Here's my summary of the key events overnight that affect New Zealand, with news ANZ keeps some of the RBA rate cut for itself.
But first, the latest version of the ADP Employment Report, the precursor to this weekend's release of the US non-farm payrolls report, shows a much lower than expected rise in new jobs created in April. They were up +156,000, but below the +195,000 gain expected. Almost all the rise was from a stronger services sector; the factory sector shed jobs in April.
Two other service sector reports (here and here) showed similar readings.
The American trade deficit shrank to just on US$40 bln, its lowest level in a year. Exports however fell, but imports fell even more sharply, mainly because of lower levels of consumer goods imported.
The first signs of international airfreight slowdowns are being reported. IATA says freight-tonne-kilometers fell -4% in March compared with the same month a year ago. And in the US, April orders for large trucks fell sharply.
The ECB has announced that it will no longer produce any more €500 bank notes because of its role in facilitating illegal activity. Each is worth NZ$830 and NZ$1 mln worth weighs just 2 kgs, easily held in a small bag. It is known in some quarters as the 'Bin Laden bank note'. Virtually no other central bank produce a note of such high unit value. It will still be legal tender however until they are withdrawn from circulation over time. However, some see a 'conspiracy' involved to undermine a citizen's 'right to make anonymous transactions', even one to make negative interest rate policies easier to impose. The growth in paper money issued recently seems curiously out of step with the fast switch by most people to use electronic transactions. It's a trend even evident in New Zealand. Our growth in $50 and $100 notes is three times the growth in the real economy.
In Australia, all banks have passed on the -25 bps rate cut by the RBA - except the ANZ. They have kept 6 bps for themselves because of 'higher funding costs'. ANZ have form for this type of move; they led the way in New Zealand, holding on to a part of the last rate cut in New Zealand for the same 'reason' - even though wholesale swap rates are now at near record lows. Regulators just seem to turn a blind eye to this capturing.
In New York the benchmark UST 10yr yield is slightly higher at 1.79%.
But the oil price is a tad lower, now just over US$43/barrel in the US, while Brent is now just over US$44/barrel.
The gold price is down -US$17, now at US$1,274/oz.
And finally today, the NZ dollar opens at 68.7 US¢, at 92.1 AU¢, and at 59.8 euro cents. The TWI-5 index is now at 71.5.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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In Australia, all banks have passed on the -25 bps rate cut by the RBA - except the ANZ. They have kept 6 bps for themselves because of 'higher funding costs'. ANZ have form for this type of move; they led the way in New Zealand, holding on to a part of the last rate cut in New Zealand for the same 'reason' - even though wholesale swap rates are now at near record lows. Regulators just seem to turn a blind eye to this capturing.
One bank hiked a month before to net out unchanged?
Bank of Queensland is lifting interest rates for housing investor loans by 0.25 of a percentage point, while owner-occupiers will wear a rate hike of about half this size.
In a surprise move blamed on higher funding costs, the regional lender on Thursday announced the first significant rate hike for mortgage customers since most banks raised interest rates in late 2015. It's a change that is likely to be watched closely by rivals.
BOQ also raised its interest rates by 0.18 of a percentage point independently of the Reserve Bank in November last year, a time when most banks were hiking rates. Read more
I guess the logic relates to costs associated with raising extra capital ahead of the imposition of APRA's higher risk weighting standards in respect of residential mortgage assets.Since the latter are likely to be raised again after further stability investigations, the "lucky" bank depositors will be set upon again to further socialise the cost of the Aussie dream for the dwindling few.
Same in England if this Barclays Bank offer is taken up.
The no-deposit mortgage has returned, with Barclays removing the need for buyers to put down any deposit when buying a home using its “family springboard” mortgage.
The deal had previously allowed people to climb on to the property ladder with a 5% deposit, provided that a “helper” – often the home buyer’s parents – puts cash equating to 10% of the house purchase price into a savings account linked to the mortgage.
Under the new deal, only the 10% contribution from parents is needed. This cash will be returned to the borrower’s parents after three years with interest added – provided borrowers have kept up with their mortgage repayments. Read more
These types of mortgage offers usually presage the end of the bull residential property pump cycle and we all know what comes next.
The regulators will only give a slap on the hand.
http://seekingalpha.com/news/3179018-big-banks-settle-u-s-rate-rigging-…
Why not fine them 100% of illegally gained profits? Fraud goes unpunished at the highest level.
Clinton would beat Trump. And Sanders would beat him by a landslide.
Both Trump and Sanders are protest candidates popular with the dispossed, which now includes the middle classes. The significant thing is that big turn in the tide, the candidates themselves are less important than that tidal movement.
I dont see Trump as a protest vote as he's as extreme if not more so than the other candidates, ie more of the same but with knobs on. Sanders on the other hand, yes and that is amazing on how well he has done.
I guess its a triumph of marketing an image over everything else.
While I agree on Clinton being probable, lets face it Trump was considered a no hoper. Now though he has just achieved the un-thinkable he has won. Moving forward he runs one of the biggest and most powerful political parties/machines in the world.
Indeed, if the FBI find something substantial the democratic party might find themselves with no candidate, pretty unlikely though. I quite like the comment "Id rather vote for the devil than (edit) Hilary Clinton" well congrats you now have that option, LOL.
The thing about Florida is climate change is making its mark and the various Mayors are screaming, if you are right on that state then HC's chances are probably way better then I give her, which is 60/40.
Its not a good outlook whatever way you look at it.
Sanders gets in he would be the Oldest President ever.
Clinton gets in she would be the second oldest.
A 70 year old at the start of a presidential term doesn't scream stability. 2 terms and they would be 80 when they finish (if they make it that far)
POTUS is determined to toast any other trade arrangement we may be nurturing in respect of China.
This past week, China and 15 other nations met in Australia with a goal of getting their deal, the Regional Comprehensive Economic Partnership, done before the end of this year. That trade deal won’t prevent unfair competition among government-subsidized, state-owned enterprises. It won’t protect a free and open Internet. Nor will it respect intellectual property rights in a way that ensures America’s creators, artists, filmmakers and entrepreneurs get their due. And it certainly won’t enforce high standards for our workers and our environment. Read more
Have you ever watched a program called "Distraction"
Now it is a MSM app for the US of A.
Same in China, no bad news is allowed , only ones that will distract the world from what the real program should really be about..."Reality"
And I certainly do not mean cooking the books and Bachelorette seduction parties, which is all we are fed on a daily basis.
Oh and naked foodie programs from Hamilton.....that pass for restaurant news.
How could you .....miss that......very up front...and personal.????
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