Here are the key things you need to know before you leave work today.
TODAY'S RATE CHANGE
ANZ signaled it will be offering a good home loan 'special' tomorrow, 6.09% for two years. And it is sweetening the deal with up to $3,000 cash incentive. This new ANZ offer is good, but not as good as a available from a number of smaller banks.
AUSSIE HOME LOAN MARKET STUTTER
Loans to homeowners were flat in May in Australia and declined noticeably to investors. This comes after a long string of rises and gains.
THEY LOVE US, ESPECIALLY THE VOLATILITY
Markets love our currency. Trading in the NZ dollar in June was up a remarkable +30% in June from the same month a year ago. Most of the year-on-year gains were in currency swaps, with forward contract levels actually falling +21%. But between May and June (adjusting for the different number of trading days), currency swap trading fell -10% while straight spot transactions rose an impressive +16%.
There were no surprises in today's data. Food prices rose 1.4% in June (+1.2% for the past 12-months). Meat and Poultry were the big y-o-y gainers +2.8% followed by Restaurant Meals +2%. On the flip side Fruit and Veg declined 2.3% on a y-o-y basis.
... BUT GROCERY PRICES STABLE
Our own Grocery Price Monitor which reflects the cost of a standardised basket of groceries and is updated weekly shows a different picture. Our chart shows over the past 12 months there has been a small decline in the cost of everyday items ($158 in June 2013 vs $156 in June 2014).
THE NARRATIVE CHALLENGED
There was a small surprise in some data released by the RBNZ today. We were expecting a rise in the level of foreign holdings of NZ Govt securities but in that data today for June they actually declined to 62.4%. This time last year, this metric was at 66.0%. The reason it was a surprise is that there has been quite a bit of issuance. Supposedly foreigners like our safe yields. But clearly kiwi buyers have been taking an increasing share.
WHOLESALE RATES
Wholesale swap rates fell by -2 to -6 bp in a sharp flattening twist following the big New York benchmark falls overnight. However the 90 day bank bill rate was up +1 bp again and is now at 3.67%.
OUR CURRENCY
The NZ dollar moved sideways today. It is at 88.1 USc, at 93.9 AUc. The TWI is still at 81.9
You can now see an animation of this chart. Click on it, or click here.
3 Comments
THE NARRATIVE CHALLENGED
There was a small surprise in some data released by the RBNZ today. We were expecting a rise in the level of foreign holdings of NZ Govt securities but in that data today for June they actually declined to 62.4%. This time last year, this metric was at 66.0%. The reason it was a surprise is that there has been quite a bit of issuance. Supposedly foreigners like our safe yields. But clearly kiwi buyers have been taking an increasing share.
Sir William Douglas Goodfellow ( 97 ) died in Auckland today , Saturday . Anyone seeking wisdom from the olds , would do well to study the business life and philanthropy of this man , once listed as the richest New Zealander ( 1994 ) ...
... a life well lived good Sir !
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