Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
The Bank of China NZ has cut its 18 month rate to 3.39%and its 4 and 5 fixed five year rates to 3.99%. And it has raised its two year rate by +24 bps to 3.39% from 3.15%.
TERM DEPOSIT RATE CHANGES
The Co-operative Bank has cut its 3 and 6 month rates by -10 bps.
ON THE UP
Today's rise in dairy prices at the GDT auction has cemented in good year-to-date gains. As a consequence, a number of dairy analysts have raised their farmgate milk payout estimates for the 2019/20 season. Details are here, and here. But none of them have gone as high as the AgriHQ calculator estimate of $7.90/kgMS
ENDLESSLY REPEATING VIOLATIONS
The Australian anti-money laundering regulator alleges more than 23 million contraventions of the law by Westpac Banking Corporation (the complaint makes gruesome reading) with the RBNZ 'looking closely' for any relevance to Westpac NZ.
FARM SALES LOWER
The market recorded 74 sales of farms in October, which is -26% below the same month last year and -30% below the average October over the past four years. The median price per hectare was $25,637 in October 2019, marginally higher than September, and -5.5%% below October 2018. The October 2019 sales included 8 arable farms, 6 dairy farms, 22 finishing units, 9 forestry properties, 14 grazing properties, 12 horticultural farms, and 3 special farms. Realtors complain that banks are tightening their lending criteria, making deals hard to close. The rural resistance mood isn't helping either, despite rising product prices.
LIFESTYLE BLOCK SALES HIGHER
There were 612 lifestyle blocks sold in October nationally, up from 514 in September and 592 in October 2018. The median price for all lifestyle properties sold in the three months to October 2019 was $695,000 and was $44,500 or +6.8% higher compared to the three months ended October 2018.
EXPECTING HIGHER HOUSE PRICES
Two thirds of those surveyed for the RBNZ say that they expect house prices to rise over the next 12 months. That is the highest this survey has reported since September 2016, and represents a jump from under 50% just 13 weeks ago. These same people reckon consumer inflation is running at 1.7% (median) when the last Stats NZ report says it is running at 1.5%.
BUYING FEWER TRACTORS
For the sixth month in a row and the ninth month in the past 12, tractor sales have declined. They were for -6.2% in October from the same month a year ago, and for the year to October, they are down -10%.
DID YOU KNOW ...
There are now 2,829,879 car registered on New Zealand roads. That is +1.2% higher than in October 2018 and interestingly is not the record high which happened in June when 2,843,008 cars were registered. Since then, -13,129 have dropped of the registration records. And just because we have the data to hand, we can advise there are another 43,691 rental cars on our roads. That isn't a record either; that is -18% fewer that in January 2018 (or -9838 fewer).
CHEAPER BOSSES
The State Services Commission is crowing that it is forcing down the pay of the chief executives in the public sector. The average pay for public service chief executives increased +1.2% in 2018/19 compared with a +2.3% increase for chief executives in the broader public sector and +2.9% in the private sector. "Overall, however, the Commissioner’s conservative approach has resulted in the average salary package paid to public service chief executives decreasing -4.3% in 2018/19. The average salary package paid to public service chief executives in this year’s report is $478,000, compared with $500,000 in 2017/18 and down from $504,000 in 2016/17. This represents a -5.1% decrease since 2016/17".
NO WATER ISSUES THIS YEAR
New Zealand's hydro lakes are now much fuller than is normal for this time of year. In fact they are at levels already we don't usually see until April. That means river flows are at or above normal. And Auckland's water reservoirs are close to their historical average levels at 89% full (average is 91% full in mid-November). And a quick review of the soil moisture map below shows we are at the 40-year average nationwide, or wetter. Rain is what makes New Zealand special.
LOCAL SWAP RATES SOFTER AGAIN
Wholesale swap rates are softer today, down -2 bps across all durations. The 90-day bank bill rate in unchanged at 1.21%. Australian swap rates are down even more today, -2 bps to -5 bps in a flatter bias across the curve. The Aussie Govt 10yr is down -8 bps at 1.08%. The China Govt 10yr is down -1 bp at 3.21%. The NZ Govt 10 yr yield is down -3 bps at 1.36%. The UST 10yr yield is falling away faster, today down -5 bps, back to 1.75%.
NZ DOLLAR FIRM
The Kiwi dollar is firmer today at 64.2 USc. Against the Aussie we are up at 94.2 AUc. Against the euro we are firmer at 58 euro cents. That means the TWI-5 is now up at 69.4.
BITCOIN FLAT
Bitcoin is now at US$8,134 and that is little-changed from this time yesterday. The bitcoin price is charted in the currency set below.
This chart is animated here.
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