A review of things you need to know before you go home on Monday; BNZ cuts a key rate, PSI better than expected, NZIER finds gloomy economists, swaps and NZD stable, & more

A review of things you need to know before you go home on Monday; BNZ cuts a key rate, PSI better than expected, NZIER finds gloomy economists, swaps and NZD stable, & more
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Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
BNZ cut its two year rate to 3.54%.

TERM DEPOSIT RATE CHANGES
Christian Savings changed rates.

SERVICES SHOWING RESILIENCE
The BNZ-BusinessNZ PSI came in little-changed in August. This is positive because their factory PMI data was quite weak. Given that the service sector is so much larger than the factory sector, this should help to hold up Q3 GDP. (Q2 GDP is due to be released on Thursday and growth at the uninspiring rate of +2.1% is expected, down from the Q1 gain of +2.7%.

A GLOOMIER BUNCH
The NZIER's survey of economists' forecasts shows a gloomier mood is setting in to this group. Growth expectations are lower, near-term prospects for household spending are down, residential investment intentions are lower, and they think export prospects will be lower too..

YOUI NZ POSTS BIG PROFIT DROP
Insurer Youi has posted a 78% drop in June year profit from its NZ business to $2.376 million. The fall comes after a big reduction in "management fees received from group companies" to $8.407 million from $29.645 million. Youi's gross loss ratio for the year was 50% down from 63% the previous year.

MORE CORPORATE BONDS
Metlifecare has signalled that it about to issue up to $100 mln in seven year "secured unsubordinated" fixed rate bonds. It will be priced at the seven year swap rate on the day, plus an indicative Issue Margin of 1.80% to 1.90% per annum. Today, seven year swaps are at 1.23% so it might pay about 3.08% pa. In any case, they have said it won't be less than 3%. The actual rate will be set on Friday, September 20, 2019.

STREET HEAT
In Hong Kong, China is turning its proxies on to the street demonstrators, resulting in ugly street brawls in some parts of the city. Hong Kong's equity markets are falling under their own local stress, down -1% so far today. Shanghai is little changed; Tokyo is up more than +1%.

SWAP RATES TAKE A BREATHER
Somewhat surprisingly (to me at least) wholesale swap rates are barely changed across all tenors. The 90-day bank bill rate is unchanged at 1.14%. Australian swap rates are also unchanged. The Aussie Govt 10yr is up +7 bps at 1.23%. The China Govt 10yr is up +4 bps at 3.13%, while the NZ Govt 10 yr is up another +2 bps to 1.37%. The UST 10yr yield is at 1.90% and where it finished on Wall Street before the Mid-East attack event.

NZ DOLLAR HOLDS WEAK
The Kiwi dollar is also little-changed at just on 63.8 USc. Against the Aussie we are still weak at 92.9 AU cents. Against the euro we have fallen to 57.6 euro cents. That puts the TWI-5 down at 68.9 but unchanged from where we opened this morning.

BITCOIN FLAT
Bitcoin is at US$10,366 and virtually unchanged from this time on Friday. The bitcoin price is charted in the currency set below.

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USD 
NZD
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Source: CoinDesk

Daily swap rates

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11 Comments

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Oil up 10%

Expected petrol prices circa $3 litre in NZ. With minimum wage also going up, expect inflation???

Mr Orr will be happy...he wants inflation, wants us all to pay more for stuff.

Hearing a few stories of Christchurch construction companies work drying up and firms having to look further for work and consider downsizing. All linked with the completion of post quake work. Anybody else hearing similar ?

I know a builder who moved back to the north island about 18 moths ago. He said work in Christchurch was starting to dry up and had been doing 4 day weeks often. Decided to subcontract out work himself up here. He also noted houses were more affordable

The Man 2 disagrees with you.

Yes building work has been drying up in Chch for quite a while now.

Yep, she's pretty quiet out there (except in the insulation space from a flurry of late to the party landlords). Many subbies are available within a weeks notice which says a lot about the amount of work in circulation, prices are dropping too. I was looking at around $12k for a driveway two years ago, kicked the can and now looking closer to $8k.

MORE CORPORATE BONDS
More government bonds

The NZIER's survey of economists' forecasts shows a gloomier mood is setting in to this group.

Maybe, but it hasn't developed into "group think", just yet.
In my mailbox today:

At BP, we think every driver deserves a fuel discount, every time.

That’s why, from today, there’s no minimum spend to instantly redeem a BP discount!

So, whether you’re fuelling your car, your scooter, your boat, your lawnmower, or even your motorised chilly bin, you’ll save 6 cents per litre every day just by swiping your AA Membership card and using the discount instantly on up to 50 litres*. Because every driver deserves a discount.

Yes I have heard that some builders are looking for work but from the subbies that we use, they have enough work booked for the next few months no problem.
We are loyal to the people that we use and they always make time to do the work for us whenever we need them.
I am not doing as much as I used to, and can’t be bothered as may as well pay people as it is tax deductible whereas if I do the work it isn’t.