sign up log in
Want to go ad-free? Find out how, here.

A review of things you need to know before you go home Wednesday; rates trimmed, tourist growth slows, Truckometers still strong, Chinese inflation jumps, swaps and NZD stable

A review of things you need to know before you go home Wednesday; rates trimmed, tourist growth slows, Truckometers still strong, Chinese inflation jumps, swaps and NZD stable

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

MORTGAGE RATE CHANGES
Nothing from Kiwibank yet ...

DEPOSIT RATE CHANGES
RaboDirect has trimmed most of its at call rates. It lowered its 6 month rate as well, to 3.35%.

FEWER LOCAL TRAVELLERS TAKE GLOSS OFF
The long growth run for the tourist accommodation industry has ended in February, with essentially flat utilisation. In fact, it is only the third month in the last four years this industry has not grown year-on-year. Guest nights in the North Island rose +1.0% in February 2017 compared with February 2016. However, guest nights in the South Island fell -2.2%. Average occupancy rates, especially for hotels and motels, still managed to hit all-time records, however.

EASING OFF THE ACCELERATOR NEEDED
Both ANZ Truckometer indexes lifted in March. The Heavy Traffic Index rose +1.7% m/m and is now +5.1% higher than the same month a year ago. The Light Traffic Index lifted +1.0% m/m and is +3.4% higher over the past year.  The Heavy Traffic Index continues to trend strongly upwards after a lull in mid-2016. The upward trend in the Light Traffic Index has shown a few wobbles of late, suggesting we may see economic growth moderate later in the year. Reasons ANZ have identified include that the economy is facing capacity constraints, and getting skilled employees is difficult. Increasingly expensive and harder-to-get credit across the economy will also dampen activity. It’s not a bad thing, they say. "Easing off the accelerator will prevent overheating and allow the economy to go the distance."

A NEW FORCE OF NATURE
Chinese inflation may be about to spill out to infect the rest of the world. Producer prices in March are up a whopping +10.0% from the same month a year ago. Apart from a brief spike in 2009, that is the highest rate in over twenty years. Back then, Chinese inflation did not matter; it matters now. It seems implausible that Chinese producers can absorb cost increases of this level, especially as they have come fast. This time past year, Chinese producer prices were falling -5.2% pa, so the shift has been huge. (Consumer CPI is up +0.9% year-on-year, but that is only because food prices are down by -2.4%. It's not their CPI that matters to us, it is that pesky PPI.)

BEST MATES
We like visiting Australia; in fact Kiwis are their largest source of tourists, accounting for 16.2% of their 8.35 mln visits in the year to February. That was followed by the 14.6% from China and the 8.2% from the USA. (And yes, if you were doing the math, New Zealanders visited Australia a staggering 1.35 mln times in the year according to the counts of their visitor cards. That of course is a record.) The feeling is mutual. New Zealand is where more Aussies visit than anywhere else. They came here 1.33 mln times, went to Indonesia (Bali) 1.24 mln times, and to the USA 1.06 mln times. Nothing else came close (not even the UK.)

UNDER WATER, BUT NOT BY MUCH
And staying in Australia, the Westpac-Melbourne Institute Index of Consumer Sentiment fell by less than a point to 99 points in April, remaining below the 100 point level that indicates optimists outnumber pessimists. This came after a set of negative news on housing affordability, unemployment and global politics. Westpac's economists said theyr were impressed it didn't fall even further. We will see what happens after their Budget on Tuesday, May 9. They have some tough choices they should make - but probably won't.

WHOLESALE RATES FLATTEN
Swap rates are basically unchanged, except the ten year is down another -2 bps. The 90 day bank bill is also unchanged today, still at 1.96%

NZ DOLLAR HOLDS
The NZD is almost at the exact same level it was at this time yesterday, at 69.5 USc. Against the AUD, the NZD has held on at 92.7 AUc. Against the EUR we are still trading at around the 65.5 euro cents level. The TWI-5 is at 74.7.

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

Daily exchange rates

Select chart tabs

Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
End of day UTC
Source: CoinDesk

We welcome your comments below. If you are not already registered, please register to 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.

4 Comments

China is still a worry and its hiding its problems from the glare of the international community , the bloated businesses , over-indebtedness , banks hiding impaired loans in SPV's , over-capacity in industry , corruption and slowing growth are all proving difficult to fix .

This could end badly .

Bloomberg have highlighted this again yesterday in a short video clip , so we cant say we have not been warned

Up
0
Up
0
Up
0

Secular Low In Bond Yields Remains In The Future”
http://www.talkmarkets.com/content/us-markets/secular-low-in-bond-yield…

Up
0