Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
There were no changes today.
TODAY'S DEPOSIT RATE CHANGES
There were no changes today.
GDP GROWTH HIGHEST SINCE 2007
Annual economic growth came in at +3.5% for year to June; quarterly GDP rose +0.7%. Both figures are slightly below RBNZ expectations. Local bank economists thought the result was ho-hum. Aussie observers lauded it as "broad based strength". Take your pick.
WHAT THE FED STATEMENT MEANS FOR NZ
The US Federal Reserve's latest guidance out this morning has moved markets in a way that affects us here in New Zealand. They were clear about ending their QE, and the papers they released showed that they plan to raise interest rates by more than +1% by the end of 2015. Who knows if that will actually happen, but they do have building credibility over the wind back of the QE program. The moves also strengthened the US dollar which has weakened the NZD.
13% MORE
The latest MBIE petrol price monitoring (as at last Friday) shows that the cost of crude oil has fallen to to more than a 3½ year low. In NZ dollars, crude oil is now $116.33/barrel, and the last time it was this low was at the end of June 2012 (for one short week) and also 18 December 2010. Back on that 2010 date, U91 petrol cost $1.946/liter on average according to those MBIE series. Today we are paying $2.199/liter. Low oil prices are not flowing through to consumers. We currently pay 93.6c/liter in tax, whereas on the earlier 2010 date we only paid 86.9c. That accounts for 6.7c of the difference - but the industry has gained the difference; 18.6c/liter.
RATING DOWNGRADE
S&P has down graded Medical Securities to BBB+ from AA- today. This is because its "strategic importance has reduced because its diminishing business-growth potential is likely to be structural and long-standing, amid strong pricing competition from New Zealand's major banks". Despite the downgrade, it has maintained an investment grade rating.
AUSSIES WORKING LESS
Data released today in Australia shows that full-time workers are working 33.3 hours per week (August 2014) and that has been declining for a long time. In fact, that is the lowest since the monthly series began in 1991.
'SAVING' AN SOE
The Government is picking up an expensive land remediation tab to prevent Solid Energy from wiping out all its shareholder equity. Gareth Vaughan has the story here.
WHOLESALE RATES
Swap rates have zoomed higher today making back all the decline from yesterday and more. Blame the Fed. There was a strong steepening bias. One year swaps rose +1 bp and the rise was pretty even through to ten year interest rate swaps which were up +7 bps. The 90 day bank bill rate was also up +2 bps today to 3.73%.
OUR CURRENCY
Check our real-time charts here. The NZD fell today to under 81 USc for the first time in over a year. But it has popped back up in later trade today and is now at under 81.1 USc, down against the Aussie to 90.5 AUc. The TWI is down to 78.2.
You can now see an animation of this chart. Click on it, or click here.
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