Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
Heretaunga Building Society cut its 1 year fixed rate by -30 bps to 5.40%.
TODAY'S DEPOSIT RATE CHANGES
Baptist Savings cut small amounts off most of its TD offers.
PHEW!
Growth in Australia came in slightly lower in 2015 Q1 than 2014 Q4, but the result was better than markets were expecting. The Australian dollar rose.
MORE LOCAL GOVT BORROWING
The Local Government Funding Authority issued $180 mln in bonds today in a tender that was well supported. They paid and average of 4.35% for the 2027's and that was 3x oversubscribed. The shorter terms cost less and were less well supported.
BECOMING NEGATIVE
Banks are reassessing their view that dairy prices will soon turn higher. Today's GlobalDairyTrade auction showed no such signs. You have to go back to 2009 to find lower USD prices. This is what Westpac said: "World dairy prices remained under pressure in the latest GlobalDairyTrade auction. The overall index fell by -4.3%, and is now down almost -30% from its short-lived bounce in February. The result was disappointing given that other indicators of dairy prices, such as futures markets, had been hinting at some stabilisation in prices in recent weeks."
THE COST OF RISK AVERSION
Fonterra has opened bidding for its Guaranteed Milk Price today. Two thirds of Fonterra's 2015/16 GMP allocation now available, equal to or a discount from the $5.25/kgMS new season's Farmgate Milk Price.
A TURN IN THE TREND
The first month-on-month drop in car sales for three-and-a-half years may be another sign economy has peaked. Data out today showed a definite slowdown in new car sales, and sales of commercial vehicles were lower in May that the same month a year ago.
NOT POSITIVE
Also on the back foot are commodity prices. Today's ANZ index declined by -4.7% in May. This is the second successive marked fall in the index, although the decline was more moderate than that seen in April (-7.4% m/m). The index is -18% lower than 12 months earlier and -22% below its February 2014 peak. Dairy product prices led the declines again, down -8.2% m/m, and were in May 36% lower than a year earlier. For most of the other major sectors prices were steady, or down slightly.
HIGH AND TIGHT
realestate.co.nz today reported that 'Asian' buyers were less prominent in our housing markets, but asking prices still rose, and 'weeks of inventory' fell to just 20 weeks average for the country. You have to go back to April 2007 to find as low a level. In Auckland it is less than 10 weeks; on the Coromandel it is 70 weeks. But just about everywhere inventory levels are falling.
NEW ERA IN CONSUMER LENDING
Commerce and Consumer Affairs Minister Paul Goldsmith and the Commerce Commission have both taken the opportunity to remind people the Credit Contracts and Consumer Finance Amendment Act and Responsible Lending Code come into force on Saturday (June 6). Among other things Goldsmith notes lenders will need to make information about their fees and interest rates publicly available, making it easier for consumers to compare rates and fees before borrowing money. And the Commerce Commission points out lenders must make reasonable enquiries before entering into a loan or taking a guarantee to be satisfied the credit they're providing will meet the borrower’s needs. The lender must also be satisfied that the borrower or guarantor will be able to make the payments under the loan, or comply with the guarantee, without suffering substantial hardship.
BIG DATA (BIG BROTHER?)
Do you use Xero? You now have the option to allow 'sharing' of your financial data with Statistics NZ as part of a 'big data' project to help public policy decisions. Will be interesting to watch how widely this is adopted.
WHOLESALE RATES UP
Reflecting the sharp overnight rises on Wall Street, local wholesale swap rates moved higher today at the long end by +7 bp but the short end is lower today. The curves steepened again. The 90 day bank bill rate is unchanged at 3.46%.
NZ DOLLAR SLIPS
The New Zealand dollar is now at 71.7 USc, 92 AUc, 64.3 euro cents, and the TWI-5 is at 75.8. Check our real-time charts here.
You can now see an animation of this chart. Click on it, or click here.
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