A review of things you need to know before you go home on Monday; SBS Bank ups home loan rates, BNZ raises TD special, PSI stays high, tourism topping out, EVs on target, swaps fall, NZD rises

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

MORTGAGE RATE CHANGES
SBS Bank has raised its rates for 1,2, 18 and 24 month 'specials' although it left its standard rates unchanged. The increases were +14, +4 and +10 bps respectively.

DEPOSIT RATE CHANGES
BNZ has shifted its TD special from 9 months to 8 months. That means its 8 month rate has risen from 3.00% to 3.65% while its 9 month rates has slipped back from 3.60% to 3.50%.

SLIPPAGE #1
Consumer sentiment as measured in the WestpacMM survey has fallen in March from the December level. There is no surprise here as this survey confirms what the similar ANZ one has already shown. Westpac do note that "households are in the mood to spend – but on entertainment, rather than goods".

SLIPPAGE #2
Service sector confidence is down a little, according to the BusinessNZ-BNZ monthly survey. But the absolute level is still very strong and it is this sector that allows us to post growth gains, even though manufacturing and rural are currently weak.

SLIPPAGE #3
January is the peak tourism month and we posted new all-time records, according to Stats NZ data out today. But the growth rate is falling away. Not only are their capacity constraints in key markets (Auckland is desperately short of hotel, motel and even Air-BnB accommodation), but more locals are choosing to vacation overseas.

A DOUBLING STRATEGY
From a standing start, the Government wants 64,000 electric vehicles on the roads in five years (the end of 2021). That involves a doubling each year. In 2016 we started with 1,513 (Australia had 520). But it seems we have added about 1,500 so far in 2017 raising the total to 3,005 registered. With a target of 4,000 by years end, we should make that easily at current adoption rates. However, remember, there are 3.2 mln cars here now, so we will need some serious doubling after 2021 to dent the fossil-fuel fleet. (If we are able to double adoption in another five years after that, we will reach 2 mln EVs by the end of 2026.)

AN UNRESOLVABLE TENSION
Fonterra's half year financial results are due this week. And so is the next dairy auction. Farmers won't be happy to know that the derivatives market keeps marking down the price of milk powders. But the Fonterra share price is rising and are currently near four year highs. A low milk price helps Fonterra's profitability.

WORKERS CASH IN
Insider trading is a problem for public equity, bond and financial markets; it is illegal and you can go to jail for trading with insider knowledge. But insider trading is becoming an issue in housing too, it seems. In Australia, up to 20% of one Sydney apartment development has been snapped up by staff of the developer. Scarcity breeds distortion, and generates all sorts of unwelcome incentives - even if it is not illegal in housing.

WHOLESALE RATES FALL
As expected, wholesale rates have fallen today and flattened somewhat. Th two year is down -1 bp, the five year is down -3 bps and the 10 year is down by a similar amount. The 90 day bank bill is down -1 bp to a new record low 1.95%.

NZ DOLLAR RISES
The NZD is back up to the recent-normal and now at 70.4 USc. On the cross rates we are now at 91.2 AUc and 65.4 euro cents. The TWI-5 is now at 75.4.

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

Daily exchange rates

Charts loading...
Charts loading...
Charts loading...
Charts loading...
Charts loading...
Charts loading...
Charts loading...

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

14 Comments

EVs - second hand price keeps dropping. Bought 2011 Nissan Leaf 20,000KM - $19K. Similar mileage and battery status now around $13K.
Good for flat areas and get about 80km/charge (not as much as I expected). Cost 1/3 price of petrol to run - esp with no RUC charges as of yet. Hardest thing to get used to is connecting power lead every day. Connected to night rate for 12c/kwhr.

Really unhappy to have 1 driver EV's in bus lanes. Is this announcement thje beginning of interesting tactics to get EV's special priviledges

Well they don't make much direct financial sense and that's before you add the cost of cleaning up what will become a growing mountain of toxic heavy metal batteries at the end of their lives. So how else can you force people to buy them?

All of a sudden, the Australian leadership, regulators and media are spooking the people on housing bubbles.
Here's the latest. http://www.abc.net.au/news/2017-03-20/morrison-medcraft-flag-property-in...

Love this line:

"Our credit providers are in a trusted position and we need them to act responsibly because consumers are relying on them."

Don't they realise the bank is relying on them to keep paying the loan so they can pay the CEO's $10mil a year salary and bonuses?

To put Mr Medcraft's observation in context, the latest Demographia housing affordability survey, which puts the median US home price at 3.6 times income, puts Australia's median house price at 5.5 times income, with the major cities at 6.6, Melbourne at 9.5 and Sydney at an eye-watering 12.2 times income.

...and Auckland at an eye-moistening 9. There may be tears!

That's a fair order Sydney - Melbourne - Auckland

4-8 weeks ago, all was fine and dandy. Not sure what's happened to trigger all this.

Yeah...so, what's the motivation for young Kiwis to stay in Auckland? They can have a more viable life elsewhere.

They might not have a job in their chosen field though...

Thank goodness we are a relatively well diversified economy , tourism is up while milk is down , timber is down , and gas is not great at all .

It really is time to establish ourselves as a stable , well regulated , graft and corruption-free jurisdiction for the offshore - pension funds management, re-insurance and banking industries.

There is absolutely no reason not to ...............

Boatman,

Wasn't that one of JK's big ideas some years ago and what happened.......zilch. What chance do you think NZ has of displacing existing centres like HK or Singapore or Shanghai? It's not going to happen.

Re Fonterra.........Dairy Farmers are staring down a barrel , while Fonterra spends up large........... has anyone heard their latest radio advert ? ( a rap song for goodness sake ! )

If I was a dairy farmer I would be more than just a little annoyed at their profilgate ways , when all I was receiving was 10cents a litre for milk at the gate , yet they make record profits and pay themselves eye-watering executive salaries .

Has anyone heard that utterly stupid Fonterra RAP song advertisement , which drags on for minutes on end and must have cost a small fortune to produce and a similar Kings ransom to flight ?

Its utterly disgraceful that Fonterra has to adveritse for us to drink their horrendously expensive milk in the first place .

New Zealand milk is so expensive , its practically cheaper to drink beer with all its excise duty and sin taxes .

When is Fonterrra going to realize that no one is going to drink more over-priced milk , because firstly many cannot afford it, and those who can would rather buy beer or something else , particularly those who like rap music .

We are still a nation of cowboys, not just Fonterror but our construction industry as well.
Get the gleam in their eye and nothings a problem..