are expecting one from a major tomorrow. More details here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Heretaunga Building Society cut two of its rates. More here. All updated rates less than 1 year are here, for 1-5 years, they are here.
A SLOW CRAWL
Activity in the services sector 'inched its way higher' during August, according to the BNZ/BusinessNZ PSI survey. It is still contracting but noticeable less than in July.
INFRASTRUCTURE FOR THE FUTURE
Auckland Airport is upping its capital development game. It has announced an equity raise of $1.4 bln to fund its planned capital investment plans. The equity raise comprises an underwritten placement of $1.2 bln plus a non-underwritten retail offer to raise up to $200 mln. This part of their multi-year $6.6 bln program. A new $800 mln construction contract was signed with Hawkins today for development of the new domestic terminal.
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm.
DIRECT HIT
We should note that Shanghai, China financial and business capital, is taking a direct hit from Typhoon Bebinca, (or called Beibijia in China). Much of the city is in lockdown. Up to a 2m storm surge is expected in the Yangtze River. Shanghai is low-lying so damage may be widespread. Financial markets are closed.
VIRTUALLY BANNED
The Environmental Protection Authority has significantly restricted the use of chlorthal-dimethyl (also known as DCPA) because of concerns about its effects on fetal development.
INFRASTRUCTURE RESILIENCE?
Minister Shane Jones has had MBIE draft a Critical Minerals List, which is now out for consultation. (The draft seems to include sand.) The usual suspects are horrified. Those likely to benefit are delighted.
BACK TO NORMAL
After being unusually high over the prior three weeks, turnover of NZ Government bonds in the secondary markets returned to its recent 'normal' level last week of about $30 bln. This 'new normal' has been in place since the pandemic.
AUSSIE FARMERS FEELING BETTER
In Australia, confidence has returned to their farming sector following a previous mid-year dip in sentiment, as more favourable livestock markets and beneficial rain in some cropping areas fuel renewed optimism. We will get the Rabobank update for New Zealand famers tomorrow.
SWAP RATES STAY WITH SOFT TONE
Wholesale swap rates are probably softish again today. Update: swap rates took an outsized fall today. Our chart below will record the final positions. The 90 day bank bill rate is down -3 bps at 5.07%. Since the August 15 OCR drop, the 90 day bank bill rate has fallen another -30 bps. The Australian 10 year bond yield is up +3 bps at 3.85%. The China 10 year bond rate is unchanged from this morning at 2.07% but remember Shanghai is closed. The NZ Government 10 year bond rate is down -1 bp at 4.12% and the earlier RBNZ fix was at 4.08% and down -6 bps from Friday. The UST 10yr yield is little-changed at 3.65%. Their 2yr is now at 3.59%, so that curve is now positive by +6 bp.
EQUITIES MOSTLY LOWER, BUT HIGH HOPES FOR WALL STREET
The NZX50 is down -0.7% in its late Monday trade. The ASX200 is up +0.4% in afternoon trade. Tokyo has opened its Monday trade down -0.7%. Hong Kong is down -0.4% but Shanghai has not opened due to the typhoon, but it closed on Friday at its lowest since early 2019. Singapore is down -0.4% at its open. The S&P500 futures indicate that Wall Street could open tomorrow with a strong +1.2% gain.
OIL IN FIRMISH HOLD
The oil price is up +50 USc from this morning at just on US$69/bbl in the US, and now just under US$72/bbl for the international Brent price.
CARBON PRICE UNCHANGED AGAIN
The carbon price is unchanged at $61/NZU. Volumes traded are light. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD AT ALL-TIME HIGH
In early Asian trade, gold is up +US$7 at US$2584/oz and another record high.
NZD HOLDS
The Kiwi dollar is unchanged from this morning at 61.6 USc. Against the Aussie we are still at 91.8 AUc. And against the euro we have dipped slightly to 55.5 euro cents. This all means the TWI-5 is essentially unchanged at 69.3.
BITCOIN SLIPS
The bitcoin price is down -2.3% from this morning, now at US$58,411. Volatility of the past 24 hours has been modest at just on +/- 1.8%.
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25 Comments
Activity in the services sector 'inched its way higher'...
I am all for a bit of optimism bias, but... here's the overall PSI index, and the sub-index for activity / sales. The individual result for the August month was a little bit up on July - but it was the third worse August of all time (behind 2020 and 2021). And, yes that includes the whole GFC period, which, as an aside, we appear to be determined to re-run... but this time bigger.
I think the one at the rally had an AR-15. Same gun model used in loads of mass shootings.
https://www.npr.org/2023/05/10/1175065043/mass-shootings-america-ar-15-…
The times we live in when a cat 1 storm that disrupts flights and trains makes the interest feed but a presidential candidate getting shot at doesn't.
"Typhoon Bebinca made landfall in Shanghai [as a lowly Category 1 storm] on Monday morning, disrupting flights and trains."
"In 1931, China experienced arguably the most lethal flood in history. Rivers throughout the country rose onto their plains, inundating an area the size of England and half of Scotland combined. Around a tenth of the Chinese population was affected; over two million people died, either by drowning or by the subsequent famine and epidemics."
https://www.dw.com/en/china-typhoon-bebinca-makes-landfall-in-shanghai/…
https://dialogue.earth/en/climate/10811-picturing-disaster-the-1931-wuh…
Increases in private debt and / or Govt deficit spending create the surplus that enables (i) companies (in aggregate) to make profits and (ii) workers to get jobs and pay rises.
In countries like Canada, UK, Sweden, NZ, Aus where high interest rates and high private debt levels have combined to squish borrowing and disposable incomes, profits are getting crushed. Unemployment and real wage reductions will be next (they're already here).
Melbourne is ‘dead’, says property mogul
Home building mogul Nigel Satterley says Perth’s housing price surge isn’t over yet, but that the high-taxing Victorian government has turned Melbourne into a dead zone.
“It’s like Victoria has got a financial haze over it. Tobin Brothers have more activity in their North Melbourne mortuary than downtown Melbourne. It’s dead,” Mr Satterley told The Australian Financial Review.
Ouch ! .... Minus nearly 800k ...
https://www.oneroof.co.nz/news/out-of-town-investor-loses-nearly-800-00…
Chen said over the past two years he had done a number of deals on re-listed properties, including villas in Grey Lynn and Freemans Bay. “I always work to present an offer. Even if it is ridiculously low, you should still get them on paper.
employ this agent!
its really quiet without the Spruikers....
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