Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
There are no changes to report today. But Kiwibank's home loan incentive is interesting. We will have more on this tomorrow.
TODAY'S DEPOSIT RATE CHANGES
Chinese bank ICBC has cut a wide range of its term deposit rates, some by as much as -80 bps. But that has only emphasised how attractive they were. After today's move down, they still retain a premium to offers by most major local banks.
CONTINUING HOT DEMAND
Housing loan approvals last week were at their highest level since late April. At 6,758 approvals, they were +2% above the same week a year ago, and are running +12.4% ahead on a q-on-q basis. On a value basis, it is not so impressive, but still, q-on-q mortgage vales approved at +23% ahead of last year.
SHIFTING TIDES
October investor loan demand fell by more than $500 mln from the spike we saw in September. Owner-occupier and first-home-buyer demand also fell. But to keep perspectives in line, despite the pullback, the October levels were still the second highest on record for FHBs, and the fourth highest for owner-occupiers. More will be here.
UDC TRUCKING ALONG WITH RECORD PROFIT
UDC, ANZ NZ's finance company, has posted record annual net profit after tax of $57.1 mln, an +11% year-on-year increase. The plant, equipment and vehicle lender recorded a +6.3% rise in operating income outstripping a +3.1% increase in operating expenses. Credit impairments fell -11.1%. Debenture investments increased +10.6%. On the lending side UDC said vehicle lending, plus road transport and construction were key contributors.
FEELING BETTER
Consumer confidence in China regained some ground in November following October’s plunge. Consumers were increasingly optimistic about the outlook for long-term business conditions and confidence in the labour market edged higher. The Westpac-MNI index rose to 113.1 from 109.7 in October.
SELLING THE GRID
High voltage electricity company, NSW state-owned Transgrid has been privatised by the NSW government for AU$10.3 bln, via a 99-year lease to a consortium of a Canadian pension fund, the Abu Dhabi Investment Authority and local infrastructure funds. Announcing the deal this morning, NSW Premier Baird said more than AU$3 bln worth of debt attached to the business would need to be paid off. This leaves the net return to the NSW government at about AU$7 bln (NZ$8 bln). In New Zealand the distribution grid, Transpower, is still 100% state-owned, although most generators connecting to it have some level of private ownership.
MAJOR JOB LOSSES COMING IN BANKING
Banks across the world may cut up to half their jobs and branches in the next 10 years as they fight to stay relevant and profitable in the face of sweeping technological change, the former head of British bank Barclays said earlier today. "The number of branches and people employed in the financial services sector may decline by as much as -50% over the next 10 years, and even in a less harsh scenario I predict they will decline by at least -20%," Antony Jenkins, who was ousted as chief executive in July, said in a speech. Jenkins pushed through big job cuts at Barclays.
WHOLESALE RATES HOLD
Local wholesale swap rates held the line today, although they gave up -1 bp at the long (7 and 10 yr) end. The 90 day bank bill rate put back yesterday's -2 bps fall, returning to 2.87%. There is no reaction at all to the Turkey(Nato)-vs-Russia tension.
NZ DOLLAR MOVES UP
Our currency has strengthened a little today, although not as much as the AUD has, The AUD move is in reaction to comments made overnight by RBA boss Stevens where he seemed to set the bar higher for any rate cut there. The Kiwi is now at 65.7 USc, at 90.4 AUc and 61.6 euro cents. The TWI-5 is now at 71.3. Check our real-time charts here.
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9 Comments
Global debt defaults near milestone (paywalled but do google search for that title), Financial Times:
http://www.ft.com/intl/cms/s/0/40146b80-91bf-11e5-94e6-c5413829caa5.htm…
Key points:
- 99 global companies have defaulted since the year start the second greatest tally in more than a decade
-only exceeded by the financial crisis which saw 222 defaults in 2009, according to Standard & Poor’s. -US companies account for 62 of this year’s defaults.
-Investors increasingly concerned about the state of the credit market - companies have borrowed heavily against the backdrop of low interest rates during the era of easy money.
- average yield on US corporate junk bonds, rising from 5.6 per cent at the start of 2014 to 8 per cent at present, (Barclays).
Thank goodness we have high immigration.
"Population Implosion: Ever since the global financial crisis, economists have groped for reasons to explain why growth in the U.S. and abroad has repeatedly disappointed, citing everything from fiscal austerity to the euro meltdown. They are now coming to realize that one of the stiffest headwinds is also one of the hardest to overcome: demographics.
Next year, the world’s advanced economies will reach a critical milestone. For the first time since 1950, their combined working-age population will decline, according to United Nations projections, and by 2050 it will shrink 5%. The ranks of workers will also fall in key emerging markets, such as China and Russia. At the same time the share of these countries’ population over 65 will skyrocket.
Among advanced countries, the working-age population will shrink 26% in South Korea, 28% in Japan, and 23% in both Germany and Italy, according to the U.N. For middle-income countries it will rise 23%, led by India at 33%. But Brazil’s will edge up just 3% while Russia’s and China’s will contract 21%."
http://www.wsj.com/articles/how-demographics-rule-the-global-economy-14…
Truck drivers needed in the Middle East. Must be able to run fast.
http://energyfuse.org/wp-content/uploads/2015/11/isis-pamphlet.jpg
I'm sorry I don't understand the following David, can you please elaborate:
"October investor loan demand fell by more than $500 mln from the spike we saw in September. Owner-occupier and first-home-buyer demand also fell. But to keep perspectives in line, despite the pullback, the October levels were still the second highest on record for FHBs, and the fourth highest for owner-occupiers."
Thanks
I drew that statement from the data I downloaded on this page:
http://rbnz.govt.nz/statistics/tables/c31/
September was unusually high. All data fell in October. But as explained here the investor borrowing fell the most and is the most interesting.
Also interesting is that FHB and owner-occupier data also fell. But these declines weren't actually that much if you look past the unusually high September levels. Graphing the data shows it best ...
So, that shows that October borrowing from FHBs and owner-occupiers are both at high levels, continuing a rising trend..
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