Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
There are no changes to report today.
TODAY'S DEPOSIT RATE CHANGES
Chinese bank ICBC has today cut some short-term term deposit rates by minor amounts. TSB Bank has also cut term deposit and savings account rates.
SELLERS EMERGE
New listings and asking prices on Realestate.co.nz were both up strongly in August suggesting an early start to the usual spring surge
HOUSE PRICE GAINS SPREAD
House price rises are increasing at a faster rate says QV. Nationally they were up +11.3% year-on-year in August, the fastest pace of growth since 2007. They say it is being driven by high migration and lack of supply, especially in Auckland. But increases in the Waikato and Bay of Plenty are also now ramping up.
'PRE-EXISTING VIEWS'
A NZHerald-DigiPoll has reported that "just over 30% oppose the [TPP] trade deal and 20% support it but 45% say they don't know enough to form any view".
RBA YAWN
The RBA will review is key policy rate at 4:30 pm today. All 27 economists surveyed by Bloomberg think there will be no change.
TROUBLE AT MILL?
Meanwhile, the Australian current account balance for Q2 has come in much weaker than expected. It was AU$ -19 bln in Q2 vs AU$ -16 bln expected and only AU$ -11 bln in Q1 (although Q1 was revised down today). That is a pretty fast deterioration.
SHOT IN THE ARM?
Going the other way, the Australian manufacturing sector expanded for a second straight month in August, with their PMI improving by 1.3 points to 51.7. The Aussie PMI has been consistently weaker than the NZ measure for years now. The last NZ manufacturing PMI was 53.5. A lower exchange rate clearly is helping the Aussies; no doubt it will do it here as well.
CHINA SAGS FURTHER
The PMI results in Chine are getting softer with each report. Chinese manufacturers saw the quickest deterioration in operating conditions for over six years in August, according to latest business survey data. Softer activity and new order growth led to a slower increase in service sector results in August.
PATIENT RETURN
Five years after being appointed, the Statutory Managers of the Hubbard Management Fund have resolved all matters and have returned all investor capital along with a small surplus pool, as directed by the High Court.
WHOLESALE RATES LOWER
Swap rates fell -2 bps across the board. The 90 day bank bill rate is down -3 bps to 2.89%.
NZ DOLLAR SLIPS
The NZ dollar rose today after having tumbled in thin trading overnight. It is now at 63.7 USc, 89.5 AUc, and the TWI-5 is now down to 68.2. Check our real-time charts here.
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11 Comments
Possible explanation for crude oil price rally.
Russia has begun its military intervention in Syria, deploying an aerial contingent to a permanent Syrian base, in order to launch attacks against ISIS and Islamist rebels; US stays silent. Read more
Considering the markets cant accurately predict 1~2 months out predicting 99 months out isnt a great bet.
I also suspect that the cost of producing most new wells is higher than $64 today let alone 8 years out, but lets not let engineering and geology in the way of the finance types eh.
Will you be buying some futures Steven or will you just wring your hands and lecture?
"EOG Resources Inc., the largest shale driller, says it can make a 30 percent after-tax return on $50 oil in its best plays. Whiting Petroleum Corp., the largest Bakken producer, said it’s preparing to be able to grow production at $40 to $50 prices.
“A single break-even price doesn’t actually exist,” Foiles said in a presentation. “Rather, what the model indicates is that at a realized oil price of $29.42, half of wells will generate returns exceeding 10%. This price is considerably lower than the $70 breakeven estimated by industry watchers at the start of the oil price slump.”
http://www.bloomberg.com/news/articles/2015-08-12/oil-at-30-is-no-probl…
ah I knew that was coming, Im not silly enough to play in shark infested waters.
Interesting how the shale players comment on their best plays, which dont have many years to run. BTW as they move out to the poorer parts which consist of much of the field(s)? also after tax returns? includes tax breaks etc then? EIA projections somewhat downgraded closer to what the watchers predict, oopsie.
Kick back, relax, crack a beer watch with interest....
"U.S. crude prices shot up nearly $4 a barrel after OPEC said in a monthly publication that it’s ready to speak to other oil producers to achieve a balanced market and better prices.
The 12-member Organization of Petroleum Exporting Countries, led by Saudi Arabia, “will continue to do all in its power to create the right enabling environment for the oil market to achieve equilibrium with fair and reasonable prices,” it said in its monthly OPEC Bulletin."
http://fuelfix.com/blog/2015/08/31/oil-surges-as-opec-signals-its-open-…
More straws in the wind - Korean exports collapse:
http://www.cnbc.com/2015/09/01/koreas-export-shocker-why-you-should-car…
'South Korean exports tanked by the most in six years in August – and here's why you should take note.The 14.7 percent on-year fall in exports last month was the steepest decline since August 2009 and well below economists' forecasts in a Reuters poll for a 10 percent fall.
Economists say the slump it's largely attributable to the slowdown in China, which is sapping demand for Korean goods. China is Korea's largest export market, taking around one-quarter of its shipments abroad, according to Reuters. ''
With one eye on next events, here is China Modern Dairy (last week) - reporting to 30 June 2015
see page 12
In the first half of 2015, the sales of dairy products in domestic market slumped, coupled with significant impact to the imports of dairy products, the dairy industry is facing challenges. But the Group still recorded growth in liquid milk products.......
http://www.noodls.com/view/E8391210ACDF953A306133C8F3D14E9A301422F1
sounds like they are also 2am milking for fresh delivery that morning...
https://au.finance.yahoo.com/q?p=finance.yahoo.com&s=1117.HK
The world not running out of resources.
"For a shaky-looking world economy, the commodity crash is a worrying sign. The hangover from misinvestment by natural resources companies in terms of cuts to jobs, capital spending and possibly dividends will be an unwelcome drag on growth. It does, however, have a positive side. Ehrlich’s expectation of rising prices was rooted in expectations of scarcity and his belief that global population growth would have devastating consequences.
Simon’s more sanguine view was that natural resources were for practical purposes inexhaustible. Given market signals when shortages emerged, he said, people would always be able to increase supply and curb demand.
It has been a long-running debate between economists and environmental alarmists. So far the economists have been proved right every time. That does not mean commodity markets will never tighten again. The mistake the super-cyclists made was to believe that a shortlived set of market conditions would last indefinitely. Nothing is permanent in commodity markets. That is as true on the way down as on the way up. But falling commodity prices are a cheering reminder that, in a phrase Simon used as the title of his 1981 book, human inspiration is “the ultimate resource”."
http://www.ft.com/intl/cms/s/0/e7a9b59e-4caf-11e5-9b5d-89a026fda5c9.htm…
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