Here are the key things you need to know before you leave work today.
Apologies for our outages today. We have been fighting gremlins. We can't be certain we are over it, but fingers crossed ...
MORTGAGE RATE CHANGES
No changes reported today.
DEPOSIT RATE CHANGES
None here either.
QV SAYS MARKETS TURNED
Our housing market hits a turning point in October as average values declined in Auckland & Christchurch. The latest QV figures show average housing values in Auckland and Christchurch are below where they were 12 months ago and growth is slowing in other regions.
FONTERRA HOLDS PAYOUT
Fonterra’s has stuck to its forecast 2017/18 payout of $6.75 kg/MS plus earnings per share in a range of 45-to-55 cents, making the forecast total available payout of $7.20 to $7.30, before retentions. The final cash payout was $6.52 for the 2016/17 season for a 100% share-backed farmer.
JAIL CONFIRMED
The Court of Appeal has confirmed the 2 year jail sentence for Vikram Mehta of mobile trader Flexi Buy. Flexi Buy operated as a “truck shop”, selling electronic and household items door to door. Customers were promised that they would receive goods after a number of payments had been made, when Mehta knew that they would not. Only nine of more than 300 customers received any goods.
SOMETHING FOR NOTHING
The new Cabinet has given the go-ahead for the introduction of one year of fees-free tertiary education and a $50 a week boost to student allowances and loan entitlements. Officials have already started work on both changes, which will come into force from January 1 , 2018.
GRANULAR CONNECTIONS
Fifteen Chinese mayors and vice-mayors from mid and large-sized cities will visit New Zealand in December for the China Mayoral Forum to further strengthen relationships between regions of both countries. That includes those from Beijing, Guangzhou, and Shenzhen, but not Shanghai. They will be joined by 33 mayors from across New Zealand. China outreach is expanding as the country actively builds its influence abound the Pacific. New Zealand.
ISSUE PRICED
The China Construction Bank NZ 5 yr Notes issue for $150 mln has been priced at 3.932%. In case you were wondering ... ANZ, CBA and Westpac all clipped the ticket on this one.
HOVERING HIGH
ANZ job ads rose +0.9% in October in the ANZ survey. The number of job ads continues to level off around record highs. Growth in regional job ads is resilient but is easing; all but four regions slowed in annual growth terms. Wellington was one of the outperformers. Auckland job ads growth slowed to +4.2% year-on-year. Canterbury job ads fell -2.9% month-on-month but are up +6.6% year-on-year although this is down from the +9% year-on-year peak in June.
ALL CHANGE
BNZ CEO Anthony Healy is to return to the bank's parent National Australia Bank in Melbourne and he will be succeeded by NAB executive Angela Mentis. Her background is in "wealth management". This is just the latest in a changing of the guard at major institutions. The Kiwibank CEO is leaving, the ASB bank CEO is leaving, and the RBNZ Governor has recently left. Makes you wonder "who's next".
FIRST IN ASIA PACIFIC, BUT NOT GOOD ENOUGH
The new Government's Minister for Women says New Zealand can and should be a world leader in ending women being paid less. “Our goal is to work to further close the gender pay gap for women and focus on pay equality. New Zealand organisations need to be more proactive about closing their gender pay gap," she said. The latest World Economic Forum’s Global Gender Gap Index shows New Zealand has held its position of 9th out of 144 countries and in the Asia Pacific region. This report also shows that 56% of all work New Zealand women do is unpaid (compared to 29% of men’s) and mean monthly earnings of women in New Zealand is 70% that of men.
THE MONEY BANKS USE
The growth in bank funding is slowing fast. Banks have taken $413.7 bln in funding as at the end of September, and that is up +5.7% from the same month a year ago. But that equivalent growth in September 2016 was +9.9%. In fact domestic market funding is now $48.4 bln and that is -1.3% lower than a year ago. Offshore market funding is $73.5 bln and that is up +5.6%. Non-market funding is $291.8 bln and that grew +7.0%. 79.8% of all funding rolls over within one year. Believe it or not, but that is the lowest (not a typo) since this data series began in March 2011.
WHOLESALE RATES TURN DOWN
Swap rates are moving back down a little higher today. This trend mirrors the US Treasury yields. The two year is down -1 bp, the five year is also down -1 bp and the ten year is down -2 bps. The 90 day bank bill rate is unchanged at 1.94%. Markets are now waiting on tomorrow's RBNZ MPS signals.
NZ DOLLAR INCHES HIGHER AGAIN, BITCOIN EXPLODES HIGHER
The NZ dollar has firmed again over the past 24 hours, and it is now at 69.3 USc. On the cross rates we are at 89.8 AUc and up to 59.5 euro cents. The TWI-5 is up at 72.5. The bitcoin price is on a wild ride, hitting a new record US$6,922 earlier, and now it is at US$6,843, a +11.7% gain on the day.
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4 Comments
China’s deleveraging campaign has foreign investors flocking to the nation’s short-term bank debt.
A sell-off in the country’s onshore bonds last month -- triggered by signs that policy makers are determined to rein in speculative borrowing -- encouraged foreign investors to home in on a particular slice of the market that might insulate them from turmoil. They’re called negotiable certificates of deposit -- securities based on a deposit by one bank into another. Mainly issued by small and medium-sized banks, they are short-dated, so bear less credit risk.
Overseas holdings of NCDs jumped nearly six-fold in the two months through September, vastly outpacing the 18 percent gain for the overall onshore bond market, according to official data. And the debt may only get more appealing through the year-end, with rates likely to rise thanks to seasonal dynamics. Read more
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