Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
There were no changes reported today.
TODAY'S DEPOSIT RATE CHANGES
Today, ASB launched a Chinese New Year special of 4.58% for 8 months term. RaboDirect cut rates for terms of 3, 4 and 5 years by -10 bps. And ANZ cut all rates from six months to 5 years by between -10 and -15 bps.
SITUATIONS VACANT
Job advertising data for January out today suggests that while the strongest employment growth is likely now behind us, our labour market still has momentum. Total job ads rose in Wellington, but fell in Auckland and Canterbury. In trend terms Auckland remains the strongest of the main centres, but all three look positive. Labour supply has also been growing strongly thanks to high migration and an increasing labour force participation rate. ANZ said they expected the unemployment rate to ease only modestly from the current 5.7% over the coming year.
NO PRICE PRESSURES
Producer prices fell in the December 2014 quarter, due to lower dairy prices, Statistics New Zealand said today. In the year to December output prices were down -0.8%, while input prices fell -1.9%. Prices received by dairy product manufacturers decreased -20%, while prices paid by the dairy manufacturing industry decreased -34%. Of course the other big mover - down - was for oil products.
FEELING BETTER OFF
Today's release of February data in the ANZ-RoyMorgan monthly survey shows local consumer confidence "still chirpy" even though the index number fell from 128.9 to 124.0. A quick view of the chart will put the change in perspective and show that at 124 consumer attitudes are still very positive. As ANZ noted, buoyant levels of consumer sentiment augur well for the economic expansion. It can be argued that a failure to respond to the short-term stimulus of lower petrol prices augers even better going forward – if consumers were to cut loose and binge the RBNZ would be forced to spoil the party. Auckland and Wellington showed the largest dips in confidence this month.
WHOLESALE RATES FALL
Surprisingly (to me at least) NZ wholesale swap rates gave up most of yesterdays gains in market trading today. Swap rates are down between -4 and -5 bps across the curve. The 90 day bank bill rate rose +2 bps to 3.64%. Last night benchmark bond rates rose until the US Fed published its minutes. Those revealed a central bank clearly not ready to start its well-signaled rate rises because it is wary about such a move choking off their recently-won gains. Bond markets took the signal and 'rallied', meaning yields fell.
NZ DOLLAR CONSOLIDATES
Check our real-time charts here. There has been more firming in our exchange rate today following the US Fed angst. We are now at 75.7 USc, at 96.6 AUc , and the TWI is at 78.7.
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Daily exchange rates
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4 Comments
Interest rate cuts will now be too late and be ineffective for any desired stimulus effect.
http://www.abc.net.au/news/2015-02-18/jericho-what-do-you-do-when-monetary-policy-falls-flat/6137930
""a decade ago, when there was, it seems, an underlying latent demand continually among households to borrow and spend, it was perhaps easier to generate additional demand in the economy by lowering interest rates. Today, that channel may not be quite as effective as it was then"
So after decades of households being manipulated by central banks, even interest rates cuts will have little effect on household spending.
Is Germany hell bent on forcing Greece out of the Euro? Looks that way, I wonder how the german banks will do.
http://krugman.blogs.nytimes.com/2015/02/19/insert-german-curse-word-he…
Whats next, Spain?
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