A review of things you need to know before you go home on Wednesday; record low mortgage rates, dairy prices firm, current account deficit narrows, swaps and NZD stable, & more

A review of things you need to know before you go home on Wednesday; record low mortgage rates, dairy prices firm, current account deficit narrows, 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
Bank of China launched some very low rates. They now have the only floating rate below 5% and have 3.15% fixed for both one and two years.

TERM DEPOSIT RATE CHANGES
Cooperative Bank cut term deposit rates again across the board from 6 months and longer.

DAIRY PRICES FIRM
Dairy prices rose +2% in the GDT auction today with butter and SMP leading the way.

LESS WORSE
The June current account deficit fell to -3.4% of GDP in the June quarter, down from -3.6% in the first quarter. Some analysts found this result "pretty average", some found it "encouraging". Our net IIP (International Investment Position, or our net liabilities to the rest of the world) are at about -55% of GDP, stable, and near its least-worse position in at least the last 30 years.

GOLD EXPORTS DROP
In the year to June, New Zealand exported 9.9 tonnes of gold. This was the first time the annual tonnage has fallen below 10 tonnes since 2017 although it is up from 7.5 tonnes in early 2017. It reached almost 12 tonnes exported in 2018.

A DAY LATER
The latest Xero Small Business Insight results show payment of invoices in July 2019 deteriorated from June 2019 and was the fourth-worst month in the last year. On average invoices were paid 8.8 days late in July, versus 7.7 days in June 2019. Despite this, year-on-year comparisons show the number of positive cash flow businesses increased significantly in July 2019, compared to the month prior, meaning more than half of small businesses were cash flow positive during the month.

LOW STABLE MARKET
The number of farms being sold is well down on last year on an annualised basis but prices are higher. The Real Estate Institute of New Zealand recorded 96 farm sales in August, up marginally from the same month of last year. Their All Farm Price Index, which adjusts for differences in the mix of farms sold by size, type and location, was up +4.4% compared to a year ago.

NO REAL PICKUP YET
Lifestyle block sales are running at an annual rate below 7000 nationally, and near the lowest level since mid 2015. For August, 538 properties were traded and that is the slowest August in five years. The peak in between was 765 in August 2016 so the 2019 rate is -30% lower than that.

EQUITY MARKET UPDATE
Equity markets are modestly positive today, having absorbed the 'risk' shock of the Saudi oil attack. Today, Shanghai is up +0.4% so far, Hong Kong and Tokyo are flat. Things are less positive locally with the ASX200 down -0.2% and the NZX50 is down -0.6%. Last night the S&P500 ended up +0.3% and European markets were generally up a similar amount even if London and Frankfurt weren't.

SWAP RATES STABILISE
Wholesale swap rates are lower today but only marginally, down -1 bp for tenors of 3 years and longer. The 90-day bank bill rate is still unchanged at 1.14%. Australian swap rates are also unchanged. The Aussie Govt 10yr is down -1 bp at 1.14%. The China Govt 10yr is up +1 bp at 3.11%, while the NZ Govt 10 yr is down another -5 bps to 1.28%. The UST 10yr yield is unchanged at 1.82%.

NZ DOLLAR ON HOLD
The Kiwi dollar is little-changed at just on 63.4 USc. Against the Aussie we are still soft at 92.6 AU cents. Against the euro we have fallen to 57.3 euro cents. That puts the TWI-5 at 68.6.

BITCOIN BECALMED
Bitcoin is still at US$10,255 and continuing to meander in a tight range just above the US$10,000 level. The bitcoin price is charted in the currency set below.

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19 Comments

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A good smack of that gold should be staying in NZ as insurance.

So who should have stumped up the $750 million to keep this year production onshore? Maybe the SuperFund?

The Gov't. They see tough times ahead and are expected to go into some quantive easing and some form.
Have gold incase that happens, it rises and sell to pay for some of that cost. Insurance fund.
Pleanty of people on here doing it.

Better still if it was bought by the government bank, the RBNZ, as that NZD $750 million would go straight into the private sector as new NZD, not USD. Much better than "quantative easing" which just encourages the government to be even more wasteful (yes, apparently there are people who actually believe that's a good thing). QE should stand for Quaint Euphemism or maybe Queer Error.

I can't believe that there isn't a little set aside as insurance. Buy half a tone a year over 20 years....
No faith that Jacinda is going to get anything right regarding the coming recession. Helicopter money for the poor is about the most inventive she'll get.

I reckon Helicopter money for the poor might be a better answer than giving it to those that already have heaps.. Not like the greedy won't hoover it from the poor like they always do.

It would actually filter through the system like that.

Get an Ihumatao rent a crowd to go occupy the gold fields.
Problem solved.

No, wrong area.. its the Coromandel hippies territory.. I think they may all be too stoned to go protest.

..look on the bright side...that gold in the ground remains the property of NZ inc. Why spend the energy digging it up and paying to store in a vault where it sits doing nothing anyway. It's making us kiwis richer and richer!

So kiwibuild is officially engaged with OSM. The first Kiwibuilds were transported from Petone

Prefab homebuilding is a promising proposition if executed well. I had a tour at a Petone workshop and looks like factory workers with machines are workable proxies for builders and capenters.
Takes building productivity to a whole new level.

If countries like Singapore Sweden can do it. We surely can..

You said it.. IF executed well..

Can't wait for fletcher to announce theirs

Good. Prefab is such a no brainer. It's taking far too long to get momentum, but any progress is good progress, I guess.
We are a major timber growing country and we should be pumping these out

Agree fritz..

I'm glad they are not rushing it though.. these are long term strategies so they better get it right..

Good to see the authorities coming down harder on property crooks:

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=122...

better late than never I guess

According to Twitter the fed had to bail out the overnight lending market in the states. They made $72B available of which 50 something billion was borrowed.

https://twitter.com/moorehn/status/1174167592736579584?s=21