An overview of things you need to know before you go home on Tuesday; Westpac Raises Mortgage Rates, QV Sees Real Estate Worm Spin, AML Action Heats Up, Bitcoin Sinks, Swaps Soft, NZD Holds, & More


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These are the most important things to know before you leave work today.

MORTGAGE CHANGES
Westpac succeeded Kiwibank for fixed interest rates of 3, 4 and 5 years. But it did not follow Kiwibank on the 1-year rate. More here.


DEPOSIT TERM CHANGES
Heretaunga Building Society and the NZCU Baywide group all raised TD rates today.

THE PROPERTY WORM RUNS
Qualified Value says average home value growth is slowing and is likely to slow further.

SERIES LOW
RBNZ data released today for April (B6) shows that business loan interest rates have fallen to a new series low. This loan yield is now just 3.18% a year, the lowest since this streak began in January 2017. The interest on business loans follows the mortgage interest downwards.

AML HEAT INTENSIVE
air city (SKC) says Australian regulator AUSTRAC has identified ‘potential serious non-compliance’ with money laundering and counter-terrorism financing rules at SkyCity’s Adelaide Casino. AUSTRAC is also investigating Crown Perth. And it is too carry down at NAB for slow fixes for their AML procedures.

POLICE TRUMPET ‘HUGE BATTLE’ FOR ORGANIZED CRIME
As part of a major international operation, New Zealand police have made 35 arrests, filed more than 900 charges and seized $3.7 million in assets. These actions are part of three major organized crime investigations targeting the import, sale and supply of methamphetamine and money laundering. Police say senior members of the Waikato Comancheros, Waikato Mongrel Mob and Head Hunters have been arrested. About 20 ounces of meth plus a range of other drugs, weapons, vehicles, boats, cash and cell phones were seized. police says: these operations are a “huge blow” to organized crime.

S&P REVISES OUTLOOK OF 3 BIG BANK CREDIT RATING TO ‘STABLE’
S&P Global Ratings has revised the outlook for the credit ratings of ANZ, ASB and BNZ from ‘negative’ to ‘stable’. S&P also confirmed the AA ratings of the three banks. The move comes after S&P revised its outlook for Australia’s AAA government bond rating to stable, which trickled down to the Aussie mothers of New Zealand’s largest banks. However, the outlook for Westpac NZ’s AA rating remains negative as the Westpac Banking Corporation considers splitting its Kiwi subsidiary.

VACCINE GETTING POWER UP
The New Zealand Government says Pfizer has scheduled to deliver an estimated 1 million doses of vaccine to New Zealand in July.

TAPERING ADJUSTMENT:
As part of a general fundraiser tapering already spotted by Treasury, their Debt Management Office has launched a new coupon of 2.00%, nominal bond dated May 15, 2032. Given the timing of the launch, they canceled their tender (#772) scheduled for June 10, 2021.

A MAKEUP WEEK
Last week the capitalization of the NZX50 rose very strongly, at +2.5% for the week which is up more than +5% since September 50. However, this +$3.1 billion in capitalization increase in the week only makes up for part of the decline of the past four weeks. Last week’s big winner was Intratil (IFT), which rose two places to #8. Heartland group (HGH) fell two places to #29.

LOCKDOWN TILL END
The Australian state of Victoria has said it is on track to end the lockdown at midnight on Thursday.

EXCEPTIONAL LEVELS
Business Terms in Australia rose to a new all-time high (now +37 index points) in May, driven by further gains in every key area. But unlike in other countries, the price aspect doesn’t zoom out any higher, not anyway. Decisions in the boardroom to invest are very strong. NAB also says the Australian economy is now bigger than before the pandemic, and growth will be strong in the second quarter of 2021.

GOLD STRONG
Compared to this time on Friday, the gold price is up +US$36 and now at US$1900/oz. It closed in New York at the same US$1900/oz and in London at US$1888/oz.

SHARES ARE POSITIVE
Wall Street was unable to move all the way into positive territory today, with the S&P 500 ending -0.1%. The Tokyo market started at +0.3% and is matched by Hong Kong so far. Shanghai is up +0.2% in early trading. The ASX200 is up just under +0.1% early in the afternoon and the NZX50 Capital Index is heading for a gain of +0.3% by the end of the session.

SWAP & BONDS RETURN SOFT
We don’t have any closing prices for today. If there are again significant changes today, we will update this item. The 90-day bank rate remains unchanged at 0.32%. The Australian government’s 10-year benchmark is unchanged at 1.60%. The ten-year Chinese government bond has changed little at 3.12%. The New Zealand government ten years from now is down -4 bps to 1.82% and is now the same as the previous RBNZ fix of 1.82% (-2 bps). And the US government is up +4bp in ten years to 1.57%.

NZ DOLLAR KEEPS
The Kiwi dollar fell very slightly in trading today to US$ 72.3, but it held gains for most of the weekend. Against the Aussie we have changed little at 93.2 AUc. Against the euro, we are firmly at 59.3 euro cents. That means the TWI-5 is now at 73.8 and is only marginally lower than where we opened this morning.

Bitcoin sinks
Bitcoin price now stands at US$32,640 and is a very sharp -8.5% lower than where we opened this morning. The volatility in the last 24 hours is back at extreme levels, +/- 6.7%.

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