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A review of things you need to know before you go home on Monday; KiwiSaver boosts house sales, credit card debt under control, Chinese sentiment worsens, Aussie banks try one on, swaps and NZD stable

A review of things you need to know before you go home on Monday; KiwiSaver boosts house sales, credit card debt under control, Chinese sentiment worsens, Aussie banks try one on, swaps and NZD stable

Here are the key things you need to know before you leave work today.

TODAY'S MORTGAGE RATE CHANGES
Nothing changed here today.

TODAY'S DEPOSIT RATE CHANGES
No changes to report here either.

NOW SIGNIFICANT
The latest IRD report on KiwiSaver shows members have withdrawn about $470 mln over the year to January to pump into the real estate market. The IRD figures show almost 34,000 KiwiSaver members withdrew $418 mln to fund a first home purchase, and another $53 mln because of 'financial hardship'. If the 'first home' withdrawal represented a 15% deposit, that means KiwiSaver funds have supported house buying worth $2.8 bln. At an average lower quartile price over the same period, that is 9,200 houses bought this way. There 90,600 houses sold in the year to January, so that means KiwiSaver funds supported more than 10% of them.

KEEP IT UP NZ
Domestic billings on credit cards issued in New Zealand were up +4.9% in January compared with the same month a year ago. Domestic billings on cards issued overseas (by visitors) were up an impressive +16.6%. Despite this flurry of activity, amounts outstanding on New Zealand credit cards was $6.552 bln, just +3.2% more that the same month a year ago. Banks really want you to use these card 'products'; they have approved almost NZ$22.1 bln in credit limits. So that means we are only using a tad over 30% of what they have ok'd. Worse for them, 'only' $3.9 bln is incurring interest. That is, interest is being paid on 62.6% of credit card balances and that is the lowest level since the modern RBNZ data records began in July 2000, a period of over 15 years.

SCOTT-HOWMAN STARTS AT NZBA ON MAY 9
Incoming New Zealand Bankers' Association CEO Karen Scott-Howman will start on May 9. She replaces Kirk Hope who departed for BusinessNZ this month.

CHINA DOWN, BUT NOT OUT
The Chinese business environment wasn’t afforded any festive cheer over the Lunar New Year holiday as a pull back in Production left executives at China’s largest companies less optimistic, according to the latest MNI China Business Sentiment Survey. The MNI China Business Sentiment Indicator, a gauge of current business confidence, slipped 4.6% to 49.9 in February from 52.3 in January. Confidence has declined in consecutive months during the first two months of 2016, and the indicator stands 5.8% below its level recorded a year ago. The fall leaves sentiment below the 50 breakeven line indicating that more companies felt that business conditions had deteriorated over the month compared with those who saw an improvement. Firms were more upbeat about the coming three months though, with the Future Expectations Indicator rising 1% to 53.1.

A TURN FOR THE WORSE
Chinese President Xi Jinping on Friday ordered news media run by the Communist Party of China (CPC) and the Chinese government to strictly follow the Party's leadership and focus on "positive reporting." Speaking in a symposium Friday afternoon after touring China's three leading news providers, the People's Daily, Xinhua News Agency and China Central Television, Xi, also General Secretary of the CPC Central Committee, called Party- and government-run news outlets the "publicity fronts" of the party and the government. All news media run by the Party must work to speak for the Party's will and its propositions and protect the Party's authority and unity, Xi said...Marxist journalistic education must be promoted among journalists, Xi added, to make them "disseminators of the Party's policies and propositions, recorders of the time, promoters of social advancement and watchers of equality and justice." Someone is feeling he is losing control ...

GETTING CUSTOMERS TO PAY
In Australia, Westpac is the latest bank to increase interest rates for business customers and blame the move on higher funding costs, following similar changes from National Australia Bank and ANZ Bank. Some of Westpac's home loan customers will also face a rate increase as the bank is also increasing interest rates on lines of credit held against residential property. Fortunately, because the RBNZ here discloses their 'core funding ratio', we know that banks have no similar justification in New Zealand. They don't need offshore funds that come with credit risk premiums. And very recently, Westpac got a big long covered bond issue away with tiny risk premium margins. If NZ banks try this, they will just be gaming the system.

WHOLESALE RATES INCH UP
NZ swap rates are high today by just +1 bp across all terms. That embeds the flatter rate curve we got last week. The 90-day bank bill rate is lower by -1 bp today, now at 2.59%.

NZ DOLLAR RANGES
The Kiwi dollar gain is still just ranging although with a hint of strength as the day wore on. It is still at 66.5 USc, 92.8 AUc and the TWI-5 is now at 71.1. Check our real-time charts here.

You can now see an animation of this chart. Click on it, or click here.

Daily exchange rates

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Source: RBNZ
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End of day UTC
Source: CoinDesk

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16 Comments

It's a worry that Kiwisaver can be dipped into for reasons other than retirement funding. On the other hand at least some people are buying houses. That's better than no saving and no house either.

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How exactly is it any of your, or anybody else's, business how people choose to use their own money?

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maybe because there's taxpayer money in kiwisaver?

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There's government contribution, yes.
Together with employer contribution.
Not sure of the whole lot can be accessed prematurely, though.
.
I could be wrong

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So, why is it not deposit guaranteed? Where's the full backing of government? Much like our Super Fund, they expect us to take all the risk and gamble with our futures while having no say in what or where it essentially goes. That sound fair or legit to you?

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Enrolment into kiwisaver is optional.
The enrolment comes with a contract, terms and conditions.
The scheme is very specific a retirement savings account. There is nothing preventing people from either a) not enrolling into kiwisaver, or b) enrol at the bare minimum and deposit a portion of their wage in a regular deposit account which they can access whenever they want.
.
By enrolling into the scheme, taking advantage of the government kick back, and then using the savings prematurely, you're only kicking the problem of retirement funding down the line.

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MdM. I'm keen on Kiwisaver because without it there will be tons of taxpayer money required for those who don't have Kiwisaver. I pay tax, it's my business.

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There money and spending habits are none of your business. If people do the work then what the hell is what they do with their OWN money got to do with you or anybody else? IF they really wanted to encourage saving then they would of removed Resident Withholding taxes of savings accounts. No ridiculous nanystate KS scheme was required IF they put a real basic incentive in place. NO IRD intervention or work required, no finance companies clipping the ticket with their own fees. No employers exploiting the scheme to subsidize paying living wages.
Why do governments make something complicated? to steal quite frankly.

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Yeah.....certainly has a point. Ever heard of a "brick"? Basically $10k wrapped in glad wrap. Many circulating and never opened for years...medium of trusted exchange in the criminal world. However, why don't we just legalise the drug trade? The war on drugs is a miserable failure. Legalise, tax and treat as a health issue. We wonder why prisons are over flowing!

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The likes of Serco worried about overflowing prisons you think?
I don't believe he has a point at all. Sounds like yet another banking advocate just wanting the cashless society to become real to me.

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Diamonds will fill the gap if the TPTB get their way and impose negative rates by denying the relative worth and utilitarian value of circulating notes. The Russians are gearing up to flood the market with moderate value previously unpopular examples.

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Fortunately, because the RBNZ here discloses their 'core funding ratio', we know that banks have no similar justification in New Zealand. They don't need offshore funds that come with credit risk premiums.

Our Australian banks' parents are increasingly destabilised and unfit to manage their obligations both here and domestically if market indicators are correct.

Aussie Banks' Debt Is Ugliest in More Than a Decade Versus U.S.

Those that sell first, sell best

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Well that makes me want to cash in my chips and leave the casino.

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one of the big issues in the next aussie election is NEG gearing, public opinion is behind the opposition, but the party in power is out to protect it and have admitted it would drive investors out of the market
That poll showed Labor's proposed negative gearing changes have won a significant slice of public backing at 47 per cent, compared to 31 per cent opposed to the move.
http://www.smh.com.au/federal-politics/political-news/tax-wars-turnbull…

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We really are just playing with our deck chairs

.....http://www.scientificamerican.com/article/only-60-years-of-farming-left…

Farming = mining.

A recent rain event around Taupo saw massive soil erosion on the new conversion land; recently clear felled, not yet grassed, but it was mostly out of sight and DIDN't affect Auckland real estate prices...so whew!!

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