A review of things you need to know before you go home on Thursday; ANZ cuts a mortgage rate, GDP growth sags, lightweight AML action, swaps and NZD slip, & more

A review of things you need to know before you go home on Thursday; ANZ cuts a mortgage rate, GDP growth sags, lightweight AML action, swaps and NZD slip, & more
ID 22702269 © Daniaphoto | Dreamstime.com

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
ANZ has trimmed a key home loan rate, matching BNZ. Westpac did so too. But it is still far above the market leader.

TERM DEPOSIT RATE CHANGES
FE Investments trimmed some rates today.

MONEY LAUNDERING NOT CRIMINAL?
The Department of Internal Affairs has filed proceedings in the Auckland High Court against OTT Trading Group, an Auckland-based money remitter, and MSI Group, a Christchurch-based money remitter, under the Anti-Money Laundering and Countering of Financing Terrorism Act (AML/CFT Act). The DIA however is only seeking civil penalties in both cases.

MORE TIMID, BELOW POTENTIAL
Q2 Gross Domestic Product figures show slowest rate of annual growth since late 2013, but the figures are in line with what the Reserve Bank was expecting. We are still achieving positive growth per capita, even if it is low. In nominal terms, the size of New Zealand’s economy has reached $300 bln in a year for the first time. It took about 14 years to go from $100 bln to $200 bln, and nine years to reach $300 bln. If growth stays as subdued as it is now, it will be another seven years for the next $100 bln.

ONE IN THREE CHANCE OF ANOTHER OCR CUT SOON
With this slowing growth, analysts expect a 30% chance of an OCR cut next week when the RBNZ does its next review - which is high for a non-MPS review.

THE FED DID
The US Fed did cut its policy rate today, by -25 bps to 2.00% as the upper bound. But the US central bank seems unlikely to make any more changes in 2019.

JOBLESS RATE RISE
The Australian jobless rate rose to 5.3% in August from 5.2% in July. That was despite 34,700 new jobs created last month - well over double the number economists were expecting. Their participation rate fell to its lowest level in 2019 at 65.8%

MORE PROFIT IN HOUSING
Research at the RBA shows that banks are turning their back on money market arbitrage trading, primarily because they need more profitable activities than this low return-high risk activity. The RBA analysts say banks prefer profits from housing market lending.

WHEN $690 MLN IS NOTHING, NOT TO MENTION $36 BLN
In a claim today, the Australian Treasurer said his budget was back in balance, despite the final Budget Outcome papers (page 2) showing it was a deficit of AU$690 mln (OBEGAL) and an Operating Balance result of -AU$36.5 bln (page 16).

SWAP RATES DROP
Wholesale swap rates are lower today and dropped sharply at the end to finish down -3 bps for 2 years, down -4 bps for five years and down -7 bps for ten years. The 90-day bank bill rate is still unchanged at 1.14%. Australian swap rates are also fell solidly later in the day. The Aussie Govt 10yr is down -6 bps at 1.08%. The China Govt 10yr is up +1 bp at 3.12%, while the NZ Govt 10 yr is down another -5 bps to 1.23%. The UST 10yr yield is unchanged at 1.80% although it did fall in-between.

NZ DOLLAR LOWER
The Kiwi dollar is down further at just on 63.1 USc. Against the Aussie we are up at 92.8 AU cents. Against the euro we have slipped to 57.2 euro cents. That puts the TWI-5 down at 68.4.

BITCOIN SOFT
Bitcoin is marginally lower at US$10,142 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.

This chart is animated here.

Daily exchange rates

Select chart tabs »

The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
USD 
NZD
End of day UTC
Source: CoinDesk

Daily swap rates

Select chart tabs »

The '1 year %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '2 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '3 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '4 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '5 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '7 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '10 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA

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?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

27 Comments

Comment Filter

Highlight new comments in the last hr(s).
12
up

Low for day is Jacinda saying here in China when in Japan. And telling them to come to NZ for holidays. Killing of farming but planes are clean and tourists driving around for fun.

ha
That really was piss poor from the PM
you should see how much plane travel some government departments including the ministry of the environment do.
Bit ironic really

Killing off farming? Being a bit melodramatic aren't we?

How many billion a year is it going to cost NZ in export earnings? That's the sort of question the government should be able to answer before implementing new policies. NZ has consistent current account deficit of >$10billion a year - 3.3% of GDP with ~53%GDP ($160Billion) in net offshore debt that we have to pay ~$5billion interest in offshore borrowed money. That's only going to get worse as exporting and import replacing industries like Dairying and Oil and Gas are nobbled by ideologically driven govt. We need to increase exports not decrease them.

Doyle - Exactly Ideology over common sense !

We also need not to completely screw the environment over. Sorry, but raising standards a small amount is not "killing off farming".

How cool is that Aussie Budget result?!
"The final budget outcome shows .... a $6.4bn underspend on the National Disability Insurance Scheme, the DisabilityCare Australia Fund"
I reckon we could get our's back into a healthier state if we put the hard word on ACC, like the Aussie do!

banks prefer profits from housing market lending

Why don't we rename these so-called banks to something that better reflects their role in our economies. Building societies, perhaps?

...but Building Societies chanelled profits back to their borrowers and lenders rather than their Australian overlords!

Exactly - hence the ECB is killing off non-profit communal German banks to allow the elite to take over their function of lending to diminished GDP qualifying projects.

It's not a stimulus package but continuation of the longstanding ECB plan to annihilate German economic growth & prosperity by destroying the 1500 not-for-profit community banks that have been funding the Mittelstand SMEs at the heart of German economic performance last 200 years Link

These are the Bretzen of the future for Germany, once the ECB has finished killing off the 1,500 community banks, shut down innovation at the hitherto dominant SMEs and burst its most prominent product, a massive property bubble: aneamic Bretzen, thinned down & without the oomph. Link

GDP growth may have slowed but the past year hasn't been doom and gloom for everyone.
For the year ended June 2019, average hourly wage grew 2.2x the median hourly wage. Statistically speaking, the slowing economy has disproportionately hit the median worker harder than the average worker.

What's worse is assuming the median earner at $25 an hour works the usual 40 hours over 52 weeks a year, any earnings growth this point onwards will be taxed at 30%. At least, SJ and WP now get a larger cheque account to play with!

So the cost of money is getting cheaper and cheaper by the day ............... and do you know what ?

I refuse to borrow and spend .............. because every indication is that its going to get even cheaper to borrow , so I will just sit and ride it out and see where it all ends .

Besides , there is absolutely nothing material that I need to go out and buy or finance and I have no debt whatsoever .

10
up

yes you do have debt. Your local council is increasing this by the day..the hidden mortgage on your home.

Councils should put all that debt onto individual properties and charge interest at the rate that council can get. Let people pay their share off if they choose, recover the rest at any sale of property. Stop councils accumulating debt in a way that ratepayers aren't directly aware of.

Or maybe our local bodies would be run by smarter candidates efficiently and effectively if more people cared to voice their opinion through the powers of democracy. 2013 turnout - 41.3%, 2016 turnout - 42%

We can't blame councillors much when voters can't even be bothered showing up once in 3 years to the voting booths.

.. and to be fair most council obligations are imposed by central govt. in reality they have little discretionary spend as a %

We've tried that. It demonstrably hasn't worked. Democratic local government is largely a failure as voters are almost all disengaged and impassioned fringe special interests and ideologies have taken disproportionate control. I think that's largely because local news and community is dead, there is no way for candidates to reach the public anymore - and representative democracy can't work without that interaction via media and community.

There should be limits put in place.. A council can't sign off a budget that increases debt if they have debt of more than X times last years core revenues. Stop the can kicking, get the current ratepayers to pay for the infrastructure and services they use.

I was astounded the other day, walked into a local business and the owner and a customer were discussing the cost the council is quoting to put another pedestrian crossing in. How much does it cost to paint some white lines across two lanes of road, do some kerbing work to create a pedestrian island (eliminating an existing carpark each side of the road), and put up a few signs? Apparently its $100k.

Yep, completely explainable. In fact I predicted velocity "V" will drop while money "M" continues to expand. As I found out recently, it was Keynes that decoupled the two. Prior to that Velocity was seen as fixed. What doesn't shop up in GDP caused asset price inflation. Money has to find a home somewhere once it is created.

Why doesn't Auckland do something like this?
Oh that's right. We don't have any imagination. And we have the RMA.

https://www.bbc.com/worklife/gallery/20190918-the-new-island-solving-a-n...

Now Imagine going on a JUNKET and not even knowing which country you are in ?

Jeez , she is a disaster ................if she was a CEO of a Company or a sports team coach she would have been fired by now

Of course if it was a National PM it wouldn't be a junket would it Boatman? Then it would be international relations etc etc..

Its fun imagining you sitting there frothing at the mouth and muttering to yourself.

Omg, Twyford plummets to new lows. He's an idiot. Bridges is right, some of the appointments are bizarre.
https://i.stuff.co.nz/national/politics/115940657/phil-twyford-lashes-ou...

Bizarre to , we need more roads it's the only way National, well obviously.