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
RaboDirect reduced its 3 month term deposit rate by -15 bps to 3.20%. They made a similar change to their 3 month term PIE.
WHERE THE RETAIL GROWTH IS
Purchases from offshore online retailers accounted for 44.5% of the month’s online spending, and spending at these retailers was up +13% on June 2016. Spending at local online retailers was up +9% on June last year. While slower than the double-digit growth rates we’ve generally been seeing since 2016, this level of growth is still more than double that of local bricks-and-mortar stores, which were only up +4% on June last year. This data is as reported in the BNZ Online Sales Report.
2.5% INFLATION?
Signs of inflation were in the ANZ Inflation Guage for July. Prices in the Gauge lifted +0.4% month-on-month and were up +2.5% from the same month a year ago. Of the 36 groups in the Gauge, 14 rose, one fell and 21 remained unchanged. Vehicle licensing fees contributed to a fall in the other private transport group. Housing was buoyed by annual local authority rate increases (up +3.6%), a lift in rents, and there was also a lift in insurance costs. Still, when ANZ looks at this data they see little more than an oscillation.
DID YOU KNOW ?
... that we have seven urban centres with populations of 100,000 or more? Auckland (1,495,000), Wellington (405,000), Christchurch (389,700), Hamilton (230,000), Tauranga (134,400), Napier/Hastings (131,000), and Dunedin (118,500). Knocking on the door is Palmerston North at 84,300, then Nelson at 65,700.
GLOBAL GROWTH RISING
The recent flow of good news on the world economy has continued with Fitch Ratings now revising up its 2017 and 2018 world GDP growth forecasts to +3.0% (from +2.9% in June) and +3.2% (from +3.1%), respectively. The revisions are led by emerging markets and China in particular, whose recovery has been more pronounced than anticipated. But data continue to suggest a synchronised global expansion across both advanced and emerging market economies. Spill-overs from the rebound in emerging market demand are reflected in the fastest growth in world trade since 2010 they said.
THE COST OF REPUTATION DAMAGE
The CBA board is meeting today and issued a Statement to the ASX which revealed it has reduced to zero the Short-Term Variable Remuneration for the CEO and Group Executives for the financial year ended 30 June 2017. It is imposing collective accountability of senior management for the overall reputation of the Group. They also accepted "shared accountability" and decided to reduce Non-Executive Director fees by -20% in the current 2018 financial year. "Mr Narev retains the full confidence of the Board" they said.
FEELING CHIPPER
Australian business confidence is rising and is now at its highest since early 2008 in July as sales and profits stayed strong, while firms turned more confident the purple patch would last for some time yet. The National Australia Bank survey rose 1 point to +15 in July, triple its long-run average of +5.
RETURNING TO NORMAL?
A couple of weeks ago we noted that hydro lake inflows were much lower than normal for this time of year. But the latest data shows it has now reverted back to normal. However, that still leaves storage levels way below where they need to be. Still, markets are less worried with wholesale prices starting to fall back from the elevated region they have been in.
WHOLESALE RATES FALL
Continuing the yo-yo pattern, swap rates are lower today with the 2 year rate falling -2 bps, the five year us down -2 bps, and the 10 year rate is down -4 bps. All that does is reverse the rises we had yesterday. The 90 day bank bill rate is unchanged at 1.95%.
NZ DOLLAR SLIPS
The NZD fell overnight but has held during today's trading and now at 73.6 USc. On the cross rates however we are still slipping and are now at 92.8 AUc and at 62.3 euro cents. The TWI-5 is at 76. The bitcoin price is sharply higher again and hit a new record earlier this morning. It fell somewhat since but has turned up again and is now near its record high at US$3,431.
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16 Comments
I didn't realise it was a population game about who has the biggest dick? Having called both Auckland and Palmy my hometowns for several years, I have come to realise that New Zealand is way too small for all the in-fighting that goes on between the big cities and the regions. I don't get it, why the regional towns always feel the need to have a go at our big city dwellers and vice versa. Each town in NZ has it's own benefits and that includes our biggest town called Auckland. Tall poppy syndrome is still alive and kicking. No wonder NEw Zealanders can't get ahead and grow up with all this BS lunacy going on between the peasants.
This is amusing:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119…
Those yields are terrible no matter what the trend. What happens when you factor in debt at 6% and rising?
Exactly what you would expect, " slowing of house sales prices " Does that mean prices are falling or rising. According to Barfoots average prices are down 60K , is it any wonder yields have risen. It probably will not be fully appreciated until Q2 2018, but Auckland median prices will fall between 45-55 percent, from peak. We have passed the peak.
Absolutely. I was going to comment on this but you beat me to it. These yields are abysmal.
I was interested to see the rental yields in some of the more central areas were as low as they were. Some yields are as low as 1.8%. That's the GROSS yield. I mean, at that yield the economic return on a property is, absent capital gain, negative. An absolute dog. The yields would indicate these types of central Auckland area properties are the most overvalued, not the least.
Old news !
http://www.interest.co.nz/saving/rental-yield-indicator
We have been reporting this for years. Our June report came out two weeks ago.
http://www.interest.co.nz/property/88947/strong-headwinds-and-dangerous-cross-currents-make-it-increasingly-difficult
and not just based on one agency.
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