Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
ASB has cut some key fixed home loan rates, targeting the 18 month rate.
TERM DEPOSIT RATE CHANGES
No changes to report here.
FARM SALES LOW
The rural property market is weak as farmers grapple with pastoral land being converted to forestry and tougher lending conditions from banks. Farm sales in May were more than -20% lower than the same month in 2018 and -28% lower than the average for the past five years. The sale of arable farms fell sharply, the sale of finishing units almost halved. Prices paid for dairy farms were down sharply as well just about everywhere - except in the Bay of Plenty. Perhaps alternative use as horticulture units is keeping the land price up there. Working horticulture units sell for nearly nine times as much per ha in the BoP.
LIFESTYLE BLOCK SALES WEAK
Lifestyle block sales are weaker everywhere except in Waikato and Canterbury, Otago and Southland. Overall the May levels are -2% down, masked by 20%+ rises in those four provinces. On a year-to-May basis, the decline is almost -6% so perhaps the market weakness is easing. However as we are about to go into the heart of winter, it will be hard to tell.
"IT'S COMING" - MORE THAN A MONTH TO WAIT YET
The IRD says it will take another five weeks to pay everyone entitled to a refund. They say more than 1.3 mln assessments have been issued since the first batch went out on May 20, which include: 735,046 refunds, 147,300 bills to pay, and 442,154 people who have been told they have already paid the right amount of tax throughout the year or who have had a small bill written off. The total value of refunds paid out so far is $319 mln with recipients receiving an average payment of $434. There are bills to pay worth $57 mln with an average amount owing of around $387.
CHOOSING A DIRECTORS CLUB INSIDER
The Finance Minister has appointed Susan Paterson to the Board of the Reserve Bank. She replaces Keith Taylor. Paterson is 'experienced' in that she holds director gigs at eight other public companies, and recently was an external adviser to the previous Reserve Bank Monetary Policy Committee.
THE NEXT CUT(S)
Next week on Wednesday June 26 the RBNZ will be reviewing its OCR settings again. It is not a full Monetary Policy review this time, just a rate review. Most analysts expect no change from the 1.50% rate then, but it is not unanimous. But most do expect another cut at the August MPS review taking the OCR down to 1.25%. Between now and then the Aussies will have had two reviews and are likely to have trimmed their 1.25% policy rate at least once.
RARE & REGULAR
South Australia's usually dry Lake Eyre is filling again as Queensland rains flow east and into the dry centre of Australia. It is a regular but rare event.
SWAP RATES DOWN AGAIN
Local swap rates have fallen again today, and for the first time ever both the two and three year swap rates are under 1.3%. Aussie swap rates are down even more, opening up a greater gap with NZ. The UST 10yr yield is marginally higher at 2.00%. Their 2-10 curve is a 'positive' +25 bps while their negative 1-5 curve is at -17 bps. The Aussie Govt 10yr is down -1 bp to 1.28%. The China Govt 10yr is down -1 bp to 3.27%, while the NZ Govt 10 yr is also down -1 bp at 1.54%. The 90 day bank bill rate is up +1 bp at 1.58%.
NZ DOLLAR FIRMER
The Kiwi dollar has risen to 66 USc on US dollar weakness. On the cross rates we're at 95.2 AUc. Against the euro we are still at 58.4 euro cents. That puts the TWI-5 firmer at 70.7.
GOLD LEAPS AGAIN
The price of gold has jumped to US$1,388, a gain of +US$28 or another +2% in the last 24 hours.
BITCOIN HIGHER
Bitcoin is up strongly as well and now at US$9,740 or +4.4% from this time yesterday. It could touch US$10,000 at any time and the last time it was at that level was March 2018. This price is charted in the currency set below.
This chart is animated here.
Daily exchange rates
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8 Comments
Next week on Wednesday June 26 the RBNZ will be reviewing its OCR settings again....Most analysts expect no change from the 1.50% rate then, but it is not unanimous. But most do expect another cut at the August MPS review taking the OCR down to 1.25%....
How does one focus on the good the cuts are supposed to do without factoring the uncertainty none of the cutters saw coming?
The Fed raised rates throughout the middle 2000’s – rather than tightening, as intended, the whole world experienced only amplified and out of control mania. Beginning September 2007, Bernanke’s Fed began to reduce them – rather than accommodating, the whole world experienced only amplified and out of control panic.
I love how John Key continues to return to this issue, no the housing crisis, not the unsustainability of NZ super, not the distortions in the tax system, it’s the bloody flag.
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12242524
What he should be saying is ‘the flag was just a side issue, a little win for New Zealand, what I really regret is that when I had the political capital I didn’t do more to tackle the big issues facing New Zealand.’
The Finance Minister has appointed Susan Paterson to the Board of the Reserve Bank
“Susan Paterson brings a wealth of private sector experience with her. She has also served on public sector boards, and has good knowledge of monetary policy as a former advisor to the Reserve Bank’s previous Monetary Policy Committee,” Grant Robertson said.
But, no direct inside bank experience.
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