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).
MORTGAGE/LOAN RATE CHANGES
BNZ cut two key home loan rates to ensure it's offer card matches the lowest rates from its main rivals. More here. More details here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
SBS Bank cut some short-term rates today. More here. All updated rates less than 1 year are here, for 1-5 years, they are here.
SHRINKING
Our economy shrank -0.2% in June quarter. On a per capita basis, this recession has surpassed the Global Financial Crisis after contracting on that basis for seven consecutive quarters. On a 'real' basis, total gross Q2-2024 quarterly economic activity was virtually unchanged from Q2-2023.
SINKING
ANZ said card spending among its merchant customers was down -1.8% in August from a year ago as 'soft demand' took its toll. The types of spending most sensitive to interest rates are experiencing the largest falls.
SLIDING
The latest SEEK employment report showed that their job ad volumes fell -1% in August from July to be -31% lower than in August a year ago. Auckland is also down -31% year-on-year, but Wellington is down -41%. Christchurch is down -28% on that same basis.The least fall (-18%) is in Otago. They also noted a clear drop in ads for accountants.
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. FBU and Vector rise, SkyCity and Oceania fall.
DATE SET
Fonterra said it will release its annual results on Wednesday, September 25, 2024. Analysts expect them to be better than in recent years.
POPULAR PAPER
Today's three-part NZGB bond tender was very well supported with 125 bids, with 56 winning a portion. More than $1.2 bln was bid for the $500 mln available.
RAIDING THE KITTY?
Airways New Zealand has today announced its annual results for the year ending 30 June 2024. The air navigation services provider is reporting strong safety and operational performance and a positive financial result. And it reported a surplus of $14.5 mln after paying tax. But it also declared a dividend to its Government shareholder of $20 mln.
IS LIFE FAIR FOR YOU?
A new study by NZIER and Auckland University for Treasury investigated our perceptions of fairness. Interestingly, they found we mostly agreed what 'fairness' means, but we disagree whether life is fair or not. There are two opinion groups. The larger group believes that people have different starting points in life, and fairness means providing resources or opportunities to overcome those differences. The smaller group – basically the pale/male/stale cohort – believes that people already have equal opportunities and should be rewarded for their efforts or choices. Half of the participants (51%) said life is fair for them, and a quarter (25%) said it is unfair.
NEW DIRECTOR FOR SBS BANK
SBS Bank says Jason Franklin will be joining its board as a director from October 1. Franklin is CEO of PowerNet and also has governance roles with SmartCo Ltd, Electricity Networks Association and Southland Regional Development Agency, SBS says.
TAX SENTENCING
A Feilding man was sentenced to home detention on tax evasions charges totalling more than $600,000. The Palmerston North District Court sentenced Fortune Shumba to 12 months home detention and 200 hours of community work. He was also ordered to pay reparation of $50 per week for the next 5 years ($3000) in addition.
CASUALISED
In Australia, their number of workers without a job fell by -10,500 to 627,000, or an unchanged 4.2% of their workforce. Even though employment rose by much more than the expected +25,000, the number of new part-time roles rose +47,500 and the number of new full-time roles fell -3,100 in August. Almost 31% of all Aussie jobs are now part-time. (In New Zealand it is barely touching 20%.)
THERE ARE NOW 27 MLN AUSSIES
Australia's population grew by +2.3% from a year ago to 27.1 million people as at March 2024, according to the latest figures released today. They grew by +510,000 net migrants, plus a +105,500 natural increase.
HOSTAGE ELECTIONEERING
Blocked by an unlikely grouping of Democrats and MAGA forces in the US House of Representatives, an extended US Government funding package has failed to pass a key vote, designed to affect election perceptions. It could be a rocky road for them, and financial markets, over the next 48 days.
SWAP RATES MOVE UP
Wholesale swap rates are higher today. As at writing, the Fed reaction caused 10yr to rise +3 bps, and then the GDP outcome extended the move, now up +7 bps on the day to 3.87%. The 2yr is up +6 bps.. Our chart below will record the final positions. The 90 day bank bill rate is holding -1 bp lower at 5.00%. The Australian 10 year bond yield is up +8 bps at 3.98%. The China 10 year bond rate is down -1 bp from yesterday at 2.04% and a new record low. The NZ Government 10 year bond rate is up a very sharp +13 bps at 4.30% and the earlier RBNZ fix was at 4.20% and up another +7 bps from yesterday. The UST 10yr yield is up +9 bps at 3.74%. Their 2yr is now at 3.65%, so that curve is more positive, now by +9 bps.
EQUITIES ALL UP, EXCEPT WALL STREET
The NZX50 is up +0.3% in its late Thursday trade. The ASX200 is also up +0.3% in afternoon trade. However Tokyo has surged in its opening trade up +2.5%. Hong Kong is up +1.1% but Shanghai is 'only' up +0.5%. Singapore is up +0.6% at its open. The S&P500 ended its Wednesday session on Wall Street down -0.3% as it digested the Fed's decisions and Powell's comments.
OIL DIPS
The oil price is down -50 USc from this time yesterday at just under US$70.50/bbl in the US, and now just under US$73.50/bbl for the international Brent price.
CARBON PRICE STEADY
The carbon price is unchanged again at $61/NZU. Volumes traded are still light. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DIPS AGAIN
In early Asian trade, gold is down -US$12 at US$2561/oz and off its recent record high.
NZD FIRM
The Kiwi dollar has stayed up, now at 62.2 USc, and a +20 bps gain from yesterday. Against the Aussie we have hel at 91.7 AUc. And against the euro we have risen +20 bps to 56 euro cents. This all means the TWI-5 is now at 69.8 and up +20 bps.
BITCOIN UP AGAIN
The bitcoin price is up +3.1% from this time yesterday, now at US$62,230. Volatility of the past 24 hours has been moderate at just on +/- 2.8%.
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55 Comments
A lot of people doing it tough out there. Our sector (engineering/infrastructure) is shedding staff, many of whom are talented folks. The effect of that will be felt in the short and long run.
Worsening the situation is the fact that we now have 3 to 6-year election cycles also adding uncertainty on top of the usual 8-10 year boom-bust cycle in our economy.
Yeah it's the same where I work. My area in the company isn't usually affected by redundancies, but we lost some people - at least most of the cuts were in positions yet to be filled.
There's a lot of uncertainty overall. 1 year ago we had an opening that barely had any applicants, took a while to find someone fit for the job. We now hear of job openings in the company with literally hundreds of applicants - even people who are obviously not qualified try their luck.
Very few jobs in the market compared to 1-2 years ago, the situation does look grim from my little bubble - but I imagine it's not that different elsewhere.
Insurance is shedding staff both life and health will see above 3% inflation band some by a lot, people will cancel or reduce cover and staff are being shed to maintain expense to revenue metrics. It will be brutal IMHO over 25% over 3 years with one year and approx. 7% gone already.
1 year ago we had an opening that barely had any applicants
A year ago was a different era. There was still plenty of free cash sloshing around the economy.
The last annual budget under the previous government (2023/24) had a 36 billion deficit (9% of GDP) on top of the $91 billion of fiscal deficit already pumped into the system in the previous 3 annual budgets.
Much of that, plus billions in off-cycle fiscal stimuli, was going into welfare boosts and whole bunch of handouts.
Kiwi consumers were behaving like Emiratis minus the bucketloads easy money from oil exports.
Yeah it was nonsense. Government pretty much gave away money to banks to lend - they had a special pool of money banks could borrow from at very low rates - cost of funds was ridiculously low. That money naturally went to people and businesses to foment the craziness the covid era was in NZ. Now everyone pays the price (except the kingdom of Riverhead)
I did a run from engineering to public sector right when public sector cuts were hitting the most (I had almost no work for 3 months at the consultancy, literally twiddling thumbs waiting for work...). Everyone at the firm thought I was putting myself at undue risk, but I have a much greater sense of job security now.
That said none of my old colleagues have lost jobs yet, touch wood. Hopefully they're big enough to absorb a decent amount of time with less work rolling in.
Aussie MSM (actually penned by David Llewellyn Smith from Maccy B) going all DGM on the demise of the China economy and the impacts it 'may' have on the Aussie economy. Incidentally, David gives some attention to iron ore - which I pointed to y'day through the controversial ZeroHedge site.
Financial crises of this nature do not resolve quickly. The prices paid for the “extend and pretend” of bad debt are time and opportunity.
For years to come, anyone banking on China coming to the rescue of Aussie commodities like iron ore and coking coal will be sorely disappointed.
https://www.news.com.au/finance/economy/world-economy/worse-for-austral…
Hedge fund titan John Paulson threatens to sell everything and go into cash and gold if Kamala wins the presidency.
Paulson's fund manages an estimated $9 billion across various sectors and he is concerned about increasing the corporate tax rate, raising the capital gains tax, and introducing a 25% tax on unrealized gains for wealthy individuals. He warned these policies could lead to mass selling and market crashes, predicting a quick recession if enacted.
https://www.marketwatch.com/story/john-paulson-says-he-would-pull-his-m…
Funny you say that JC. I have a tiny amount (like $12 lol) but I'm testing a defi farm to see if I can generate good yield.
Might take some of my AAVE profits and roll it into a FTM and SUI pool tonight.
Its funny - when you are an investor about 65% of the days happen to be pokie winning nights except the tax man gets his share.
So the Fed cut rates for the first time in 4 years. Four years ago (and even now), a lot of people at the water coolers and BBQs were / are talking about ratty as tulips 2.0
Now BlackRock is pitching BTC to clients as an asset to hold during "banking system crises, sovereign debt crises, currency debasement, geopolitical disruption, and other country-specific political and economic risks."
And it gets more interesting. TradFi mega-whale Cantor Fitzgerald is rolling out BTC lending and their CEO is a raging BTC bull.
Is the era of Bitcoin upon us? Is now the time to lock-in and remember what you own?
https://www.cantor.com/cantor-fitzgerald-to-launch-bitcoin-financing-bu…
I own an early Bitcoin/Tulips comment...
...perhaps GFC subprime mortgages are more relevant given BlackRock's spruiking of both
https://money.cnn.com/2008/10/28/magazines/fortune/blackrock_brooker.fo…
Not ticket clippers, they are sharks. Like Amazon, they seek to own and control every step of a process, and when they do they will move on to other areas and repeat, extracting value and hoarding influence as they go. The fact that so much power and ownership has been able to accumulate into one company astounds me, and should concern us all.
If this was Labour, the hounds would be baying.
But Nact probably don't separate truth from lies - given that they are peddling one, I guess it goes with the territory.
She should go, and so should the shonky legislation she was party to. Luxon should hang his head in shame.
Lie down with dogs...
Second time in two weeks the Coalition have been outed for dodgy documents, the first time the document didn't exist and now it's a "mystery" document ...
Good to see you using some Te Reo during Maori Language Week kiwi ;). Seriously, I had thought at one point that Shane Reti could have made a good Prime Minister or at least a really good Health Minister given his background, still time I guess but just disappointed at the moment.
I hope he fills a large glass of pinot, then spits it all over his wide screen monitor and Macbook, when he sees the average rate increase and insurance uplift that is coming his way.... I actually hope he see's 3.1% cpi for the next year, he will still cut but it might destroy his bonus pool
Worse then that: feelings on fairness. Most of those on projects like this and managing those departments could stand to be shown the door and pick up other work equating to the same skillset of listening to reckons. I hear the supermarkets are still hiring. We as a country would be far better off with less of these junk surveys that serve no purpose, help no people and go nowhere. Even hiring beneficiaries unable to pick up physical roles to perform the work of treasury staff in these projects would provide a wealth more real positive benefits to the nation then employing those who could be employed elsewhere to do this negligent busy work.
A relevant question judging by the historical graph in this link
"NZIER point out:
Since 2020, interest rates have risen significantly, but the Treasury has not updated the discount rate. This has caused the discount rate to become untethered from interest rates. The last time interest rates were at today’s level, the Treasury’s discount rate was 8.0% – three percentage points above the current value."
https://www.kiwiblog.co.nz/2024/09/the_public_discount_rate_is_too_low…
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