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A review of things you need to know before you go home on Monday; BNZ cuts mortgage rate, Kiwibank cuts TD rate, economists raise growth forecasts, swaps flatter, NZD stable

A review of things you need to know before you go home on Monday; BNZ cuts mortgage rate, Kiwibank cuts TD rate, economists raise growth forecasts, swaps flatter, NZD stable

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

TODAY'S MORTGAGE RATE CHANGES
BNZ today cut its 3 year fixed mortgage rate to match ASB at a market-leading level at 4.39%.

TODAY'S DEPOSIT RATE CHANGES
Kiwibank cut its one year TD rate to 3.35% from 3.45%.

JOINING THE LOCALS
The latest disclosure data for the two Chinese banks that are active in New Zealand shows impressive growth. We will have more on this soon. We have now added the retail mortgage rate offerings for China Construction Bank to our mortgage rate tables.

POSITIVE HOUSEHOLDS UNDERPIN GROWTH
The latest NZIER Consensus Forecasts shows forecasters have revised up expectations of growth on the back of a stronger outlook for household spending. However, expectations of inflation and wage growth remain modest despite expectations of stronger activity. The market expectation for 2015/16 growth is now +2.5%, for 2016/17 is now +2.7%, and for 2017/18 is now +2.9% (up from +2.0%, 2.6% and 3.0%). They also see a lower current account deficit.

PUT BACK
If you follow our Economic Calendar you will know that we were expecting the May REINZ data today, as they had informally indicated. But there is to be a delay. Now we are told to expect them on Wednesday.

SUPERMARKETS KEEP THE BENEFITS
Supermarket chain Countdown claimed today that their prices are now -0.9% lower than they were a year ago (of their 100 most popular items). Unfortunately for them, we independently monitor a 'healthy food' shopping list and that shows it is +1.4% higher over this period. Neither change is very much however and it might just be the difference between the samples being priced. But our moniorting also clearly shows they can do a lot better; prices for the same items in Australia used to be much more expensive. But they have steadily lowered them there in response to some real competition (Aldi and Costco, not to mention Coles). It is that lack of similar competition here that means shoppers here are not getting the same 'low inflation dividend'.

SWAP RATES FLATTER
Wholesale interest rates fell and flattened today -2 to -3 bps, taking the 2-10 curve to just +51 bps, its flattest since May 2015. NZ swap rates are here. The 90-day bank bill rate also slipped -1 bp to 2.40%.

NZ DOLLAR HOLDS
With Australia on holiday, volumes are light today. The NZD has held Friday's levels with just the faintest hint of softness. Is now at 70.5 USc, at 95.5 AUc, and 62.7 euro cents. The TWI-5 is now at 74. 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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2 Comments

"The market expectation for 2015/16 growth is now +2.5%"

It's June... do we not have the 2015,2016 data out yet ???

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It's not a calendar year, it is a July-June year. Later this week we will get the Jan-Mar quarter result. We will then need the Apr-Jun quarter to get the full "2015/2016" result. This will come in mid-September.

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