A review of things you need to know before you go home on Tuesday; ANZ raises home loan rate, cuts terms deposit rates, B&T says prices up, car sales flat, rents jump, equities suffer, swaps up, NZD stays high, & more

A review of things you need to know before you go home on Tuesday; ANZ raises home loan rate, cuts terms deposit rates, B&T says prices up, car sales flat, rents jump, equities suffer, swaps up, NZD stays high, & more
ID 22702269 © Daniaphoto | Dreamstime.com

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

MORTGAGE RATE CHANGES
ANZ raised its 2 year fixed rate +10 bps, and dropped its carded 18 month rate back to what it was offering informally.

TERM DEPOSIT RATE CHANGES
ANZ trimmed -5 bps from most of its term deposit rates between 3 months and nine months.

VOLUMES MODEST, PRICES UP
Dominant Auckland realtor, Barfoot & Thompson reported upbeat November selling prices. Their average and median prices are both within a hair's breadth of breaking previous records set in March 2017. The sales levels aren't especially high, and the number of new listing coming into their system is at an eleven year low for a November.

PEAK CAR IN REAR VIEW MIRROR
November car sales came in at almost exactly the same level as for November 2018. SUV sales however were up +11% on the same year-on-year comparison. Commercial vehicle sales however were down -12% on that basis as the tradie demand eases off. New vehicle sales overall are definitely tracking lower on a full year basis now.

STEEP RENT RISES
The national median rent has now reached a new record high of $454.50/week, up from $445/week in October and up +5.7% pa. Median 3 bdr house rents have jumped to $491.67/week, a rise of +9.3% in one year. In Auckland the rise is +5.5% to $686/week. In Wellington for the same 3 bdr house it is up to $663, an +11% rise in a year. In Christchurch it is up +3% to $433/week and that is not a record high. Christchurch has a full supply of houses for rent, no doubt keeping things restrained. But that is not the case in Wellington and Auckland both of which hit new record highs. And as the increases have mounted quickly in the past few months, you do have to wonder if the recent flurry of building standard obligations (all of them welcome) haven't pushed up rents faster that they would otherwise have risen. The certainly are steep rises in a short time period. Rents for 2 br flats aren't rising anywhere near as fast. (Our data is supplied by MBIE.)

PROMPTER?
The Government says it will set an example by committing to paying SMEs faster. It is setting a target for government departments to pay 95% domestic invoices in 10 business days, by June 2020.

A CONTINENTAL SHIFT
Australia has recorded another current account surplus, this time +AU$5.2 bln in Q3-2019. Its goods surplus was a whopping +AU$21.9 bln. (If you read other reports, these numbers will be higher because others are reporting 'seasonally adjusted' results; we are reporting 'original' results.) This means for the full year, Australia's current account surplus is +AU$3.9 bln and its goods surplus is +AU$66.7 bln. (In the year to September 2018 they had a -AU$48.3 bln C/A deficit, so the shift in one year has been enormous.) If they ever stop digging up the desert, that will leave an enormous hole in this current account and its urban centres will need go on a starvation diet.

EQUITIES TAKE A WORLDWIDE BLOW
European markets closed down -2% last night and earlier today Wall Street was down -0.9%. These are very large drops. In Asian trading they have started out lower too, with Shanghai down -0.5%, Hong Kong down -0.8% and Tokyo down a full -1.0% so far. In Australia, the ASX200 is down an eye-popping -2.1% and here the NZX50 has shed -0.6% in late trade.

LOCAL SWAP RATES UP AGAIN
Wholesale swap rates are up +4 bps for the two year tenor, and +5 bps for five years and +7 bps for ten years. This compounds yesterday's sizable rise. If this holds, that will but the two year swap rate back to levels we last saw in early August, and back then the two year fixed mortgage rate was 3.79% compared to the 3.45% today. The 90-day bank bill rate is unchanged at 1.22%. Australian swap rates are slightly lower across most of their curve. The Aussie Govt 10yr is up +4 bps today at 1.12%. The China Govt 10yr is up +1 bp at 3.23%. The NZ Govt 10 yr yield is up another +6 bps at 1.42%. The UST 10yr yield is up +1 bp, now up to 1.82%.

NZ DOLLAR FIRM
The Kiwi dollar is also firm after last night's strong rise, now at 65 USc. Against the Aussie we are at 95.4 AUc. Against the euro we are still at 58.7 euro cents. That means the TWI-5 is now at 70.3.

BITCOIN HOLDS
Bitcoin is little-changed, now at US$7,350. 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.

11 Comments

Comment Filter

Highlight new comments in the last hr(s).

A strange day of freedoms being limited; $50 for foreign political donations (how will foreign nations influence our politics now?), and the cannabis referendum will limit purchases to 14 grams per day. Both very limiting actions.

Shouldn't foreign political donations be instead limited to 1 x $20m house purchased from the former Prime Minister, and 448 grams of high potency cannabis per day?

I'll give you a kidney if you can smoke 14 grams in a day without passing out

Bill Clinton could.... remember he never inhaled!

In Auckland the rise is +5.5% to $686/week. In Wellington for the same 3 bdr house it is up to $663, an +11% rise in a year.

The RBNZ cut the OCR from 1.75% in November 2018 to 1.00% today and the 10 yr NZ Government bond yield basically halved over the same period. It is inevitable today's discounted present value of future cash flows will rise for both assets and liabilities.

Australia's current account surplus is +AU$3.9 bln and its goods surplus is +AU$66.7 bln

Unsurprising when retailers around the country are struggling to sell stuff (mostly imported since Aussie doesn't produce much) and businesses are destocking at a rapid pace.
They should probably thank mortgage holders in NZ for a sizable portion of their CA surplus.

The Aussies are just fine. They beat Pakistan 2-0 in the cricket & they have the Black Caps next on the menu. I hope our Boult from the blue is back?

We are good but not that good. Openers are weak. We'll get smashed.

Aussie, Aussie, Aussie! Well done them.

Yields must be going up with rents rising!!!!

Bond yields that ultimately force mortgage rates to rise? Those yields? Looks like it...("The NZ Govt 10 yr yield is up another +6 bps"). So any rent rise/capital cost yields will just get gobbled back up by lenders in higher lending costs.

Bit of an unusual dislocate between US-10YR and US Stock Markets today – normally the 10YR swoons at every stock index back step – but not so today?