Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
ASB hiked rates for its two, four and five year fixed mortgage rates. All the details here.
DEPOSIT RATE CHANGES
No changes here today.
RENTING ON THE RISE
Are most new households renters? Stats NZ thinks so. Their June 2017 update of household numbers and tenure shows there are 1,724,200 (estimated) households in New Zealand at that date, with 1,085,700 as owner-occupied. But the change over the past year shows an increase of +22,100 households, with the rise in renting households being +14,400 of them. One third of households are now renting, the highest level ever. Interestingly, our population is growing quite quickly, but household formation is lower now than in the 2003 to 2006 period when it was growing at least +10% faster.
DON"T MESS WITH THE BIG GUYS
Under-fire Aussie infant powder manufacturer Bellamy's recently spent AU$28 mln buying a Chinese-approved canning operation in Melbourne to get on top of its licensing issues in China. But today, a bombshell hit them - that canning plant lost its accreditation. Their stock market listing went under a trading halt. The very viability of their business is under question. Don't mess with Chinese regulators.
GUTSY CALLS
The world's largest lithium ion battery will be installed in South Australia under an agreement between Tesla, a local (French-owned) wind farm, and the State Government. The project will be in place before summer. According to the Government, Tesla boss Elon Musk has confirmed his commitment to deliver the battery within 100 days or it is free. The 100 days starts once the grid interconnection agreement has been signed.
WHOLESALE RATES RESUME UPWARD STEEPENING
Following the rise of benchmark rates in New York, the local swap market rose strongly and steepened markedly. The two year is up +4 bps, the five year is up +7 bps and the ten year is up +9 bps. The 90 day bank bill rate is down -1 bp to 1.97%.
NZ DOLLAR UNCHANGED
The Kiwi dollar is essentially unchanged today at 72.8 USc. On the cross rates we are a little higher against the Aussie, trading now at 96 AUc and a little lower against the euro at 63.8 euro cents. That leaves the TWI-5 at 76.9. Bitcoin has lower today, down -1%% from this time yesterday to US$2,593.
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12 Comments
I have no doubt Australian corporate culture led to the decision to try to evade Chinese regulators. Good way to make them angry and blow $28m in the process.
I hope the SA battery project works out. There are plenty of smaller commercial installations but this could be interesting. With 100MW output and 129 MW.h storage it might well be enough to smooth out their network issues.
The Reserve Bank of Australia didn’t change its cash-rate target on Tuesday, and that was expected by all. But it also left the statement largely untouched -- dashing speculation that Governor Philip Lowe was going to follow global peers in a tilt to the hawkish side.
That sent the Aussie dollar and yields tumbling. One bidder at Wednesday’s government auction got excited enough to snap up all A$800 million ($608 million) of the bonds offered -- the most on record to go to a single direct purchaser. Read more
I love how in this article the number is the drop in auctions but all the real estate agents quoted are furiously trying to talk up the market.
http://www.stuff.co.nz/business/property/94360701/quite-remarkable-fall…
I don't read it like that at all. They seem to be just reporting the facts. Auctions are really just for hot markets because it doesn't make sense to buy unconditionally when you can buy conditionally. The one and only reason to buy in a rush, unconditionally at an auction, is to get in before the queue of other eager buyers. I don't understand why so many commenters here put so much store in the quirks of the auction market. Well actually I do understand but it's not going to work.
"The facts" eh? Their comments have a real air of someone putting their hands over their ears, shutting their eyes tight and repeating "this isn't happening, this isn't happening". As you say though, it may just be a transition to a more normal paced market but it also may be a transition to a crash. After all it is Hamilton so if you use your theory that everyone wants to live in the DGZ, the hamiltonites will be selling up and taking advantage of those new low Auckland prices :)
I missed this:
Fleet Holdings NZ (Fleet NZ) launched FP Ignition Series 2017-B Trust on 26 June. The deal is a securitisation of vehicle receivables and according to KangaNews data will be the first public securitisation transaction in New Zealand this year. Read more
And this: Eclipx prints NZ$224.4 million auto-backed securitisation Read more
Are the punters about to invest in their own vehicle debt payment streams? I guess this will not end well.
The scheme is working a treat in the US. In fact where people have underwater loans they let them trade in their car and their debt. It gets rolled into a new loan and to make sure they can meet payments the loan term lengthens. So 3 years was typical, then 5 year and only a year later lots of left over car debt is rolled into a 7 year term. The debt get securistised and sold on the market. Through financial magic the current buyer hopes there will be a bigger idiot waiting in the wings before the meltdown.
The Bank of Japan asserted control over the nation’s bond yields, sending borrowing costs lower with its first fixed-rate bond-purchase operation since February after a global debt selloff.
No bids were tendered after the central bank offered to buy benchmark 10-year notes at 0.11 percent, it said Friday. Yields dropped to 0.085 percent after having more than doubled in the past week, while the yen swung to a loss.
The BOJ is acting after German bonds and Treasuries led a global debt selloff Thursday, threatening its yield-curve control strategy. The hawkish tilt adopted by the European Central Bank and the Bank of England last week has put in focus the policy divergence that Japan has with its peers, with Governor Haruhiko Kuroda maintaining that the nation requires stimulus to reach growth and inflation targets. Read more
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