A review of the things you need to know before you get home on Tuesday; no retail tariff changes, falling wholesale electricity prices, resilient welfare, insurers milking it, stable 2-year swaps, soft NZD, and more
Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report for the moment today.
CHANGES IN TERM DEPT RATES
None here today either.
Wellington is from move return to COVID-19 alert level 1 Wednesday. The travel bubble with some Australian states is expected to resume on Sunday.
BIG INCREASE IN THE BENEFITS OF THE TSB
of the BST Net profit for the year March after-tax jumped $ 12 million, or 39%, to $ 42.9 million. The increase came after the $ 20.4 million of impairment losses from the previous year were written off, with $ 2.2 million of loan allowance reversals in March 2021. Operating income was fell 1.6% to $ 161.9 million and operating expenses rose 1.75% to $ 104.5 million.
Wholesale electricity prices have halved over the past week, as lake inflows have increased rapidly and lake levels have risen, now above their long-term averages. (Our Auckland readers should note that although water storage levels have improved recently, which are still -25% lower than they should be this time of year.)
According to Westpac-McDermott Miller Regional Economic Confidence Survey, regional economic confidence was mixed in the June 2021 quarter. There was an even split between regions showing improved economic confidence and regions showing weakened confidence. Northland is the most pessimistic region; Most optimistic Waikato.
33% BETTER THAN THE BANK
Updated data released by RBNZ on the insurance industry in New Zealand shows that its profitability is higher than that of the banking industry. During the year to March 2021, banks earned on average 10.6% tax return on shareholders’ funds (a year ago it was 10.7%). The insurance industry gained 14.1% on the same basis (one year ago 14.0%).
WE ARE FINE THANK YOU…
The latest update on government favors well-being statistics (for the year through March 2021) shows that most New Zealanders have remained generally happy with their lives and have continued to find the things they do for a living worthwhile. This despite the past year, including the pandemic. Starting in the September 2020 quarter, Stats NZ also collected data on happiness. When asked to rate how happy they felt the night before, the proportion of New Zealanders who gave a high score of 7 or more out of 10 was over 80% in each of three-quarters. Groups who were less likely to be satisfied with their lives included the obvious, such as the unemployed and single parents.
… ALSO SLIGHTLY LESS SO
Similar Survey data released in Australia today, and they report a drop in “overall life satisfaction” scores, to 7.2 in 2020, down from 7.5 in 2019 and 7.6 in 2014. However, this data is from September 2020. More than half of Australians (59%) have experienced at least one personal stressor in the past 12 months. It was similar to 2019 (56%). A third of Australians (33%) said “Always” or “Often” felt pressured for time. Those in the 70 and over age group reported high satisfaction and little change. People in all other age groups reported a noticeable drop in life satisfaction in September 2020.
WESTPAC ALSO DISCONTINUING INSURANCE?
Australian news sources are report that Partners Life and Fidelity may purchase the life insurance business of Westpac NZ. But it still appears to be a “rumor” (from investment banking sources in Sydney) rather than a confirmed fact. BNZ did this a few months ago.
Kathmandu (KMT # 27) is signage that the Australian lockdowns are hurting its current operations. They currently have 40 stores closed in New South Wales for a minimum of two weeks, and another 26 stores closed in Western Australia for a minimum of 4 days from today. This follows the two-week lockdown in Victoria that affected 62 stores in early June.
All Australian states except South Australia, Tasmania and ACT have more stringent restrictions. Tensions between state governments and the federal government appear to be increasing. They weren’t good before that last squeeze, but they’re worse now.
In South Australia, they are to propose an internal export block on state logs because the whole country is facing a severe timber shortage and timber prices are rising sharply. Builders are pushing for an arrangement that keeps prices low.
A LOW BAR
Japanese retail data for May was released today and it arrived better than expected – meaning it didn’t fall.
Compared to the same time yesterday, the price of gold is unchanged at US $ 1775 / oz in early Asian trading.
MIXED EQUITY MARKETS
The S & P500 ended its Monday session today on an uptrend, up + 0.2% on the day after stagnating for most of the day. Tokyo’s very large equity market, however, opened smoothly and continues to decline, now down -0.9% by mid-morning. Honk Kong reopened after yesterday’s weather-related shutdown and was down -0.4% early in the session. Shanghai is down -0.8% in early trading there. The ASX200 was also down -0.8% at the start of the afternoon, while the NZX50 Capital index was up + 0.2% at the end of the session.
SWAP AND BONDS ARE HIGHER
We do not yet have today’s swap closing rates. If there are any significant changes again today, we will update this item. They are probably stable for the 2-year swap and therefore retain all previous gains, but the 5-year and 10-year swap rates are likely lower. The 90-day bank note rate is unchanged at 0.34%. The benchmark Australian government ten-year rate is down -7 basis points from yesterday at 1.49%. The ten-year Chinese government bond is also unchanged at 3.11%. The ten-year New Zealand government is however down -7bp also to 1.79% and the same as the previous RBNZ corrective of 1.79% (-4bp). The ten-year US government is down -4 basis points to 1.48%, but that mostly happened last night.
NZ DOLLAR PANELS
The Kiwi dollar has fallen steadily over the past 24 hours, now at 70.3 USc. Against the Aussie, we maintain 93.1 AUc. Against the euro we are soft at 59 euro cents. This means that the TWI-5 has now fallen to 72.8.
The price of bitcoin is now at US $ 34,705 and up + 0.6% from what we were at this time yesterday. Volatility over the past 24 hours has been moderated at +/- 2.0%.
This soil moisture table is animated here.
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