Here are the key things you need to know before you leave work today.
TODAY'S RATE CHANGE
TSB Bank raised all fixed mortgage rates up to three years but retains its market leading two year 'special' at 5.80%. They did not change any term deposit rates. However, Westpac has raised a small set of Online Saver rates by +15 bps.
MORTGAGE APPROVALS SOFT
Borrowers may be fixing fast but they aren't switching banks or taking out new loans as quickly. Last week's new home loan approvals at NZ banks were low; the lowest or second lowest non-holiday week since early February depending on whether you are looking at volumes or values.
AUSTRALIA PAST ITS PEAK
Australian trade data was markedly worse than expected for May. Export revenues plunged, with hefty downward revisions to prior data. There were weaker prices for iron ore. Their first quarter 2014 is now seen as the likely high-water mark for their current account and real net exports. Moody's said today it expects a strong private sector capex fall over the next 2 years. That will help miners but hurt all the support industries.
DAIRY TUMBLES
Hard on the heels of today's GlobalDairyTrade auction results which saw a -6.3% fall in NZ dollars, ANZ has downgraded the next season payout forecast to $6.25/kg MS. The season just ended has a payout of $8.50 and Fonterra's first estimate for the next season was $7.00. If ANZ are right, that will mean $3 billion less in the coming year than last year. That's a big impact. They are also forecasting farm profitability of $1,180/ha, well below the average for the past seven years.
NEW VEHICLE SALES STRONG
June sales of 12,519 new vehicles is up 17% on June 2013. Registrations of 4,002 new commercial vehicles for June was a record. There were 8,517 passenger vehicles sold during June, up 13% on June 2013. Commercial vehicle registrations were up 26%. More than 32% of all vehicle sales were SUVs, up from 30% in May, also new records.
COMMODITY PRICES FALL
The ANZ Commodity Price Index recorded a fourth successive monthly decline in June, easing 0.9% from May and are now 6.7% below the peak measured in February. The largest fall was in the price of apples, which fell 6% from May – a typical pattern for this time of the year as the Northern Hemisphere export season evolves. Log prices provided the next largest price drop, dropping 5% for the month. Aluminum prices recorded the largest increase in June, rising 5% from May. Kiwifruit and wool recorded the next largest increases rising 3% for the month.
WHOLESALE RATES
Wholesale swap rates fell a little today. The falls were between 2 and 4 bps. The 90 day bank bill rate is unchanged at 3.65%.
OUR CURRENCY
The NZ dollar moved sideways today and is still at 87.6 USc, the Aussie firmed for most of the day but has fallen back following their poor trade data. We are now is at 92.6 AUc. The TWI is now at 81.2.
You can now see an animation of this chart. Click on it, or click here.
5 Comments
So David , all up another great day in paradise ..... apart from the awful cold wind in Auckland .
The cows keep on giving milk , even if the price is falling , chippies keep on buying SUV's , the Kiwi$ continues to be an unpredictable beast , Government keeps on borrowing cheap money , Aussies keep on spending even when things dont look so good , and we Kiwis all keep on borrowing for who knows what ...........
ANZ has downgraded the next season payout forecast
any thoughts at to what fx rate and then US$ value of wmp these folk apply?
for example
as at 9 June these folk are/were alos forecasting US/NZ fx rate would be:
at end of June 14: 0.83, then Sep 14: 0.83 and Dec 14: 0.81 to Mar 15 at 0.79
and
http://www.anz.co.nz/commercial-institutional/economic-markets-research/agri-focus/
seems todays fx rate is 0.876
payout number wise, a comparison to the bank loan plug number used for productive/mortgage valuation could be of interest (and guessimate for div.).
.... I am beginning to wonder if the bods in the NZ Labour party aren't asking themselves now if they were a little too quick off the mark to knife David Shearer ...
Meebee he had a greater resonance with the average Kiwi Trev and Trevina than his successor , Cunliffe ...
... silly Gummy , of course he did , in spadefuls ... DC is John Key's greatest asset , going into the general election ..
It looks like the NZDMO got a far cheaper cost using syndication rather than a tender, primarily because it avoided having to wear an illiquidity premium that a tender attracts.
Does it ?
NZDMO paid 33.3259 bps under the interpolated semi annual equivalent swap rate.
The two most recent NZDMO 3.0% 15/04/20 tenders recorded ~38.0 bps under swap acceptances.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.