Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
No changes to report so far.
TODAY'S DEPOSIT RATE CHANGES
There are no changes to report today, but we are pretty sure at least one bank will be reducing rates tomorrow.
DIP AHEAD
The ANZ economics team is warning that the economy is going through a soft patch, according to their Truckometer data series. They say "The ANZ Heavy Traffic Index rose 1.6% in the month of June (seasonally adjusted), more than unwinding its May fall. The rebound is welcome after a series of declines. But it’s still down 1.0% in the June quarter, which implies a weak – even negative – Q2 GDP growth print is a real possibility.1 A loss of momentum is apparent." Got that? So the index is up, but they say that means Q2 growth could be negative because the rise is not enough to unwind the previous large falls.
CONSUMERS ARE SPENDING
But the measure of monthly retail spending seems to point to a reasonably strong consumer sector. Retail spending using electronic cards was $4.3 billion in June 2015, up $206 million (+5%) from June 2014. This is slightly slower growth than we saw in May. Petrol, consumables, and services were where the strength was. Durables and clothing are the laggards and these retailers face strong competitive pressures from online retailers.
LOW BIDS WIN
The latest Government bond tender of NZ$200 mln 2027's received bids for NZ$677 mln. But just two bids were successful out of 49. Those two bid low pushing the weighted average yield accepted to 3.38% down 49 bps.
TENANCY LAW REVAMP
The Government has announced it will change the law to require all rental properties that can be insulated will have to be insulated by July 2019. Smoke alarms will be compulsory from July 2016. But it has decided not to invoke a mandatory building WOF. It will beef up building standard enforcement instead.
YO-YO
After more big losses earlier today equity markets in both Hong Kong and China markets have now reversed course as bargain hunters have stepped in. They were down another -1 to -3% (depending on the exchange) but they are now up about +2% from the opening bell.
CHINA CPI
China's June inflation rate was +1.4%, a level that was higher than markets were expecting and higher than the May data. But producer prices just keep on falling there.
AUSSIE JOBLESS RATE UNCHANGED
The Australian unemployment rate for June was reported today at 6.0%. Their participation rate is at 64.8%. Neither data item was a change from May.
WHOLESALE RATES STABILISE
NZ swap rates rose by +1 or +2 bps today, after yesterday's large falls. However, the 90 day bank bill rate was down today by -3 bps to 3.16% which is the biggest move in a long time.
NZ DOLLAR RISES
The NZ dollar has risen today, gaining about +1c across the board. Markets may be in turmoil around the world but investors are not shunning this commodity currency. It is at 67.3 USc, at 90.3 AUc, and 60.8 euro cents. The TWI is still at 71.7. Check our real-time charts here.
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3 Comments
US crude oil inventories also rose last week and are above 465m barrels, a level never recorded before 2015.
http://www.ft.com/cms/s/2/cd5c91ee-248b-11e5-bd83-71cb60e8f08c.html#axz…
The UK budget has some interesting elements from a Conservative party,with some potential for these changes to become global norms, with implications here. Namely:
A significant reduction in tax deductibility of mortgage interest for investment properties.
Additional vehicle tax for expensive cars.
Minimum wages go from £6.50 to £7.20 (NZD $16.70) an hour in 2016, and to £9.00 in 2020. Their equivalent of Working for Families tax credits winds back somewhat. In other words their WFF equivalent will no longer be an employer subsidy.
Tax cuts through increasing tax band thresholds for low and middle income workers.
Am not sure I agree with all these, although they are all worth a go. The WFF change back to employers is fair enough, but may cause some businesses that deliver an overall society benefit, to be uneconomic. Anyway, all to be watched.
Their Conservatives also seem to have turned into the Labour party. Will the Nats do some similar things? Time will tell.
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