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A review of things you need to know before you go home on Tuesday; silent slippage, a $30 bln tide, a new RBNZ chairman, NZX Futures backtracks, Chinese frenzy, swaps unchanged, NZD stable

A review of things you need to know before you go home on Tuesday; silent slippage, a $30 bln tide, a new RBNZ chairman, NZX Futures backtracks, Chinese frenzy, swaps unchanged, NZD stable

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

TODAY'S MORTGAGE RATE CHANGES
There were no mortgage rate changes today.

TODAY'S DEPOSIT RATE CHANGES
None here either. But we did publish this review of the 'silent slippage'.

A $30 BLN TIDE
The first stage of Auckland's ambitious East-West Link is underway. This is a roading project to connect SH1 with SH20, and will make travel planning more logical in the middle of Auckland's industrial heartland. This $1.85 bln project will take until 2025 to complete. It brings the total of all 'major projects' in the Queen City (ie those over $100 mln) to now more than $30 bln. A lot of construction for a very long time is now underway. See our summary here.

NEW RBNZ CHAIRMAN
Neil Quigley is to succeed Rod Carr as Reserve Bank chairman, overseeing the monitoring of Governor Graeme Wheeler and the central bank's performance on behalf of Minister of Finance Bill English.

STOCKS MIXED
Local equity markets are lower today. The NZX and ASX are both down around -0.5%. Hong Kong, Shanghai and Tokyo however are up about +0.5%. These movements followed the nearly -1% fall on Wall Street earlier today.

A CREDIBILITY PROBLEM
Following the embarrassing missed signals from the last dairy auction, the dairy derivatives market today is sharply lower, wiping out much of the rises they previously signaled. It may take some time however to recover their proper role of giving market signals that traders can rely on. This market has a credibility problem.

WHAT YOU GET
You think our housing markets are irrational? Then take a look at this video and see what happened when some flats in one Chinese city went on sale. Cities all around China are imposing restrictions trying to quell demand. Those city regulators all need to take an Econ101 class. Artificially trying to hold back demand never works when supply is constrained. Frantic buyers always find a way in drive that is never 'fair', and just become agents of price speculation. Regulators can never keep up. The only answer is 'supply' - and Christchurch is living proof in our midst.

LOOKING HEALTHIER
Profitability of Chinese firms improved in August, in data out today

WHOLESALE RATES UNCHANGED
There has been very little change to swap rates today, although the ten year did drop by -2 bps. The 90-day bank bill is up +1 bps to 2.21%. You can find our chart for all terms of swap rates here.

NZ DOLLAR STABLE
There has been little net movement in the Kiwi dollar today ahead of the US Presidential debate. It has been a day featuring few data flows. The NZD/USD is currently at 72.8 USc. On the cross rates, it is trading at 95.3 USc, it is at 64.8 euro cents. The TWI-5 is 75.8. 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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10 Comments

Well there you have it, according to David there is no reason at all to try to squash demand. Maybe it's you who needs to go back to Econ101.

It's like key wrote that himself

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If the doors come off like that I'm sure building quality on the rest the place is just top-notch.

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So its HK $19,000.00 per Square metre over there ? Thats about $5,000 New Zealand

All good then , they can come to Auckland and pay just $2,500 for a new build in Hobsonville or $1,500 for a secondhand dwelling anywhere else

Little wonder they are doing just that

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LOL JUST YOU WAIT UNTIL WE GET TO $ 5,000.00 PER M2 in Auckland (excluding the land !!!!!!)

The average leaky Glenfiled hovel will cost a cool $2,000,000 .00

Thats when you are going to hear the chattering classes go ape

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A good site for stats. The game re Auckland property is intensification. In 20 years time the average AKL property will be much smaller.

httP://www.globalpropertyguide.com/Pacific/New-Zealand/square-meter-prices

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watching the video mirrors the videos that came out before the Chinese share market crash, that ended well
hope they can keep the carnage contained to china and not spread.

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I'm not optimistic.

If that video doesn't scream 'insane speculative bubble frenzy' I don't know what does.

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bubbles everywhere caused by too much credit creation, one will crack early next year
http://www.cnbc.com/2016/09/27/vancouver-named-as-the-financial-center-…

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I wonder where all the crazed and irrational dumb bubble money is flocking, now that Vancouver and Australia are implementing precautions and losing their allure? Where could it be? Which country is just sitting there blinking dumbly like the proverbial big dopey trusting flightless parrot, no defences in place at all against introduced predators?

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Some little banana republic where the peasants blindly listen to mainstream media.......

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