What happened Thursday | interest.co.nz

Here are the key things you need to know before you leave work today (or if you already work from home, before you shut down your laptop).

MORTGAGE RATE CHANGES
No changes to announce here today.

TERM DEPOSIT RATE CHANGES
ASB has raised term deposit rates for all terms up to 12 months. Its new 6 month rate is now 4.70%, up +15 bps. And its new 12 month rate is now 5.30% up +5 bps. That means it now has the highest rate offer for these two key terms of any of the main five banks, matching BNZ, but is still a long way below Co-op Bank and TSB at 5.00% for six months, and SBS Bank’s 6.00% for one year. Unity Money raised its TD rates today.

NEW “HIGH INTEREST” CALL ACCOUNT
Squirrel Money has launched a new ‘high interest’ call account. It pays 3.50% pa, making it the highest “no strings attached” interest rate of any savings account in the New Zealand market. Which is true, just. BNZ’s Rapid Save account pays 3.45%, although it does have a ‘string’ – only one fee-free withdrawal per month.

GOVT BOOKS IN GOOD SHAPE
Treasury released the Crown Accounts for November 2022, and they revealed a rather better improvement that was forecast in the HYEFU. Net debt fell to 19.2% of GDP when the HYFEU forecast it would be 20.2% at this time. The Operating Balance for the month exceeded +$3 bln, and the OBEGAL was +$351 mln, both better than expected (although November is traditionally when revenues exceed expenditure).

EARLY SIGNS OF STRESS
Those same Crown Accounts show that the sky-high employment is boosting taxes from payrolls which were up +21% in November from a year ago. But interestingly, we are seeing a rather sharp falling away in taxes collected from “Other Persons” which includes taxes from trustees and unincorporated small and micro businesses. These tax collections were -36% lower in November 2022 than November 2021. We should also note that GST collected was up +12% on the same basis (no doubt boosted by inflation).

NEARLY $1 BLN PA IN EMERGENCY HARDSHIP GRANTS
Ministry of Social Development data shows 592,000 hardship payments were made in the December 2022 quarter. That is up +4% in volume terms from a year ago, and up only +3% from the same quarter before the pandemic. But in value terms, these grants are up +40% from Dec-19 (ie pre-pandemic) driven by a +70% value rise for emergency housing grants (but these were actually lower overall in dollar terms from a year ago). From a year ago, the emergency housing grants are down -21% in value terms. For 2022, $935 million was paid out in all types of hardship grants, +9.0% more than in calendar 2021.

WORST AFFORDABILITY FOR FHBs
Getting into home ownership at the lower quartile level is now its most unaffordable in the history of interest.co.nz’s Home Loan Affordability Report. The decline in house prices has been more than offset by rising interest rates, pushing home ownership further out of reach for most aspiring first home buyers.

MTF UPDATES ITS TECH VIA ACQUISITION
MTF Finance has bought fintech online brokerage, Lending People, as it moves to grow “revenue and volume while offering a ready-made solution to transforming our digital product offering and technology platform.” Lending People is surprisingly large. It has processed over 230,000 loan applications through its proprietary origination software and generated hundreds of millions of dollars in loan advances for its lending partners.

A CAUTIOUS START
The Fair Pay Agreement system came into effect on December 1, 2022. However, MBIE notes that as of yesterday, no applications to initiate bargaining for a Fair Pay Agreement have been approved by MBIE. Is the cautious start because 2023 is an election year?

AUSTRALIA ON HOLIDAY
It is Australia Day, so their financial markets are closed, and most people are not working. Likely most will stretch it into a long weekend, so tomorrow will be quiet there too.

SHORT SELLER TAKES ON A TITAN
In a rare foray outside the US, a ‘respected’ short seller is taking on the India-based Adani Group, claiming it is an empire built on a con-job. Adani obviously rejects the ‘research’ behind the claim. You can read the research here. The company making the claims have taken some big scalps with prosecutions resulting from prior research. But none as big as Gautam Adani. In the day following its release, Adani lost NZ$8.5 billion. Shares in his company are down -NZ$17 bln. This will be fun to watch.

SWAP RATES EASE FURTHER
Wholesale swap rates likely slipped today. They in fact fell sharper than we indicated yesterday, but today’s fall will be less. The real action comes near the close, however. Our chart will record the final positions. The 90 day bank bill rate is down -5 bps at 4.85% – which is actually its largest fall since early August 2022. The Australian 10 year bond yield is now at 3.49% and up +4 bps from this time yesterday. The China 10-year bond rate is at 2.96% and unchanged of course. The NZ Government 10 year bond rate is now at 4.09% and down -2 bps, but still above the earlier RBNZ fix for the NZGB 10 year which is up +4 bps at 4.08%. The UST 10 year is unchanged at 3.45%.

EQUITIES UNREMARKABLE AGAIN
The NZX50 is heading for a +0.4% gain today. The ASX is closed for Australia Day. Tokyo has opened little-changed again. Hong Kong and Shanghai are still closed, of course, but Hong Kong will reopen tomorrow. Singapore is up +0.3% in early trade. The S&P500 ended on Wall Street earlier essentially unchanged too.

GOLD FIRMER
In early Asian trade, gold is firmer, now at US$1945/oz and up another +US$7 from this time yesterday.

NZD MARGINALLY LOWER
The Kiwi dollar is little-changed from this time yesterday, still at 64.8 USc. Against the Aussie we are now down more than -½c to 91.2 AUc. Against the euro we are little changed at 59.3 euro cents. That all means our TWI-5 is still at 71.4 and -20 bps lower.

BITCOIN RISES
The bitcoin price is up from this time yesterday, now at US$23,226 and up +3.1%. Today’s rise started happening at 9am this morning. Volatility over the past 24 hours has been high at +/- 3.2%.

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