A review of things you need to know before you go home on Wednesday; Heartland cuts mortgage rates hard, job ads rise sharply, LGFA bond wildly popular, power prices ease, swaps steepen, NZD softer, & more
Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGESHeartland Bank has chopped both its floating and one year fixed home loan rates hard. More here.
TERM DEPOSIT RATE CHANGESCooperative Bank raised their one year and 18 month rates to 1.10% for both terms.
NEW FEE CURBS COMINGThe Government is to empower the Commerce Commission to regulate fees charged by banks and card companies that are paid by retailers and other small businesses.
SNAPPING BACK SHARPLYConsistent with a sharply improving labour market, the latest BNZ-Seek employment report records a +12% year-on-year rise in job ads, a second consecutive month it has been growing this fast. The sharp improvement is led by fast-returning demand for the hospitality and tourism sectors.
WILDLY POPULARYesterday we reported that the Local Government Funding Agency (LGFA) is launching a fixed rate bond offer and cancelling its 12 May 2021 tender. The book build is underway and it is proving to be wildly popular. The offer is for $300 mln in unsecured, unsubordinated, fixed rate bonds with a maturity date of 15 May 2031 and with the ability to accept unlimited oversubscriptions. As of this morning (9am) they had been offered more than $900 mln, so they revised the indicative interest rate margin lower. In excess of $570 mln is within the revised lower indicative Margin range. But that is sure to rise as the book build didn’t close until 2pm today.
STRESS EASINGFinally, wholesale electricity prices are starting to ease, dropping below $200/KWhr. That is still high but over the past week it has been shifting lowqer by the day. In 2019 and 2020 the average price was $108/KWhr in each year. So far in 2021 the average price has been $230/KWhr. (Haywards benchmark.)
STELLAR RESULTSIn Australia, banking behemoth CBA reported a quarterly profit of AU$2.4 bln, double that for Q1-20 and +40% higher than Q1-19 (calendar quarters, not financial year quarters). That was on the back of it’s lending to business growing at three times the average of the other banks and growing its home loan market share too. They are proving that banking is a volume business, especially when margins are falling. Their credit quality is improving. No customer has to bank with CBA; there are good alternatives. But they are winning customer support and their profits are rising. (ASB got barely a mention in these results, other than one positive comment.)
GOLD SOFTThe gold price is down to US$1828/oz a drop of -US$9 from this time yesterday. New York closed at US$1838, so it is falling sharply in early Asian trade.
EQUITIES LOWER WORLDWIDEThe S&P500 ended -0.9% lower on Wall Street earlier today as their trading succession stayed negative as reflation fears were front of mind today. In Tokyo, they have opened down another -0.6% after yesterday’s large retreat. In Hong Kong their open is up a tiny +0.2% after yesterday’s large fall. Shanghai has opened flat. Meanwhile in Australia, they have shed another -0.6% in their morning session. The NZX50 Capital Index is down -0.4% to complete the sell-off trend.
SWAPS & BONDS MIXEDWe don’t have today’s closing swap rates yet. If there are significant movements today, we will note them here later when we get the data. They are probably little-changed. The 90 day bank bill rate is down -1 bp at 0.37% and that is now its highest in more than a year. The Australian Govt ten year benchmark rate is up +6 bps at 1.73%. The China Govt ten year bond is down a rare -3 bp at 3.14%. But the New Zealand Govt ten year is up +4 bps at 1.85% and still above the 1.81% in the earlier RBNZ fix (+3 bps). The US Govt ten year is up +4 bps at 1.63%.
NZ DOLLAR SOFTThe Kiwi dollar is slightly softer today at 72.4 USc. Against the Aussie we are still at 92.8 AUc. Against the euro we little-changed at 59.7 euro cents. That means the TWI-5 is now at 73.9.
BITCOIN FIRM & VOLATILEThe bitcoin price is now at US$57,120 and recovering +3.0% or about half of yesterday’s drop. Volatility however has remained high at +/- 2.5%.
This soil moisture chart isanimated here.
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