A review of things you need to know before you go home Thursday; deposit rate changes; producer price index; ANZ Consumer Confidence; concrete production; Australian employment; TPP11; bond issues; local rates lower; NZD stronger

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

MORTGAGE RATE CHANGES
No changes here today.

DEPOSIT RATE CHANGES
The Nelson Building Society has reduced its 9 month and 12 month term deposit rates by -10 bps. Both rates are now 3.60%.

MEAT AND DAIRY
Producer output prices rose by +1.3% in the quarter ending June 2017. Producer input prices over the same time increased by +1.4%. On a year-on-year basis output prices increased by +5.2% and input prices increased by +4.7%. While higher prices for lamb, beef and dairy products were primary contributors to higher output prices received by manufacturers, manufacturers also had to pay more for their raw products and power.

ANZ CONSUMER CONFIDENCE
The ANZ-Roy Morgan NZ Consumer Confidence Index released today show the index at 126.2, up from 125.4 last month and well above its average of 119. When adjusted for seasonality, the index rose 2 points to its highest level since July 2014. Consumers are feeling wealthier and a net 38% believe that it is a good time to buy major household items. Perceptions on the economic outlook remain buoyant.

CONCRETE
Ready-mix concrete production in the June 2017 quarter was down -2% when compared to the June 2016 quarter. However, the production was still over the 1 million cubic metres - enough to build more than 69 Sky Towers. In terms of specific regions, the Auckland region accounted for more than a third of this production and production in the Canterbury region was down 17% from the June 2016 quarter.

AUSTRALIAN EMPLOYMENT AND WAGES
Monthly trend full time employment in July 2017 grew for the 10th straight month in Australia. Full time employment grew by +29,000 people, part time fell by -3,000 and total employment increased by +26,000. Over the past year, trend employment has grown by +259,000 people or +2.2%.The trend unemployment rate in Australia remained at 5.6% and labour force participation rate also remained at 65.0%. Average weekly total wages for full time adults grew by 2.1% for the year ended in May 2017.

TRANS PACIFIC PARTNERSHIP 11
The Government has approved a negotiating mandate for the Trans-Pacific Partnership 11, which will help maintain New Zealand's competitiveness in overseas markets. Trade Minister Todd McClay will be pushing for the minimal number of changes possible to the original TPP agreement. Some benefits under TPP11 include tariffs on beef exports to Japan falling from 50% to 9% and tariffs being removed from wood products.

BOND ISSUE #612
The New Zealand Debt Management Office conducted a tender for the $200 mln worth if nominal bonds maturing on 15-April-2025 with a coupon rate of 2.75%. The issue attracted $410 mln worth of bids and was filled by tenders with a weighted average accepted yield of 2.7020%. The highest accepted yield was 2.71%.

ANZ NZ EYES BOND OFFER
ANZ NZ says it's considering an offer of five-year unsecured, unsubordinated fixed rate bonds through which the bank will seek to borrow at least NZ$100 million. Full details of the offer will be released on August 22.

NOT ENROLLED TO VOTE
About 450,000 New Zealanders are eligible but not enrolled to vote and more than half of them are under 30. The electoral office is encouraging young New Zealanders to vote and has hired youth advocates to help them get the message across.

WHOLESALE RATES LOWER
Local swap rates were lower and flatter with the 2 yr rate down -1 bp and the 5 yr and 10 yr rates down -2 bps. The 90 day bank bill rate is also down -1 bp to 1.95%.

NZ DOLLAR STRONGER
The NZD is now trading at 73.2 USc up 0.9 USc from this time yesterday. Most of the gains were made overnight and the dollar has held firm today. On the cross rates we are at 92.2 AUc and at 62.1 euro cents. The TWI-5 is just on 75.7. The bitcoin price is up to US$4,360.

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7 Comments

Trade Minister Todd (what recording) Barclay????

:( fixed now. Sorry.

Bannon said he favors pushing back against Chinese economic expansion, arguing only one country will emerge as a leader from what he described as an "economic war."

“To me, the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we’re five years away, I think, ten years at the most, of hitting an inflection point from which we’ll never be able to recover," he said.

He advocated for the U.S. to file a complaint under Section 301 of the 1974 Trade Act -- which allows for sanctions against countries that violate trade agreements or engage in unfair trade practices -- as well as follow-up complaints against steel and aluminum dumping, Kuttner wrote.

"We’re going to run the tables on these guys. We’ve come to the conclusion that they’re in an economic war and they’re crushing us," Bannon said.

Bannon also dismissed speculation that the U.S might consider using military action against North Korea to get the regime there to abandon its intercontinental ballistic missile and nuclear weapon programs. Trump recently vowed to deliver "fire and fury" onto North Korea. Read more

It’s a lot harder for David Yim to rack up the airline miles these days. The bond underwriter at Standard Chartered Plc used to fly across the Pacific from Hong Kong to the U.S. four or five times a year to arrange dollar-debt deals, but he’s not sure he’ll make it even once in 2017.

Such is the gravitational pull China is having on the market for dollar bonds issued by Asian companies and banks. Borrowers used to tap U.S.-based investors when they sold dollar securities. Now, there’s a big enough pool of greenbacks in Asia and predominantly Chinese buyers are able to take up the vast majority of bonds sold in dollars.

Within three years, this market may reach $1 trillion, composed mostly of Chinese dollar bonds, according to projections from Australia & New Zealand Banking Group Ltd. Big Chinese demand may be changing the risk dynamics of the dollar bond market in Asia, according to market watchers.

"Having a Chinese buyer means there’s a different risk profile -- it’s not like Western money managers investing in Thailand before the Asian crisis," said Nigel Pridmore, a long-time capital-markets attorney and partner at Hong Kong-based law firm Ashurst. Read more

The world has been laboring under several great misconceptions.  The first is that the dollar is the world’s reserve currency; it is not, and has not been for a very long time.  The eurodollar long ago subsumed that role, and then expanded it into all sorts of interbank things that up until 2007 nobody heard of or cared to figure out.  It all worked because it all seemed to work.

The second fallacy is that the money multiplier of Robert Owen’s time, the one the Federal Reserve is set up to meet, still matters; it does not.  I wrote in 2013:

“There were two major evolutions in money and banking that seem to fall outside the orthodox narrative. The first was a shift of reserves and bank limitations from the liability side to the asset side. The second was the rise of interbank markets, ledger money, as a source of funding rather than required reserve balancing; replacing the old deposit/loan multiplier model.” Read more

Are house sales in Auckland actually collapsing at a faster rate and are prices set to tumble. When Barfoots released its June/July data its market share spiked , historically seasonally unusual. This can only be due to its reliance on auction numbers , and the fact that they are basically unconditional sales. With Barfoot auctions and successful auctions numbers collapsing, everything turns to negotiation and indeed conditional sales, all of which will have a minimum 2 week lag if not longer before they become included in actual monthly data. With prices falling, finance tightening and heaven forbid purchasers able to walk on one or many written conditions, how soon will it be before sales numbers collapse further, and vendors/purchasers get embroiled in legal posturing as prices go further downhill. Always worrying when the trough feeders, mortgage brokers and the rest come across on media asking for LVR restrictions to be removed. Oddly enough, Barfoots which has a sales page has suddenly denied access to historical data. August sales must be going gangbusters.. Many real estate "consultants" lurk on these pages, tell me I am wrong.

That deserves a Lol. I think another indicator might be the comment stream on some interest.co articles. Perhaps I am wrong, but the fear seems manifest when the comment stream extends well past 300.

Cow Pat yes the tell tale signs , make it easier for us to keep on getting our huge commissions .