A review of things you need to know before you go home Friday; buoyant farm sales, record lifestyle block sales, consumer confidence slips, Aussies hike mortgage rates, swaps steepen, NZD slips

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

MORTGAGE RATE CHANGES
No changes to report.

DEPOSIT RATE CHANGES
Aotearoa Credit Union has announced some changes that will be effective tomorrow.

MORE BUYERS NOW
The latest rural sales figures from the REINZ show farm sale numbers and prices holding up in spite of the weather. In March, the there were 180 sales, +21% more than the same month a year ago. Ninety-nine of them were dairy farm sales, double the number of March 2016. The average price/ha was +9% higher at $37,066. If there is any weakness in this March data it is for horticulture units; only 49 sold in March 2017 compared with 64 in March 2016.

LIFESTYLE RECORD
The 880 lifestyle blocks sold in March represented the highest single month of sales since we started recording this data in 2003. This level was +3% above last years record. Activity was especially strong in the lower half of the North Island, and in Otago and Southland.

CONFIDENCE FALLS
The lastest ANZ-Roy Morgan consumer confidence survey shows this falling. ANZ's analysis says "Consumer sentiment teetered lower in April. Auckland recorded the largest fall. We’re not reading too much into it; it’s monthly yo-yo equivocation as opposed to a change in trend at this stage. The level remains robust and consistent with good economic momentum. Inflation and house price expectations both lifted."

ALTERNATIVE ENERGY / ALTERNATIVE RESULTS
Investing in renewable energy companies is an uncertain gamble as the NZ Super Fund has found out. It put NZ$47 mln in to US wind turbine company Ogin Inc. All that has had to be written off as the company failed. But that has had little impact on the NZSF performance overall. It's fund size has risen to NZ$ 34.1 bln and in the last year it returned an impressive +15.1%.

INVESTORS FACE HIGHER COSTS
In Australia, their biggest bank has hiked fixed interest rates on investor and interest-only home loans. The Commonwealth Bank said the hike will ensure it will "continue to meet our regulatory requirements". Fixed rates on interest-only loans will rise by +25 bps, while investor home loans that are principal and interest will rise by +25 bps. Investor loans that are interest only will rise by between +25 and +50 bps. The changes are effective immediately.

"WE ARE DOING WELL"
The Australian Bankers Association gave itself a pat on the back today over the progress made over the past 18 months. "The industry’s six initiatives represent a golden opportunity to bring about better outcomes for customers and the industry."

TPP TO RISE AGAIN?
Trade ministers, including New Zealand's Todd McClay, are due to meet in Hanoi on the sidelines of an APEC trade ministers' summit on May 21 and 22, and trade officials are scheduled to meet on the TPP-11 project in Canada on May 2 and 3 to try and map out a process for reviving the TPP deal. The Nikkei Asian Review reported Japanese officials claiming the remaining participants, without the US, would "begin talks on implementing the deal in May" during a speech in New York.

WHOLESALE RATES STEEPEN
Local swaps rates have risen again today with a steeper bias. They unchanged for two years, up +2 bps for five years and up +4 bps for ten years. The 90 day bank bill is down another -1 bp to 1.95%

NZ DOLLAR SLIPS
The NZD fell today. We are back to 69.9 USc. Against the AUD, we have slipped to 92.9 AUc. Against the EUR we are trading at the 65.2 euro cents level. The TWI-5 is now at 74.8.

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4 Comments

China’s labor market remained tight in the first quarter as the economy roared back. Workers, however, are finding that pay hikes aren’t as generous as they used to be.

A slew of official and private indicators from recruitment fairs and websites show employment solid as factories stopped cutting payrolls amid surging industrial output. But services firms and new industries are no longer aggressively hiring, and wage gains for high-skilled professionals as well as less-trained migrant workers are moderating.

China’s job market is increasingly intertwined with consumption, which has been bolstered by rising incomes: Private and government buying accounted for 77.2 percent of the first-quarter expansion. Policy makers have prioritized creating greater employment as they move to cut excess output in mines and factories that would inevitably lead to layoffs.

Officials can be reassured, at least for now. The surveyed jobless rate fell below 5 percent in March, according to the National Bureau of Statistics. China created 3.34 million jobs in the first quarter, well on pace to exceed the government’s 11 million target for this year.

While slower wage gains help restore competitiveness, that could curb household spending and hinder the transition of the economy from old industries to services and consumption. Read more

"The 90 day bank bill is down another -1 bp to 1.95%"
All time low???

Enjoy it while it lasts.

Interest rates are not going to rise much at all, despite the ridiculous ongoing statements that rates are going to rise.