Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
The Cooperative Bank has cut -10 bps from its 6 month, 12 month and 18 month home loan rate card taking all three down to 3.79%. The 6 month rate is market-leading. They also cut all other term by -5 or -6 bps and that takes their three year carded offer below 4%, matching Kiwibank and SBS Bank.
TERM DEPOSIT RATE CHANGES
The Cooperative Bank has trimmed -5 and -10 bps from their TD rate card. They have also cut -10 bps from the Step Saver bonus saver rate, now at 1.90%.
WITHOUT AUCKLAND GROWTH, THERE WOULD BE NO GROWTH
New dwelling consents hit a record high in Auckland but are lagging behind in many other regions. Most of the growth in consent numbers is coming from non-house dwellings, especially in Auckland, indicating an ongoing push towards higher-density accommodation. In fact, nationally, consents for houses in June fell -4.5% from the same month a year ago. But consents for apartments rose +52% and for townhouses, almost +6%. On a full year basis the rise in apartments isn't so pronounced or lumpy, but the trend to higher density is still pronounced. But without the Auckland growth, there would be no growth year-on-year.
OTHER CONSENTS UNDERWHELMING
Building consents for non-residential buildings were relatively weak. Some analysts were surprised by this. Infometrics notes: "Weak business confidence and low investment intentions are sapping strength from private sector consents, and we predict that declines in private sector work will be the dominant trend in overall activity during 2020 and 2021."
WEAK AUCTION MARKET CONTINUES
At between 20% and 31%, auction numbers remained on their winter lows at Barfoot & Thompson's latest auctions.
TIMELY ACTION
S&P Global Ratings likes the FE Investments equity issue. It says this share issue by FE Investment Group (FEIG) should strengthen the group's capital base and therefore moderate the immediate downside for the creditworthiness of FE Investments, their main operating entity. If it completes, S&P indicates it will unwind the 'negative outlook' it issued recently. FEI has an S&P credit rating of 'B'.
TAX SEASON UPDATE
The IRD is saying it has refunded almost $600 mln in excess withholding taxation back into taxpayers’ bank accounts in the past two months, after the first season of automatic tax assessments. This season has seen completed assessments for 2,579,172 customers since the end of May, which includes 1,330,484 refunds (52%), 270,952 more tax to pay (11%), 882,682 taxpayers who have a refund of less than one dollar or who have had a small bill written off (34%), and 95,054 taxpayers either paid exactly the right amount of tax over the year or had no income over the period (3%).
A BETTER MOOD
Today, Asian equity markets have opened firmer. In early trading, Shanghai is up +0.5%, Hong Kong is up +0.3%, and Tokyo is up +0.6%. They are building on the ASX200 and NZX50 which are both up +0.4%. Wall Street finished is trading session down -0.2% (S&P500).
PAINFUL RETREAT
In Australia, they too released June building consent data and it came in very weak and weaker than expected. For June 2019 they came in a startling -29% lower than the same month in 2018. For the year to June, the decline was a -19% decline. In anyone's language, this is a painful drop. It is data that caused the Aussie dollar to dip, although the ASX didn't notice.
NOT WORKING OUT
In 2016, the New Plymouth District Council sold its huge Tasmanian dairy operation, Van Diemen's Land Company to a Chinese firm for about $300 mln. Things are not going well, especially for the animals involved. The new owners have been accused of extreme animal cruelty. And the promised $100 mln of new investment hasn't happened either.
SWAP RATES STOP FALLING
After yesterday's continued falls, today local swap rates hold, even rose +1 bp across the curve. The 90-day bank bill rate is unchanged at 1.50%. Australian swap rates are also unchanged. The Aussie Govt 10yr is stable today at 1.21%. The China Govt 10yr is similarly stable at 3.21%, while the NZ Govt 10 yr dipped back to 1.49%. The UST 10yr yield is now at 2.07%, and up +2 bps since this morning.
NZ DOLLAR STABLE
The Kiwi dollar has been stable again today, trading sideways at 66.3 USc. Against the Aussie we are still at 96 AU cents. Against the euro we are soft at 59.5 euro cents. We should also note that the UK Pound is lower with the Kiwi dollar now at 54.4 pence and its highest in 2019. That leaves the TWI-5 at 71.7.
BITCOIN SOFT
Bitcoin is now at US$9,463, a -2% decline from this time yesterday. Volatility has been a relatively low +/- 1.6%. The bitcoin price is charted in the currency set below.
This chart is animated here.
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15 Comments
For June 2019 they came in a startling -29% lower than the same month in 2018. For the year to June, the decline was a -19% decline
Even if the plethora of monetary and fiscal stimulus dolled out in Australia over the last few months were to put a floor under the falling property prices in their major cities; by the time construction sector players regain their confidence, the poor sentiments would have wreaked significant havoc on employment and the overall economic health.
Also today, Granny Herald featuring China's domineering approach to Hong Kong now spilling over into New Zealand, in the form of harassment of Hong Kong students protesting the CCP's tactics:
Lee said some Hong Kong students at the university had been putting up the Lennon Wall when the three Chinese men accosted them.
In a video, one Chinese man was heard saying in Mandarin: "If you don't like China, get out of China!"
To which a Hong Kong student responded: "That's why we're in New Zealand."
Then another Chinese man continued speaking in Chinese, to which another Hong Kong student asked for it to be translated because he didn't understand Mandarin.
The man that told the student "you are not human, you are a f**king pig so you cannot understand human language."
Police violence in France hardly gets a mention and I can only guess it's a global MSM self imposed D-notice situation - https://twitter.com/Frankhaviland/status/1155775006523047938
Former Kiwi of the year , and former Australian deputy Prime Minister Barnaby Joyce has bemoaned how hard it is to survive financially in Australia on just $A 211 000 per year ...
... it's not often that I agree with Pauline Hanson , but she did have some choice things to say about his predicament.. . Keep your pre-dick-ament tucked firmly in your pants Barnaby ... or shut the heck up !
$A 211 000 ? ... wow !
It is data that caused the Aussie dollar to dip, although the ASX didn't notice.
Australia’s $239 Billion Stock Rally Blasts Past Record High
I guess Australia is not much different than the US when it comes to this:
Ownership of speculative capital is concentrated in the top 5% of households, guaranteeing that speculative gains from asset bubbles are also concentrated in the top 5%-- roughly 6 million households, with the majority of the gains concentrated in the top few hundred thousand households.
Outsized gains are now only available to the few with the skills and experience required to gamble high-risk assets successfully, and this is becoming more difficult; even the professional class of money managers are increasingly unable to beat passive index funds.
The top 5% are riding high now that central banks have inflated stupendous bubbles in stocks, housing and other assets, but these gains are speculative.These gains are often viewed as permanent entitlements (i.e. bubbles never deflate), but if history is any guide, those holding speculative gains as if they were a form of savings are in for a rude awakening in the next few years. Link
Could economics commentariat please stop using "soft" for figures in decline. It smacks of euphemism and denial that things go down, as well as up. Another one is "unexpected " - practically without exception only used when something was worse than expected, not better. The mindset of persons (in majority of those cited) with the expectations is something to be questioned also, given the current world economic trend re growth and trade etc
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