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A review of things you need to know before you go home on Tuesday; 90 day bank bill rates jump, IMF ticks NZ debt management, Fonterra offers GMP

A review of things you need to know before you go home on Tuesday; 90 day bank bill rates jump, IMF ticks NZ debt management, Fonterra offers GMP
For Tuesday, April 1, 2014. <a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

Here are the key things you need to know before you leave work today.

TSB AND CO-OP BANK LIFT TERM DEPOSIT RATES
There was a range of term deposit rate increases from TSB, while Co-operative Bank introduced a 4-month 'special'. Credit Union Baywide also upped both its TD and mortgage rates.

THE IMF WANTS NZ TO REPAY DEBT FIRST
IMF calls on the Government and Opposition to keep fiscal policy tight to help the RBNZ withdraw its stimulus from an economy growing above trend. It agrees the NZ$ is between 5 and 15% over-valued. It also says house prices are at elevated and risky levels.

AUCKLAND'S COMMUTER RAIL GOES ELECTRIC
Today was switch-on day for the Auckland rail system at Britomart, with every politician of all stripes claiming a 'win'. So far $1.7 billion has been 'invested. Currently there are 10 million rail trips annually on the system and after electrification this is expected to rise. 57 new electric trains will be progressively rolled out later in this upgrade.

RBNZ SURPRISED
The central bank says it was surprised how fast and effective its LVR policy has been.

FONTERRA TO GUARANTEE MILK PRICE
After a 'successful trial' Fonterra is offering its farmer suppliers nationwide the opportunity to sign up for a guaranteed price, rather than take the 'forecasts and final' price setting also available. A Guaranteed Milk Price (GMP) will be offered on 60 million kgMS in two tranches.

RBA ABOUT TO REVIEW ITS RATE
At 4:30 pm the RBA will advise whether it is changing its Cash Rate Target (their OCR). No-one expects any change because they have signaled that a longer stable period at current rates is likely their best policy. However they are facing high house prices and higher inflation so the interest will be in the tone of their review.

WHOLESALE RATES
Swap rates rose by another 1 bps across the curve, except the one year term rose 2 bps. The 90 day bank bill rates were up another 3 bps again today and now at 3.15%. The next OCR review is April 24 and it is widely expected that it will rise another 0.25%. This is driving the 90 day bank bill rate up.

OUR CURRENCY
The NZ dollar has flat lined all day ahead of the RBA decision at 4:30pm. It is now up to 86.7 USc, 93.6 AUc, and the TWI is now touching 80.9.

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7 Comments

RBA keeps ocr at 2.5%, & is happy with 2 to 3% inflation.
NZ is stressed about 1.7% inflation.

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MB - with respect, again, the RBNZ  was been given a 2% target by the Govt, not the old 1-3% which is now history. And again, when monetary policy (i.e. a higher or lower OCR) can't impact that until 12-18 months out, the current inflation rate is relevant only in so far as it is a starting point. If the RBNZ models forecast a 2% CPI 18 months out with no change in the OCR, they wouldn't have moved - nmost models show it heading to 3%. People who cite the current level as being the whole picture don't understand monetary policy basics. These aren't opinions, contact the RBNZ or any economist and they will inform you of the same, but repeating something like this only misleads those that may think what you're stating is fact.

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Please note your learning outcomes from the Bank Apologist aka Grant A. Economics Test next Thursday.

He's right: NZers welcome higher interest rates. Long live tight monetary policy! Mortgage holders deserve higher interest rates due to price hikes from monopoly suppliers.

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What's it got to do with banks MB - I ignore your stuff that's a matter of opinion, but stuff that is plain factually wrong is harder to let go, and your response says volumes about you 

 

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Fact 1:

RBA keeps ocr at 2.5%, & is happy with 2 to 3% inflation.

[Source smh.co.nz]

Fact 2:

NZ is stressed about 1.7% inflation

[Source: RBNZ ]   Ok, stressed is an emotive term.  'Concerned'  better.

 

And by implication - yes - concerned about future inflation.

 

Where is the non-factual information? 

Maybe Bank Apologist is not correct:  maybe officious school teacher?

But we enjoy baiting GA....

 

 

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Re GMP, maybe ask the $7 souls how they are feeling now....

 

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Theres only two of you that way inclined and that accordingly arent worth replying to MB, so I won't bother in future ...go for it, the more you can mislead, and the more the other guy can abuse and name call officials and others, the better right ? 

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