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A review of things you need to know before you go home; Building activity underwhelms, as do mortgage approvals, used car imports very strong, bank bills hit 3%

A review of things you need to know before you go home; Building activity underwhelms, as do mortgage approvals, used car imports very strong, bank bills hit 3%
For Wednesday, March 5, 2014. <a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

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

CHINA DECIDES ON +7.5%
The top leadership say they are looking for real growth in their economy in 2014 of 7.5%, down a bit from the 7.7% in 2013. Don't bet against them, even if they have to ... shall we say, work closely with the National Bureau of Statistics.

BUILDING ACTIVITY IN 2013 Q4
The data out today underwhelmed observers. The nominal 10% year-on-year growth was the lowest in more than a year. The non-residential components were very weak. The housing renovation market on the other hand has been very strong, even though it is not a huge part of the overall work. 

CHRISTCHURCH FLOODING
The Garden City has been hit hard with floods yesterday and today, and the Government is using its special powers and agencies set up for the earthquake response to help with this latest emergency.

GOVERNMENT DEBT
As at the end of February, the total value of Government securities on issue is basically unchanged at $75.6 bln. The signalled paydown of debt has not yet started to any significant degree.

HOME LOAN APPROVALS
Mortgage approvals have been slower in 2014 so far than they were in the same period a year ago. Last week we saw 7,059 approvals for $1.256 billion their highest weekly levels in 2014, but still down about 9% on what they were in an equivalent week a year ago.

POWDER DOWN, BUTTER UP
The GlobalDairyTrade auction early this morning offered 41,000 tonnes of product. Overall prices fell 4.04% in USD and almost 5% in NZD. Prices for milk powders are coming under pressure. But prices for butter and cheese are still rising and these are product lines Fonterra is strong in.

USED CAR IMPORTS HOT
Sales of used imports are up a remarkable +32% in February compared with the same month a year ago, and these are now at their fastest pace for a February since 2006 (when we were coming off a five year period of being flooded with 'used Japanese imports'). This is the first time since 2008 that the rate of used imports have exceeded 100,000 per year. We buy 23% more used imports than new cars. 

WHOLESALE RATES
Swap rates bounced back up sharply today reflecting the easing of Ukraine tensions. The rises were 'positive' and built back the steepening of the curve. The 90 day bank bill rates also pushed on up to the 3.0% level today, the first time they have hit 3% since September 13, 2011 when markets misread signals that an OCR rise was coming. This time too, markets 'know' an OCR hike is coming, having it fully priced in.

OUR CURRENCY RISES
The NZD has crept up a little today. The TWI is now at 78.8, and the NZD is worth US83.9c and A93.7c.

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1 Comments

How much are those NIWA soil maps going to change?

 

Although it has been bloody awful in the city and Banks Peninsula, travel 20-30km up the road and it has just been steady rain with no flooding. The timing has been great, Kumbel Shire is greening before my eyes, and, if the temps hold up for a month or so, Canterbury farmers could go into winter well set up.

 

Feel sorry for those on TC3 land who will, no doubt, have to battle their insurance companies all over again with no government support.

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