Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report today.
DEPOSIT RATE CHANGES
None here either.
LOOKING UP
Analysts say following today's dairy auction that current price trends bode well for the forthcoming season which starts on October 1, 2017. ANZ economists now pick an opening forecast milk price of $6.75 per kilogram of milk solids following the fifth consecutive rise of prices at the GlobalDairyTrade auction. The price for the current season is likely to be around Fonterra's $6/kgMS.
PRODUCTION SPURT
The latest data on the New Zealand dairy milk production levels shows a late season spurt higher and Fonterra's detailed release confirms it has extended on into April. Warmer weather has improved grass growing conditions.
JOB OPENINGS FALL FOR SHINY-BUMS
In April, MBIE's official monitoring of job ads shows vacancies increased in five out of eight industry groups. The biggest contributors were construction and engineering (up +2.0%), hospitality and tourism industry groups (up +1.7%). The biggest fall was for accounting, human resources, legal and administration (down -1.2%). Over the year, growth was spread across six out of eight industry groups with only the accounting/HR/legal/admin group and the IT group showing year-on-year declines.
UP, BUT SLOWING?
Producer output prices rose +1.4% in the March 2017 quarter, while input prices rose +0.8%, Stats NZ said today. Both represent lower levels of increases than were recorded in the December 2016 quarter. But the year-on-year pace is increasing and is in fact back to gains last seen in 2014 with both up over +4% on this basis.
IT'S POURING IN AUCKLAND
Stats NZ also released the March quarter readymix concrete data today, and the data for Auckland is impressive. The March deliveries amounted to 242.9 m3 in metropolitan Auckland, up +11.5% above the 217.3 m3 in the same quarter a year ago. That is impressive because the y-on-y data is now in a long series of records that stretch back to late 2012 with only one exception. The data for Wellington and Christchurch are more subdued. Readymix concrete deliveries have been falling for two successive quarters in Wellington, and falling for six successive quarters in Christchurch.
REAL WAGES TURN NEGATIVE
In Australia, the expected low level of pay increases came through in their March 2017 data. That puts them on track to be in a situation where PCI prices are rising faster than pay, a rare situation in the 'lucky country'. The annual rate of pay rises in the March quarter was just +1.8% whereas their April CPI rise was +2.1%. The latest equivalent data for New Zealand is pay increases of 1.5% and CPI increases of +2.2%.
CONSUMERS NOT SO HAPPY
The Westpac-Melbourne Institute survey of Australian consumer sentiment fell -1.1% from April, when it slipped 0.7%. That left the index at 98, one point from the previous month. Anything below 100 signals the pessimists outweigh the optimists in their outlook on the economy. Their consumer confidence index has held below 100 since December. The latest equavlent NZ Westpac consumer sentiment report for New Zealand has the index here at 111.9.
NO CHANGE
Standard & Poor's has affirmed Australia's AAA credit rating after their recent Budget.
WHOLESALE RATES SLIP AGAIN
Swap rates can't hold on to yesterday's gains and are slipping again today. For two years they are down -1 bp, for five years they also are down -1 bp and for ten years they are down -3 bps. The 90 day bank bill rate is also down -1 bp to 1.98%.
NZ DOLLAR UNCHANGED
The NZD is unchanged at 69 USc. On the crosses we are at 93 AUc, and 62.1 euro cents. The TWI-5 is still at 73.5.
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21 Comments
Mortgage brokers under the gun in Aussie as well.
"Mortgage brokers add 16bps to every home loan...... earning $4,600 for every home loan they write...compared to fees charged by financial advisors for 'simple advice' ranged from $200 to $700."
http://www.afr.com/business/banking-and-finance/mortgage-brokers-add-16…
Top officials from two U.S. government economic-statistics agencies said their measurement tools are understating growth and overstating some components of inflation by modest amounts, while cautioning that this doesn’t explain the sluggish expansion in recent years.
“The Bureau of Labor Statistics and Bureau of Economic Analysis agree that price index mismeasurement continues to lead to understated growth in real output over time,” five current and former officials from the agencies wrote in a paper published May 3 in the American Economic Association’s Journal of Economic Perspectives and presented last week at a meeting of the BEA’s advisory committee. Read more
When will central bank "stimulus" get on with it?
It is great to see a turn around in our fortunes,most Dairy Farmers will be happy with any payout with a 6 in front of it,everyone will benefit from it- so please get behind us. We are doing our best for our families,the economy & the Environment. David the 2017-18 season starts on the1st of June. Regards Joe
Well joe I'm in two minds. Does it mean a better income so you lower your stock rates, fence off waterways and be less harsh on our environment? Or will it mean more irrigation, more intensification and more polluted waterways? You tell me because plenty of us are getting pretty p###d with what you guys are doing.
Rastus,I can tell you hand on heart,that here in Southland 99% of waterways on Dairy farms are fenced. My own situation,I fenced mine 17 years ago when I bought it,we dont need any irrigation only effluent going back onto pastures through low application pods. I spend extra on an Additive going into my Effluent Pond to remove Nitrates & smell for my LIfestyle neighbours,I also add Rumensin Additive into meal I feed the cows which reduces methane gas into atmosphere.WE all have aresponsability to protect our waterways,including urban dwellers. Regards Joe
i used to visit mossburn in my youth. Beautiful farm with deer, sheep and beef. So income from venison,velvet beef, wool and lamb. Planted shelter belts,a wide variety of trees, great duck ponds, picturesque and profitable. Marriage split, valued as dairy so owner had to sell. Drove down a few years ago and was devastated with what I saw. Former homestead now garden less alone in the middle of a paddock....the rest of the land all barren, all that beauty and productivity replaced by a row or irrigators. Not a tree in site. Freeken tragic I tell you.
I'm sure you do a great job, plenty of dairy guys do. However it is time to back off from the mindless national party march of destruction.
You are right Andrew about debt repayment & cost structure,but we have had 2 seasons of little or no maintenance spend,so with an increase in payout allows us to upgrade plant,fertilise & maintain our farms (within a budget} which benefits rural cities & town folk alike
I'm just not so sure about China, looks a bit dodgy dodgy, that and the USA is going to need to export more dairy, as is the EU. They are Chinas biggest export markets and will get favour over us.
So I think some cash in reserve would be a good idea, hell I remember back when most farmers had cash reserves, left over from the wool boom and memories of the great depression.
Dairy farmer joe,
I have no farming background and know only a few farmers,but those I have met seem to me to be good people,who have worked very hard over many years. However,I also believe that we cannot as a country,just keep on adding more dairy farms. This inevitably means using more marginal land withmoreneed for irrigation.
Technological progress almost certainly means that we will have artificial meat within the next 10/15 years and together with climate change,this will force farmers to rethink their model.
I believe that all food producers will come under increasing consumer pressure to reduce environmental impacts and for some,this will be a very difficult process to manage. I wish you luck.
It is already happening here in Southland,Environment Southland are in the process of submissions for the new water & land accord,any marginal land or soils will need a consent to convert,winter,or even graze Dairy stock.Thank you for your feedback,I was just giving my own operation an airing to show most farmers are doing there very best to have smallest impact on Environment. Regards
There are always bad apples in every bunch,most family run & owned farms are passionate about leaving the land in a better state for future generations ,than what they took over. Unfortunately with the increased payouts in the latter years,a new faction of ownership has come about.Equity partnerships have sprung up everywhere,some {not all} are run like buisnesses & the more profit for investors the better,regardless of impact on cows/environment/staff.
Hey Joe what do you know about 'Farm Right,' I see they are running 21 farms for the Super fund?
We have exactly the same problem here, most family intergenerational farms are well run and conservative. However there are more and more farms being owned by less and less people and those with high debts or run by accountants are causing the rest of us some stress.
The actions of Federated Farmers are, to my mind, largely responsible for the bad reputation the farming community is getting - here's their latest from the MacKenzie Country;
http://www.eds.org.nz/our-work/policy/media-statements/media-statements…
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