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A review of things you need to know before you go home on Monday; SBS Bank ends 'special', 1 mln beneficiaries, China trade in focus, big QLD storm, RBA closer to cashless, swaps down, NZD up

A review of things you need to know before you go home on Monday; SBS Bank ends 'special', 1 mln beneficiaries, China trade in focus, big QLD storm, RBA closer to cashless, swaps down, NZD up

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

MORTGAGE RATE CHANGES
No changes today.

DEPOSIT RATE CHANGES
SBS Bank changed three term deposit 'special' rates today. It raised its 18 month rate by +5 bps to 2.75%, its 24 month rate by +10 bps to 3.90, but it ended its 6 month 3.80% special, reverting to 3.45%, a -35 bps drop.

CRACKING A MILLION
Data from the 'Fact Sheets' published by MSD, plus the numbers on NZ Super, shows that for the first time ever we now have more than 1 mln people "on a benefit". 718,000 of them are on NZ Super (not means tested), and 297,000 are on a means-tested benefit. One year ago the numbers were 691,000 / 301,000 and five years ago it was 585,000 / 351,000. Basically claims on NZ Super are growing faster than the efforts to get people into work. At the same time the labour force has been growing, so the number of workers-per-beneficiary is actually up from 2.39 five years ago to 2.49 now. We also track this with WfF claims added in (but remember those claimants are also working) and that has been rising too.

BIG BROTHER IN TOWN
The Chinese Premier is in the country this week, so we will get a flurry of 'agreements' from that. Today's include the cracking open of the chilled meat trade, raising the number of passenger flight inbound to 59 per week from 49 (Chinese passport holders will now be able to use the SmartGate facility), and an upgrade to our existing FTA is to be started. Since the current NZ-China FTA came into force in 2008 two-way goods and services trade between New Zealand and China has nearly tripled from NZ$8 bln to NZ$23 bln.

FACING A BIG THREAT
In Northern Queensland, residents are being told to move ahead of a major storm threat.

CASHLESS CLOSER?
The RBA is pushing ahead with a New Payments Platform that may lead to the long-foreshadowed cashless society by as early as 2020. Block-chain type transactions may be part of the roll-out.

WHOLESALE RATES SLIP
Swap rates have fallen -2 and -3 bps today across the curve. The 90 day bank bill is unchanged at 1.98%.

NZ DOLLAR STABLE
The NZD has been rising today and is now at 70.5 USc. But to be fair, the shift 'up' is minor. On the cross rates we are now at 92.5 AUc and 65 euro cents. The TWI-5 is now at 75.2.

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End of day UTC
Source: CoinDesk

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7 Comments

'Risk-off’ in a sloppy Asian opening to start the week (ES1 -18 handles, $/Y -100pips to 110.34, UST 10Y ylds at 2.36), as markets digest the scope and viability of the US ‘fiscal policy’ narrative going-forward off the tremors of Friday’s failed healthcare repeal vote. Read more

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Writing flood insurance during a drought is an alluringly profitable endeavor. The “Fed put” has encouraged Trillions to flow into the risk markets. Trillions of “money” have gravitated to “passive” trend-following securities market products and structures. Yet the most dangerous Fed-induced market distortions may lurk within market hedging strategies. The above Financial Times article ran under the headline “Rise in New Form of ‘Portfolio Insurance’ Sparks Fears.” Fear is appropriate. To what degree has it become commonplace to seek profits “writing” various types of market “insurance” in a yield-hungry world confident in the central bank “put.” How much “dynamic hedging” and derivative-related selling waits to overwhelm the markets in the event of a precipitous market sell-off (concurrent with fear the Fed has stepped back from its market backstopping operations)? Read more

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David, I see the Chinese have backed out of the Blue sky meats deal.
http://www.beefcentral.com/processing/chinese-investor-backs-out-of-nz-…

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Wow , a million people receiving a benefit ............. how many people are actually in paid work ?

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at a guess, not enough.

It's a western world thingy

https://www.bloomberg.com/view/articles/2017-03-24/pension-crisis-too-b…

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And we need to talk about the elderly demand on healthcare too;

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11826493

Gareth Morgan wrote a very good book on it years ago called "Health Cheque". If only someone had been prepared to face up to it then.

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"Block-chain type transactions may be part of the roll-out." I doubt that will happen by 2020.

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