tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, March 19th, 6:25PM

Investments

rss
The Markets

Swift market reaction as RBNZ calls time on money printing

The Reserve Bank of New Zealand surprised the market today with an announcement it will end its bond buying programme within the next 10 days.

Wednesday, July 14th 2021, 6:21PM

by BusinessDesk

Currency and bond traders reacted immediately, pushing interest rate swaps and the NZ dollar higher. 

Kiwibank chief economist Jarrod Kerr said interest rate swaps jumped 8 to 10 basis points with “more upside in rates to come”.

The yield on a 10-year government bond lifted more than 7 basis points, with similar movements across the yield curve. ANZ chief economist Sharon Zollner said the market was now pricing a 50% chance of an official cash rate hike next month.

The kiwi jumped half a cent from 69.64 US cents before the 2pm release to peak at 70.22 US cents afterwards.

Equity markets saw a more muted reaction with the benchmark index declining half a percent as share prices retreated on the prospect of higher interest rates. 

The S&P/NZX 50 Index fell 65.26 points, or 0.5%, to 12,719.68. Turnover was $207 million.

Offshore markets set the tone for this decline after inflation data in the United States prompted fixed interest rate traders to bring forward expectations of rate hikes in America.

“Stock market sentiment has soured on signs earlier rate hikes might be necessary,” said ASB economist Mike Jones. 

NZ’s market had already priced in a 25% chance of rate hikes at the RBNZ’s next meeting in August, but that possibility is now considered twice as likely after the abrupt end to bond buying.

Dual-listed Australian banks' shares prices declined after the announcement.

Westpac Bank dropped 1.6% to $26.82, ANZ Bank fell 1.8% to $29.39, and boutique lender Heartland Group was down 2% at $1.51.

The majority of stocks on the index fell, led by Vista Group International, which slipped 3% to $2.23.

Property and utility stocks were among the weakest on the day. Precinct Properties declined 2.9% at $1.68, Contact Energy fell 2.5% to $8.19, and Investore Property was down 2.4% at $2.00.

Travel booking firm Serko posted the day’s biggest gain, up 2.4% at $7.31.

In currency, the trade-weighted index was at 74.07 at 3pm, from 74.01 yesterday.

The kiwi traded at 93.73 Australian cents from 93.47 cents, 77.24 yen from 77.29 yen, 59.33 euro cents from 59.00 cents, 50.59 British pence from 50.41 pence, and 4.5263 Chinese yuan from 4.5285 yuan.

Tags: Market Close

« My Food Bag buoyed by Aussie takeoverKiwi dollar hangs onto gains after RBNZ boost »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

AM Update - Your morning business news update

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 ▼6.79 ▼6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 ▼7.29 ▼7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 ▼7.39 ▼7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 ▼6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 14 March 2024 9:32am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com