A review of the things you need to know before you get home on Monday; no more changes in retail tariffs, no more new houses built, positive farmer confidence, absence of workers from Tauraga port for vaccines, exchange company, NZD company, etc.
Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
The TSB changed some mortgage rates, the 1-year up +5 bps and the three-year down -9 bps.
CHANGES IN TERM DEPT RATES
The Bank of China has raised all of its TD rates.
More … than 14,000 new homes per year were built in Auckland in the year until June and which could increase by at least a third over the next 2 years. With nearly 20,000 new homes made over the past year, the additional housing stock added in Auckland will almost certainly exceed 20,000+ per year over the next 24 months.
THE TRUST OF THE FARM ‘TENT’
Farmers are not as cranky as their public profile suggests. Farm yields are on the rise. And a new farmer confidence survey from Federated Farmers now shows a net + 4.4% of respondents expect their profitability to improve over the next 12 months, a 23 point increase from to the January 2021 survey when a net -18.3% expected a drop. A net 32.6% of respondents expect their spending to increase in the coming year. “The most concerning aspect of the survey from Federated Farmers’ perspective is that almost half of respondents to the July survey said it was more difficult to recruit qualified and motivated staff. That’s a further 13 point increase from the 35% of farmers who cited concerns about labor shortages in January. “
AUSTRALIA AT RISK
In Australia, it is becoming clear that a sharp drop in traffic levels and industrial production will have a rather depressing impact on their economic activity. Hopefully for them it will only be in the short term, but it is a “wish” rather than a certainty at the moment.
CHINA MIXED PRESSURES
from China consumer inflation was slightly higher than expected in July, but still lower than in June. Retail prices for pork, beef and lamb are now all falling month over month. But their industry sector reported PPI up to + 9.0% which was also higher than expected and matched the 13-year high reached in May. This is real pressure on a central part of the global supply chain.
THE PRESSURE IN NSW REMAINS INTENSE
There was 285 new community cases in NSW today, with 170 others not assigned to known clusters, they are therefore not in control of their epidemic. Victoria is report eleven new cases. Queensland is report 5 new cases including some in Cairns. Overall in Australia, over 22% of Australians are fully vaccinated, 44% have now had at least one injection. Australian businesses are now starting to insist on ‘no jab, no work’ policies. There was two new cases in New Zealand at the border (and a serious one in MIQ), but still none in the community. A ship to Tauranga has more than half of its crew infected, and yet our port workers seem reluctant to get vaccinated. 319 workers in the port of Tauranga have not yet received a single blow, out of 530 in this port. In New Zealand, 16.0% of the population are now fully immunized, and 26.9% have received at least one injection.
GOLD FALLS STRONG AGAIN
Compared to where we were this morning, the price of gold is down to US $ 1,741 / oz and a further drop of -US $ 22 / oz so far today. It was the last time at this level in April.
ACTIONS BEGIN POSITIVE
The NZX50 Capital index was up + 0.2% at the start of the week. The ASX200 is up + 0.1% at the start of the afternoon. The Tokyo stock exchange is up + 0.3%, Hong Kong is up + 0.9% and Shanghai is up + 0.3%, all at the very start of the session. Corporate earnings reports have generally been positive globally, helping most markets stay near all-time highs. S & P500 futures suggest Wall Street will open down -0.2% after a record close last week.
MAINTAINING SWAP RATES & BONDS
We do not yet have today’s swap closing rates and if there are any significant changes going on, we will note them here. They are probably higher with the 1 year up +2 bps, the 2 year up +3 bps, and the 5 year up +5 bps (H / T Nick Smyth). The 90-day bank note rate is unchanged at 0.65%. The benchmark ten-year Australian government rate is up + 4bp to 1.22%. The ten-year Chinese government bond is unchanged at 2.83%. The ten-year New Zealand government is however up +1bp to just 1.63% and now below the previous RBNZ corrective of 1.66% (+4bp). The ten-year US government is now at 1.31% and up +7 basis points today and is strengthening on the back of robust US payroll data.
THE NZ DOLLAR IS CLOSED
The Kiwi Dollar has been slightly firmer than where we opened today, and now at 70.2 USc and essentially holding. Against the Aussie we are unchanged at 95.4 AUc. Against the euro, we are firm at 59.7 euro cents. The TWI-5 is still at 73.3 and stays put.
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BITCOIN HOLD HIGH
The price of bitcoin is now US $ 43,424 and virtually unchanged from where we started today. Volatility over the past 24 hours has been moderated at +/- 2.9%.
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