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
No changes to report today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Rabobank has trimmed most of its rates today. ICBC did so too. All updated rates less than 1 year are here, for 1-5 years, they are here.
JOB WORRIES
Kiwis are worried about their job prospects. The Westpac McDermott Miller Employment Confidence Survey shows the lowest level of employment confidence since we were emerging from the lockdown in 2020
PER CAPITA DATA GOING THE RIGHT WAY
2023 data for work-related injury claims shows little-change from 2022 with a total of 226,600 work-related injury claims made. But the incidence rate for claims related to work-related injuries was at the lowest rate since the start of the series in 2002. Those in trades are the most likely to claim. Generally men's claims are falling, claims by women rising. The over 75s and the under 24s are the highest claimants.
CONSULTATION ON CLIMATE ACCOUNTING STANDARDS COMING
The External Reporting Board (XRB) says it'll publish a consultation paper exploring options for transitional adjustments to the Aotearoa New Zealand Climate Standards "within the month." XRB, the independent Crown entity tasked with preparing and issuing accounting standards and audit assurance standards, says this is in response to feedback from companies that are "Climate Reporting Entities" raising concerns about "certain application challenges."
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Gentrack up with FBU and Contact. Vista, Goodman and Hallensteins all lower
UNDER FIRE HASSALL QUITS VECTOR
Bruce Hassall has withdrawn his nomination for election to the Vector Board in advance of this week’s Vector annual shareholder meeting. He has withdrawn after some Vector shareholders criticised is role as chair of Fletcher Building.
WHAT A SUSTAINED RECOVERY LOOKS LIKE (FBU TAKE NOTE)
Tomorrow Fonterra will release its 2023/24 annual results and they are expected to be an improvement. The FSF share price has risen +27% from a year ago, up +36% from the start of 2024, and up +7.1% from a month ago. Also tomorrow is a dairy Pulse auction of both SMP and WMP. That is expected to be positive as well with SMP up +1.2% from a week ago at the full GDT auction, and WMP up a marginal +0.1%.
EYES ON THE RBA & RISKY SCHEDULING
The Australian central bank will release its September monetary policy review at 4:30pm NZT today. We will have a full review. No one expects them to change their 4.35% policy rate today. What is odd about this review is that it comes one day before the release of the ABS monthly inflation report for August. This ran at 3.5% in July and is expected to ease to 3.1% in August. But that would still be above their 1-3% target range. You might have thought it would have been sensible to switch those dates around.
JAPAN'S ECONOMY IN GOOD SHAPE
Japan's business activity continues to rise, largely based on a service sector that is now expanding at its fastest pace since April. Factory activity isn't expanding however, according to this PMI survey.
EMERGENCY RELIEF REQUIRED
In China, "a leading Chinese economist" and politician has called for Beijing to launch a ¥10 tln stimulus package (NZ$2.2 tln) equivalent to 8% of Chinese GDP, to tide their economy over through the rest of 2024, as credit growth and domestic demand remain drained of energy. The economist calling for this is Liu Shijin (刘世锦), deputy-director of the China Development Research Fund and deputy-chair of the economics committee of the Chinese People's Political Consultative Conference (CPPCC). He has been echoed by Yu Yongding.
CUT CUT CUT
Meanwhile, the Governor of the Chinese central bank said in a rare briefing earlier today that they will cut the reserve requirement ratio by 50 basis points before the end of 2024 without giving a specific timeline. He also announced that the seven-day repo rate will be reduced by 20 basis points to 1.5%.
SWAP RATES LITTLE-CHANGED AGAIN
Wholesale swap rates are probably little-changed at the short end and still with a soft bias. Our chart below will record the final positions. The 90 day bank bill rate is -3 bps lower at 4.94%. That is its lowest level in 280 days. The Australian 10 year bond yield is down -2 bps at 3.99%. The China 10 year bond rate is holding low at 2.04%. The NZ Government 10 year bond rate is up +1 bp at 4.26% and the earlier RBNZ fix was at 4.22% and up +2 bps from yesterday. The UST 10yr yield is still at 3.75%. Their 2yr is now at 3.58%, so that curve is more positive, now by +13 bps.
EQUITIES REACT TO LOCAL CONDITIONS
The NZX50 is down -0.5% in its late Tuesday trade. The ASX200 is also down -0.4% in afternoon trade. However Tokyo is up +0.7%. Hong Kong is up a very strong +2.4% at its open on the stimulus signals and Shanghai is up +1.3%. Singapore is up only +0.1% at its open. Wall Street rose less than expected in futures signals, with the S&P500 ending up +0.3% in Monday trade.
OIL SOFT
The oil price is down -50 USc from this time yesterday at just under US$71/bbl in the US, and now just under US$74.50/bbl for the international Brent price. (Given the USD fell, this is an added weakness.)
CARBON PRICE HOLDS
The carbon price has changed little today, still at $61.20/NZU. Volumes traded are still light. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD STAYS UP
In early Asian trade, gold is up +US$2 from this time yesterday at US$2628/oz and hovering near its record high.
NZD RISES
The Kiwi dollar has stayed up, now up +20 bps at 62.6 USc. Against the Aussie we have risen +20 bps to 91.6 AUc. And against the euro we up +50 bps at 56.4 euro cents. This all means the TWI-5 is up at 70.1 and up +30 bps from this morning.
BITCOIN SLIPS
The bitcoin price is down -1.3% from this time yesterday, now at US$62,977. Volatility of the past 24 hours has been modest at just on +/- 1.6%.
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23 Comments
Good ol' Jamie Dimon hiring thousands of ex-felons.
The 68-year-old oversees JPMorgan’s Second Chance Agenda, which aims to help people with criminal records reenter the workforce, the local economy, and their nearby communities.
He explained: “There are 70 million ex-felons in the U.S. and a lot of those folks, we met with them, … can’t get a car, can’t get housing. A lot of them are married, they don’t want to go back, they need help, they need skills, so what do you do?
“We got rid of ‘check the box’, and these are not hardened, violent criminals—but we’ve hired something like four or five thousand ex-felons, a lot of them are misdemeanors. It just shows you there’s a lot of talent out there.”
Data from JPMorgan suggests that the bank has indeed uncovered a new talent pool. In 2023, 9% of JP hires in the U.S. had a prior record—which had no bearing on their roles. The year prior, the banking behemoth hired over 4,600 people with “criminal backgrounds”.
https://fortune.com/2024/07/15/jamie-dimon-jpmorgan-hiring-employees-ex…
Be careful what you wish for. If these price management systems weren't in place the current financial system would be in ruins.
As British economist Peter Warburton stated in his classic April 2001 essay..."The Debasement of World Currencies: It is inflation, but not as we know it"...
"What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts. On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur. On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the U.S. dollar, but of all fiat currencies. Equally, they seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets.
GLD is the biggest gold ETF in the world. It went 18 years with a single custodian - HSBC.
Then, in Dec 22, JPM decided it wanted to be the 2nd custodian of GLD. Over the next 21 months, JPM has shifted 72% of GLD-held gold to JPM custodial vaults.
Immaculate timing but why?
https://www.wealthmanagement.com/etfs/jpmorgan-joins-hsbc-vault-custodi…
CPI is still well-above RBA's upper range, so not surprising.
The key difference being their federal and state governments are still spending up large thanks to royalties from commodity exports. Billions are being poured into new infrastructure that will only widen the productivity / wage gap between them and their poor cousins across the ditch.
Aussie's resources and energy export earnings are projected to decrease substantially. This decline is attributed to soft global demand and improved supply conditions for various commodities, which are leading prices to retreat from their extraordinary peaks of previous years.
https://www.industry.gov.au/news/resources-and-energy-earnings-further-…
Remember these when the Wellington City Council claims it had no choice but to increase rates 20%
$593 million on social housing
$400 million for a sludge minimisation facility at Moa Point
$330 million on rebuilding the town hall so we have another music venue
$240 million on Civic Square
$236 million on food recycling
$189 million on Te Matapihi library
$180 million on the Takina convention centre
$160 million on cycleways
$139 million on removing cars and redeveloping the Golden Mile
$55 million to “upgrade” Thorndon Quay
$42 million on renovating St James Theatre
$32 million to Reading Cinemas (attempted but failed)
$13 million on a carpark building
https://www.kiwiblog.co.nz/2024/09/remember_these_when_the_wellington_c…
I provided the KB link & its getting a bit late for me however a quick Google found this from Cr. Chung earlier this year. Seems to be following Aucklands food waste recycling program?
"The Zero Waste Plan requires that we buy 76,768 (the number of households in Wellington) new wheelie bins costing $274 annually that will be put on to our rates bill. The CAPEX (cost of buying the new bins) will cost $10.1million and the OPEX (cost of running the city) will cost a cool $225.8million over 10 years and this will cost an additional annual 4.2% on to our rates – in addition to all the other increases. We’ll also need a new organic processing plant that will cost Wellington $22.4 million over four years."
https://wellington.scoop.co.nz/?p=155704
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