A review of things you need to know before you go home on Tuesday; TD rate cuts, busy factories, rising truck traffic, upgrades and new stuff, swaps unchanged, NZD soft, & more

A review of things you need to know before you go home on Tuesday; TD rate cuts, busy factories, rising truck traffic, upgrades and new stuff, swaps unchanged, NZD soft, & more
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Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
Update: As a late change, Westpac has advised that they too will be adopting 3.85% as their two year fixed rate 'special'.

TERM DEPOSIT RATE CHANGES
ASB has cut term deposit rates, taking some to new lows. Update: Now SBS Bank has too.

LOOKING UP?
We have had two items of data released today showing positive improvements. Firstly, ANZ's truckometer survey "may be looking up". These indexes both rose again in May. The Heavy Traffic rose +0.8% month-on-month to be +4.7% higher than May 2018. The Light Traffic +0.9% month-on-month to be +2.3% higher than the same month a year ago. ANZ says "growth in traffic may be finding a floor, consistent with our expectation that economic growth will bottom out around the middle of the year."

BUSY FACTORIES
Secondly, another of the final components for Q1 GDP was released today, for manufacturing sales. With price effects included, the actual total value of manufacturing sales was $28.5 bln in the March 2019 quarter, up +$1.1 bln or +4.0% from the March 2018 quarter. For the year to March, manufacturing sales are up +5.2%. Local production in both the meat and dairy industries starred.

IMPORTANT UPGRADE
We have made upgrades to our unique auction results database reporting pages. The new features include more detailed result descriptions and links to homes.co.nz and Realestate.co.nz.

NOW ON PODCAST
If you are into getting your news via podcasts, don't forget you can subscribe to our Economy Watch daily podcast. The "international edition" is released before 9am each business day. It is an independent look at what went on overnight around the world that may affect New Zealand. Find it on Apple Podcast, Google Podcast, Spotify or by RSS.

RISK ON, OUTSIDE THE US
Equity prices sagged at the end of the Wall Street session. The S&P500 was up only +0.5% at the close and well below some European closes. Today, Asian markets have opened very positively with Tokyo up +0.4% so far, Hong KOng up another +0.8% after yesterday's spectacular rise, and Shanghai starring so far, up +1.6%. The ASX200 is also trucking along very well, up +1.3% so far. Even the NZX50 is strong, up +0.9%.

WEAK FOUNDATIONS
Maybe one reason the ASX is so positive is that the widely-watched NAB business survey for May has come in with a very healthy improvement after the less-than-stellar dip in April. But it is not all it seems. Yes, sentiment improved but business conditions measured in the survey slipped yet again.

SWAP RATES UNCHANGED AGAIN
Local swap rates are unchanged again today. The UST 10yr yield is rising again, further from this morning and is now up to 2.16%. Their 2-10 curve is a 'positive' +25 bps while their negative 1-5 curve has widened to -12 bps. The Aussie Govt 10yr is little-changed, up +1 bp to 1.48%. The China Govt 10yr is up +2 bps to 3.28%, while the NZ Govt 10 yr is up +2 bps to 1.77%. The 90 day bank bill rate is unchanged at 1.61%.

NZ DOLLAR SOFT AGAIN
The Kiwi dollar has been just a tad softer since it opened today and has now slipped just below 66 USc. On the cross rates we're at 94.8 AUc. Against the euro we are at 58.2 euro cents. That puts the TWI-5 down to 70.7.

BITCOIN RISES
Bitcoin has risen to US$7,960 which is a gain of +4.5% from this time yesterday. But most of that gain happened last night. This price is charted in the currency set below.

This chart is animated here.

Daily exchange rates

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USD 
NZD
End of day UTC
Source: CoinDesk

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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11 Comments

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Highlight new comments in the last hr(s).

Sorry AJ - peak insanity was reached in 2000 when Palm hit $165. "At that price, the market is valuing Palm at $53.3 billion, far more than the value of its parent, the 3Com Corporation, which still owns most of Palm. Palm's market value is higher than that of many far larger companies, including General Motors, Chevron and McDonald's."

Population bomb hits Japan. "Barely 918,000 babies were born, 28,000 fewer than in 2017, and the smallest number since records began in 1899."
https://www.thetimes.co.uk/edition/world/falling-population-leaves-japan...

10
up

The headline could be re-written: STUPIDITY

Japan is lucky - it's heading in the right direction. Probably too late to morph without a jolt, but in the right direction.

Obviously the people know more than their politicians.

Don't often agree with you but 100% on this.
What are the downsides here? Difficult to keep the debt-growth-consumption Ponzi's going..

Those poor sods having to deal with affordable housing and reduced commute times

ANZ says "growth in traffic may be finding a floor, consistent with our expectation that economic growth will bottom out around the middle of the year."
The tone from the bank sounds strangely optimistic, especially when they expect RBNZ to cut the OCR down to 1% by early 2020.

Advisor - I agree - ANZ seeing potential upside in economic growth seems contrary to their expectations of falling interest rates. And ANZ has been quietly talking down interest rates for a while now.

"In May, the total dollar value of China’s imports fell a sharp 8.5% when compared to the same month in 2018. That brings the 6-month average change down to -4.4%, a very clear and apparent downturn in the internal Chinese economy which in imports seems to have begun right in that October to December window we’ve been describing since the very start of it."

Maybe, the downturn is a function of reduced USD priced raw material imports due to lower added value export demand from a slowing world economy.