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The Reserve Bank cuts Official Cash Rate to 3.25% from 3.5%

Bonds
The Reserve Bank cuts Official Cash Rate to 3.25% from 3.5%

The Reserve Bank has dropped the Official Cash rate to 3.25% from 3.5% - the first lowering of interest rates since March 2011 and following four rate hikes last year.

The latest decision outlined in the bank's Monetary Policy Statement was something of a surprise. It had been seen as a 'line call' by economists with several expecting a cut and slightly more expecting a "hold" decision.

The RBNZ has factored another potential cut of quarter of a percentage point into its forecasts over the next year.

Dollar drops

The Kiwi dollar, which had been pushing up against US72c, immediately dropped to US70.6c. Against the Australian dollar it dropped to A91.2c from A92.8c. Later in the day the Kiwi was sitting just above US70c. It was briefly last below US70c on September 1, 2010. Stronger than expected employment figures across the Tasman pushed the Australian dollar up and as of Thursday evening the Kiwi had declined to A90.4c, with all thoughts of parity vanished.

Both ASB and Kiwibank immediately announced drops in their floating mortgage rates after the RBNZ decision, followed a short time later by the ANZ, New Zealand's largest bank, which has argued stridently for the RBNZ to cut rates.

Banks move on rates

Kiwibank has reduced its variable and revolving rates from 6.65% p.a. to 6.40% p.a. with the reduction to take place immediately for new customers and in two weeks for existing. ASB dropped its variable home loan and Orbit home loan rates by 0.25bps from 6.75% p.a to 6.50% p.a effective 8am Friday 12 June for new customers and 8am Friday 19 June for existing customers. ANZ is lowering interest rates on its Floating and Flexible home loans by 0.25% p.a. – to 6.49% for ANZ Floating Rate Home Loans, and 6.60% for Flexible Home Loans. The new rates will take effect for new ANZ Floating Rate Home Loan customers from Monday 15 June, and for all existing Floating Rate and all Flexible Home Loan customers from Monday 29 June. See full details of bank rate cuts here.

The RBNZ has clearly become extremely concerned about the impact of falling dairy prices. In its latest Financial Stability Report last month, the RBNZ warned that financial stress in the dairy sector "could rise markedly" if prices remain at low levels in the 2015-16 season. The RBNZ says that despite many farms being in a position to manage down working expenses, around one-quarter of dairy farms are believed to have had negative cash flow for the 2014-15 season.

Just yesterday, dairy giant Fonterra announced it was likely to shed "hundreds" of jobs from its head office and support functions.

Commodity price problems

Governor Graeme Wheeler said in announcing today's rates decision that the fall in export commodity prices that began in mid-2014 "is proving more pronounced".

"The weaker prospects for dairy prices and the recent rises in petrol prices will slow income and demand growth and increase the risk that the return of inflation to the mid-point [of the 1-3% target] would be delayed."

In the MPS document the RBNZ has drastically revised its expectations of the terms of trade, picking them to fall 8.4% in the March 2016 year and then climbing just 0.1% the following year. In its March forecast, the bank expected terms of trade to be just 3% lower in 2016, before gaining 1.4% in 2017. Terms of trade measure the value of imports that can be purchased by a set amount of exports.

Wheeler said with the fall in commodity prices and the expected weakening in demand, the exchange rate had declined from its recent peak in April, but remained overvalued.

"A further significant downward adjustment is justified. In light of the forecast deterioration in the current account balance, such an exchange rate adjustment is needed to put New Zealand’s net external position on a more sustainable path."

Kiwi dollar 'over-valued by 7%'

Asked this morning about where he felt the NZ dollar should be in terms of a sustainable value, Wheeler said the RBNZ always avoided doing that. However, he cited some Peterson Institute for International Economics research in May, which indicated the Kiwi dollar was over-valued by about 7% "but they wouldn't have built in the latest dairy and commodity prices". 

This is what Governor Wheeler had to say in his statement:

The Reserve Bank today reduced the Official Cash Rate (OCR) by 25 basis points to 3.25 percent.

Growth in the global economy remains moderate. Data on economic activity in the US, China and Australia has been mixed, although there has been some improvement in the euro area and Japan. Volatility in financial markets has increased.

The New Zealand economy is growing at an annual rate around three percent, supported by low interest rates, high net migration and construction activity, and the decline in fuel prices. However, the fall in export commodity prices that began in mid-2014 is proving more pronounced. The weaker prospects for dairy prices and the recent rises in petrol prices will slow income and demand growth and increase the risk that the return of inflation to the mid-point would be delayed.

Inflation has been low due to falling import prices and the strong growth in the economy’s supply potential. Wage inflation and inflation expectations have been subdued.

With the fall in commodity prices and the expected weakening in demand, the exchange rate has declined from its recent peak in April, but remains overvalued. A further significant downward adjustment is justified. In light of the forecast deterioration in the current account balance, such an exchange rate adjustment is needed to put New Zealand’s net external position on a more sustainable path.

House prices in Auckland continue to increase rapidly, and increased supply is needed to address this. The proposed LVR measures and the Government’s tax initiatives planned for 1 October 2015 should ease the impact of investor activity.

A reduction in the OCR is appropriate given low inflationary pressures and the expected weakening in demand, and to ensure that medium term inflation converges towards the middle of the target range.

We expect further easing may be appropriate. This will depend on the emerging data.

This is a report from BusinessDesk's Paul McBeth on the rate cut:

June 11 (BusinessDesk) - The Reserve Bank cut the benchmark rate a quarter-point and signalled more may be on the way as the dairy sector's weak outlook weighed on the nation's terms of trade and threatened to delay an increase in inflation from its near-zero level. The New Zealand dollar dropped almost a cent.

Governor Graeme Wheeler lowered the official cash rate to 3.25 %, in a closely watched decision where markets were largely split on whether he would cut rates now or later, saying a more pronounced slump in export prices than expected and the prospect of waning consumer demand on increasing petrol prices threatened to keep a lid on already low inflation.

“The weaker prospects for dairy prices and the recent rises in petrol prices will slow income and demand growth and increase the risk that the return of inflation to the mid-point would be delayed,” Wheeler said in Wellington. “A reduction in the OCR is appropriate given low inflationary pressures and the expected weakening in demand, and to ensure that medium-term inflation converges towards the middle of the target range."

"We expect further easing may be appropriate."

The bank expects the country's terms of trade will be about 5% lower than in its March projections, primarily on the sharp decline in dairy prices, which suggested monetary policy needed to be more stimulatory to stoke inflation back into the target range of 1-3% annually.

Before the announcement, traders had been pricing in a 40% chance Wheeler would reduce the benchmark rate for the first time since the March 2011 emergency cut in response to the Canterbury earthquake.

Persistently low inflation, compounded by a strong New Zealand dollar, prompted some analysts to question why Wheeler hadn’t cut, and the view gained momentum after the Reserve Bank and government both unveiled responses to try and cool Auckland’s housing market.

Wheeler had already dropped his reference to the possibility for interest rates to rise at the April review.

The central bank lowered its track for the 90-day bank bill rate, often seen as a proxy for the OCR, seeing it fall to 3.3% in the December quarter of this year, and bottoming out at 3.1% in June 2016 where it stays over the bank's forecast horizon until June 2017.  In its March forecast, it predicted the rate would stay at 3.7% through to March 2017, the end of the forecast horizon.

New Zealand’s consumers price index rose a 0.1% in the year ended March 31, after two quarters of contraction kept a lid on inflation. That’s below the central bank’s target band for inflation to be between 1% and 3%.

The central bank expects annual inflation to rise more aggressively on a weakening exchange rate and increasing petrol prices. The bank forecasts annual CPI will advance to a 1.6% pace by March next year, before reaching 2.1 percent in December 2016.

The trade-weighted index was at an average 75.96 in the March quarter, below the Reserve Bank’s projected level of 77 in the March forecast, and the central bank sees the TWI gradually declining to 71.4 over the horizon.

Wheeler dropped his reference to the kiwi dollar being unjustifiably and unsustainably high, explicit criteria for the central bank to intervene in foreign exchange markets, saying it was still overvalued  and "a further significant downward adjustment is justified."

The slow recovery in global dairy prices and peak of the Canterbury rebuild has seen some optimism over the pace of the nation’s economy taper off in recent months, and the Reserve Bank stripped out about 0.5 of a percentage point from its forecast economic growth in 2016 and 2017 March years.

The central bank moved toward an easing bias on interest rates only a little more than a month ago, first in a speech by assistant governor John McDermott and then backed up a week later on April 30 in the last OCR announcement.

Those rate hikes last year can with the enormous benefit of hindsight be viewed as a mistake. Inflation pressures that the RBNZ believed would start to surface were washed away by unpredictable counter-inflationary pressures such as the massive fall in oil prices and continued high New Zealand dollar.

Growing numbers of economists had been picking that the RBNZ would drop interest rates. In fact some of these predictions almost amounted to calling on the central bank to drop rates, which is interesting. The ANZ in particular has been quite strident and was again this week pushing for a rate reduction.

But the RBNZ had been cautious in the face of a very hot Auckland housing market, mindful that dropping interest rates quickly could provide more fuel for the housing market.

The RBNZ and the Government have both announced measures and aimed at the overheated Auckland house market, with a given start date of October 1.

But in the meantime the Auckland market has shown no signs of slowing

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74 Comments

Come guys -- what are (will be) your mortgage rates after this drop and under the expectation of further drops?

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The banks will I suspect match it every time as the first bank that doesnt will be walloped publically. Yes more drops as the world gets worse and worse I think we'll see more cuts. The 4.25%? OCR predicted not so long ago is indeed looking like never, 3.5% was it. <3% by xmas? 2.5%? by xmas? 2%?

maybe DC can put up one of those survey thingies or maybe a bet on predict?

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Yes - valid pt. On the flip side it could cause concern to foreign investors, especially those with currencies tied to the US$. Further drops in NZ/US are virtually guaranteed to follow the 20% already seen. If there is no effect then its all about safe haven status..

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That will be the first of at least three cuts this year!

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Expect to see house prices throughout the Auckland area surge to even higher levels.

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...yep..running away ...but like a balloon with a hole in it.

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yep and like the end will go faster then when runs out of puff will fall slowly back down.

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HA! Who has egg on their face? I would say 'well done RBNZ', but you're just doing your job. Finally.

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Going to need binoculars to see the Auckland housing market.

Until it's out completely out of sight, and one day in about two years, a small shadow emerges until it eventually splatters all over the sidewalk.

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Finance getting even easier to obtain eh Keyser.

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he has realised he cant stop the great Ponzi scheme and it is now hurting consumer spending with more and more money going on housing I don't think this will help and it will carry on even worse. it will be interesting what will cause the pop and he has realised there will be one so let it happen. Fed interest rate hike in September, immigration slowing as Auckland becomes too expensive, companies laying off staff to combat the slow down, china stock market bubble, plenty of clouds on the horizen

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Bravo. Wheeler sees impending doom in Auckland housing and the export sector. He's made it clear which should be protected.

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The axiom of most central banking is to “buy time” so that any deemed improper imbalance can be retrieved, set aside and allow for restoration of positive function. Colloquially, it is often referred to as “extend and pretend” not just because of intended affront but rather due to how fitting the circumstances so often apply. In other words, central banks never seem to face up to the fact that the very “problem” they are fighting against is actually itself the restoration of positive function. But because that is typically delivered via violent disorder, the central bank positions itself not in favor of healing but rather just restoring order for the sake of restoring order (the financial equivalent of “aggregate demand” or spending for the sake of spending). Read more

Prodding the nation to further indebt itself shopping for shelter while praying for China to reappear on the export horizon is futility in the extreme.

Reform continues, instead, through the PBOC’s restraint where it has proved it will only act in very narrow and what it has determined as useful conduits. The resolve to do so seems only to strengthen despite what is clearly a looming economic crisis, one that gets closer with every data release. Read more

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When pressed last time you'd prefer to see interest rates rise - that's a great idea. It wouldn't have any ill effects at all. Which leads me to ask, cast your mind back and remind me how you earned your crust?

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I live off my wits and I don't have more property than the house I live in, no debt and I trade this portion of the curve, if I feel driven to bother - trades tied to an O/N rate have too little duration risk for my taste. And I know how to buy and sell/short.

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So you are poor then Stephen :)

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Thankfully, people have different measures for what they consider poor and wealthy.

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more like in control of his own destiny and not beholden to anyone congrats

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"If I was in any doubt that property has consumed this country utterly, I doubt it no more. I actually wasn't in doubt to be frank. I mean your powers of observation would have to be stunningly feeble, if you hadn't noticed by now the obsessive fascination....." (Dublin. May 2007)
http://irish-property-bubble.blogspot.co.nz/
Now all countries are different. And what happens in one place may not happen in another. But that is also what was said elsewhere....
Did Ireland learn its lesson? Yes...and No. Their Bubble is returning and if there's one thing that's in common today, with 'then', it's that 'This time it's different....'

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I don't think house prices will rise because of this cut in rates.
Quite the opposite. There may be a blip upwards until it dawns on folk that the economy is going to face some stiff head winds as jobs get lost and business profits fall.
If the dairy industry sneezes the whole country gets a cold.

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I very much agree with you BD......people seem to be forgetting where the horse that does the pulling stands.

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Spierings.... there could be a $1.50/kgMS swing either way to the 2015/16 forecast
http://www.sharechat.co.nz/article/b9b75177/spierings-says-he-ll-fight-…

$5.25 - $1.50 = a lot of pain and not just for farmers - if it plays out that way.
Funny how that is hidden away and shareholders haven't been told. And they wonder why farmers say their communication sucks. Rather than keep hammering away with the 'we urge farmers to budget with caution' message, they should just come out and say it like it is - prediction is $5.25 plus or minus $1.50.

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because of the confidence game. They are taking pages from the RB's and Govn's script that when "negative" things are spoken they tend to be self-fullfilling. So they word things with half-hidden get out clauses just to cover themselves.

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Most shareholders who have been around for a while recognise that. One also learns to read in to the nuances they use when talking about caution.

The biggest change for shareholders is that they used to announce payout predictions based on what was being returned at the time. That way farmers were able to budget better. These days they basically guess at what they hope to achieve - it doesn't relate to the situation at the time.

I have long believed that there is government 'interference' in Fonterra's announcements.

I did hear today that there maybe another 5cents added to last years payout. And that it won't go down. Place your bets folks......;-)

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Geez CO I was shocked 17 riding in the $1mill salary package and that was down from 24! Udderly ridiculous!!

I agree they should have been very up-front on the prediction front...in fact is it not misinforming shareholders?

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Don't know, might be a big blip! Australian and Canadian govt are cracking down on foreign purchases, Singaporean govt is putting more restrictions, . Wealthy Asians need to run their money, NZ might be the only place left that they can buy freely.

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maybe only next election, all three opposition parties want to ban, don't be surprised if national restricts it to new builds to take the wind out of their sails

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National will flaunt a bit of this and that but it will all be wind. To paraphrase JK " Look, at the end of the day this RB act is an admission that the country is heading down a dark and gloomy road and immigrants building houses for immigrants is the only game in town at the moment. It needs all the oxygen it can get - at least till I pack for Hawaii then Crusher can take the fall"

Indeed Collins seems eager to keep herself in the public eye at the moment, commenting on several miscellaneous subjects from the back bench - presume she has been given permission from the commenter-in-chief who seems at times reluctant to let any of his cabinet talk on TV.

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I think you're wrong. So long as there is only a few impediments for foreign buyers, prices will keep going up. Even more so now that the NZD is going down, hence our houses just got cheaper on the global market.

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Finally doing what they should have done 18 months ago......Wheeler should have doubled the amount he dropped it by.........and had aggressive language that our economy is not in great shape!!

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Actually he should never have raised rates. Plus he cant say that or he'd cause a panic.

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Well I did say that he should have made this move 18 months ago did I not??
The fact is because he has taken so long to take action other issues have now built up in the economy!! Wheelers failure to take action when he should of is going to cause pain for some and that pain could have been avoided.

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totally right BD - the majority of people are now on fixed rates - well below the floating anyway - so a cut in floating will have little effect - we are already at the edges of affordability for repayments on the lowest rates - 5.1 5.2 for short fixes - so home owners and first time buyers - and ultimately that will limit the stopping point in the market for those purchasers - and with increased LVR ratios and zero yields in Auckland - kill off investors - leaving only speculators and foreign buyers - not enough to keep the market going up for much longer!

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Bubbles, generally come in one of 3 forms; physical, financial or psychological. If there is an imbalance of the building blocks to any of those - too much/not enough building; too much/not enough debt; too much/not enough confidence, a Bubble can form. So what is arguably the worst Bubble there is? One with a physical imbalance,a debt imbalance and a confidence imbalance? Perhaps! But if New Zealand has a set of circumstances that should frighten Graeme Wheeler its - not enough property supply; too much ( and too cheaper) credit and a buoyant community expectation that prices can only rise.....If any or all of those reverse, slashing interest rates to 0% and returning the LVR to 100% isn't going to help us; especially if Others are having a return to the Tough Times of a few years back.

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yes it wasn't long ago 2008/09 a lot of people got layed off, lost money, made bankrupt. I was a blessed ironically 2 ended up at Fonterra and are now again in the firing lin2. for those that live in Auckland that think we are fine go to the country or talk to country folk and they will you how big an effect the dairy pay out is having and this will feed on as that is a huge part of the economy,

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Chuckle chuckle... one week Wheeler moans about the price of houses. The next week he cuts interest rates and (at the very least) helps maintain house price levels.

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In respect of central bankers it's always a case of don't listen to their words, watch what they do.

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he is more worried about diary than house prices

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sharetrader, you are much too apologetic for Wheeler. His 'status' has blinded you as to his need to even be around.

Like all RB guv'ners, he meddles in things people voluntarily involve themselves in to make his job look necessary to the economy. He doesn't want to lose his pay so finds an issue to stir up and thus people think he is doing something important.

But this guv'nor is worse. A self-appointed maker of laws, far outside his remit. What happened to democracy? My view is Wheeler should bugger off and leave people alone to get on with their lives.

All RB guv'nors are miserable types of personalities (it's necessary for the job description), but this guy tops 'em all. What's not to worry about Mr. Wheeler?

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I'm glad he's going beyond his remit - last thing we need is more "not my job"ers, when it really is affecting what should be his job.

But he's trying to steer the vehicle, where all he's been allowed to do is activate the spinning mouse, and the only tool he has is an anchor.. What's need is the clowns who are supposed to be steering to look aft er NZ not China.

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YL - Its no laughing matter. What Wheeler is practically telling us today is that going fwd we are in very poor place and city job losses will soon be feeding through from what is happening down on the farm. High house prices and those mortgaging themselves to the hilt in the big smoke Ponzi will be simply collateral damage. When the smoke clears guess what - it won't be different this time either?

How does anyone with a large mortgage, one earner and several children sleep at night? Sell to the first Asian you see. Mind you they might even start backing off when they see the potential exchange rate risk they are taking on.

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Maybe those overseas speculators, some of them who brought in their cash at USD 0.85, have not seen any real capital gains and will now have to contemplate on any more gains available to them when the Aucklnd property market softens. If they are also running on borrowed money as well they may have second thoughts on their decisions.

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...or maybe their home currency has dropped even more than the NZD. Which would mean they are in the money!

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China is tied to the US$ (Kiwi down 20% vs US) and also the TWI has dropped recently from 82 to 0 75.
Maybe people from Zimbabwe will be in the money.
If Wheeler's actions are largely due to the state of the rural sector what target does he have in mind for the the Kiwi - high 0.50's perhaps vs US$ might put a smile on the cockies and what is left of Fonterra management.

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best buy all those big ticket items now with our dollar dropping prices will be going up
http://www.cnbc.com/id/102750129
How low will the Kiwi go?
It's likely to hit 68 U.S. cents over the next one to two months, warned Jonathan Cavenagh, senior FX strategist for Asia at Westpac Institutional Bank.

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"Those rate hikes last year can with the enormous benefit of hindsight be viewed as a mistake."

Yeah _Who_ could have possibly predicted that.
(considering that _every_ peak dairy year was also followed by an immediate crash, for 100% of the recorded time.)

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"the strong growth in the economy’s supply potential. " or in english over-capacity or lack of demand.

Who would have expected it? oh a few nobody's.

So more cuts this year I expect.

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Hey all, interest rates are rising. It's only at the short end they are falling.

American longer-bond yields are still rising. Looks like New Zealand might be getting a much steeper interest rate yield curve developing.

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Yes indeed , the short end of the curve is where retail over leveraged residential property investors expose under capitalised banks to financial stability issues, hence a risk to the whole country - industrial sized players tend to roam the halls of the bond markets - they take no prisoners when things look bad - it's the old story - those that sell first, sell best - the RBNZ governor is shooting for the fish in the barrel victims at this stage - obviously some at the high end of town have yet to unload.

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The $NZD:$USD cross is toast - it's going sub 60c fast IMO - feeds into the bigger themes. No indecisive trading here when the US funds get back to their desks, rarely has there been a clearer trade IMO.

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Paradigm Change: $NZD rate decrease when worldwide bond yields are increasing - premium is off, demand is off - carry traders running for the hills. $NZD assets will tank - exits are not big enough, air pockets. Who wants to own assets in a currency that could tank 25%?... who wants to invest in a currency that could tank 25%?.... until that ship has sailed.

RBNZ at the bequest of Dairy; not an implicit gov't backstop, but not light years off it? AKL property is simply a lagging function of the WMP price & will revert to mean. AKL's mobile workforce wants to work in an economy with a strengthening currency so property supply increases as the skilled seek exotic fresh pastures to graze on.

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This really is a no-brainer: http://www.cnbc.com/id/102750129

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I like this snip from Warren Buffett ...

. . . the less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs.

http://www.zerohedge.com/news/2015-06-09/how-measure-risk

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Yes will be interesting to see those swimming naked, when the tide goes out....

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I think you will find it will be all of us. ie once the system teeters on collapse the Govn will rush in and fix any moral hazard / whinning / stability issues which we and are our children will spend 50 years paying off.

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*WHEELER WANTS TO SEE SUBSTANTIAL FALL IN AKL HOUSE INFLATION - Parliamentary testimony at 1pm

I suspect Graham needs an economic lesson on what not to do to achieve his "wants :-)

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giving foreign money more buying power, without closing the door is going to exactly the opposite

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I think Wheeler is saying to the government "I have done as much as I can to stop the Auckland housing market inflating I need to look after the rest of NZ now. So it is over to you to do something. Good luck we may need it".

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I can solve the Auckland Housing issue for all New Zealanders.

Zero foreign ownership Allowed. Full Stop like Japan.

locked and Capped resident population for 5 years at current level.

If previously foreigner and now New residents to NZ... must live in new zealand for 10 years before being able to purchased any property.

Kiwis must stand up to protect what they have left. stop selling your wealth kiwi assets to overseas in spite of your own children and the next generation.

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I was visiting in Tauranga this past weekend, and, Wow! Maybe it's my imagination but the streets were abuzz with "J" reg cars and MPV's being driven by what appears to be.....let's call them New New Zealanders. In past visits to the City of the Nearly Dead it's something I just haven't noticed....

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If I was you I would have put a question mark after the word "driven"
God help us if they make it further afield and start buying up the baches.

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Yes fully agree .... "Zero foreign ownership Allowed. Full Stop like Japan." Lets do it.

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Tauranga is growing, but sooo so cheap, far too cheap for what is on offer.

Compared to Auckland. I can sell you a 15 year old 3 bedroom 2 story house for under $265,000 free hold land and zero maintenance, decks and garage. In Parkvale just 2 min walk to Greerton shops and overlooking a reserve..

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compared to Auckland cheap, compared to job prospects and income not so much

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Plenty of jobs in Tauranga in-fact there is a labour shortage, income is much less yes. all is relative to expenditure. The only winner in the Auckland house market is the Australian banks and the Australian economy. Better free cash flow even with less income. 40k income you can live ok in Tauranga.

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Not that many. I live in Tauranga and I have had to see friends leaving the city due to a lack of opportunities.
There are not many qualified jobs over here and some areas are vastly overpriced and hurt productive economy. In fact it's way cheaper for us to rent in Auckland than to rent in Tauranga if we do the maths about salaries we could get in the big city. Yet we prefer Tauranga because we can't stand Auckland :-)

I will buy in Tauranga when prices meet what it's considered a normal income/price ratio for the area. What concerns me is that Tauranga suffers a lot when commodity prices fall, and the fact that RBNZ cuts interest rates and talks about further cuts is a signal that economy is facing serious issues.

I hope you sell quickly enough. Things don't look too good in my honest opinion..

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are you NZ born Muntijaqi? some times you just have to stay in one place long enough. Jobs are often word of mouth in Tauranga. There are lots of jobs. One Job often leads to another.

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nope. I've been in NZ for 5 years jumping around till I found "home" in Tauranga :-)

I've got a good qualified job in IT so no complaints about my situation. Luckily IT is everywhere to some degree..
The concern is that there are not that many tech companies outside Auckland, Wellington or Christchurch, so if things don't go as expected or I get bored I might have to flee back to a big city simply because I'd run out of company options!

Another problem I see is for partners of people with qualified jobs often not being able to find anything good and often slightly above minimum salary. That's why I say that comparing situations and the salaries offered in Auckland, for renters like ourselves, the main reason to be in Tauranga cannot be an economic one.

Rents are quite high. Not much good offer and many good spenders holidaymakers competing for accommodation I suppose.

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In Tauranga we have Tauranga Port and The horticulture sector growing Kiwifruit and Avocados.
Also Tauranga has the countries largest mussel processing factory.

if you cant use your brain and your body at the same time best stay in the major cities as less technological and more physical hands on employment in general in Tauranga..

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well observed.

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it shouldn't matter if he is NZ born or not if he is the best person for a job.

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Last time floating rate dropped was 2011.
Last time before that was October 2008.
So, High interest rates are always maintained too high for too long in NZ.
And, the 4 hikes in 2014 were unnecessary and have inflicted a lot of damage in the regions.
Will there be any refunds on break fees over the next 12 months as the global economy goes into free fall?
Remember the OCR was supposed to be heading for 4.5% by now.

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NZ is always out of step with the rest of the western world so if we are heading for a recession or very slow growth then I take heart in maybe the U.S. and Europe are both back on the growth path, unfortunately we are tied to the Australia and Chinese market more now and with both those slowing that will affect us

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