Here are the key things you need to know before you leave work today.
TODAY'S RATE CHANGE
TSB Bank raised all fixed mortgage rates up to three years but retains its market leading two year 'special' at 5.80%. They did not change any term deposit rates. However, Westpac has raised a small set of Online Saver rates by +15 bps.
MORTGAGE APPROVALS SOFT
Borrowers may be fixing fast but they aren't switching banks or taking out new loans as quickly. Last week's new home loan approvals at NZ banks were low; the lowest or second lowest non-holiday week since early February depending on whether you are looking at volumes or values.
AUSTRALIA PAST ITS PEAK
Australian trade data was markedly worse than expected for May. Export revenues plunged, with hefty downward revisions to prior data. There were weaker prices for iron ore. Their first quarter 2014 is now seen as the likely high-water mark for their current account and real net exports. Moody's said today it expects a strong private sector capex fall over the next 2 years. That will help miners but hurt all the support industries.
DAIRY TUMBLES
Hard on the heels of today's GlobalDairyTrade auction results which saw a -6.3% fall in NZ dollars, ANZ has downgraded the next season payout forecast to $6.25/kg MS. The season just ended has a payout of $8.50 and Fonterra's first estimate for the next season was $7.00. If ANZ are right, that will mean $3 billion less in the coming year than last year. That's a big impact. They are also forecasting farm profitability of $1,180/ha, well below the average for the past seven years.
NEW VEHICLE SALES STRONG
June sales of 12,519 new vehicles is up 17% on June 2013. Registrations of 4,002 new commercial vehicles for June was a record. There were 8,517 passenger vehicles sold during June, up 13% on June 2013. Commercial vehicle registrations were up 26%. More than 32% of all vehicle sales were SUVs, up from 30% in May, also new records.
COMMODITY PRICES FALL
The ANZ Commodity Price Index recorded a fourth successive monthly decline in June, easing 0.9% from May and are now 6.7% below the peak measured in February. The largest fall was in the price of apples, which fell 6% from May – a typical pattern for this time of the year as the Northern Hemisphere export season evolves. Log prices provided the next largest price drop, dropping 5% for the month. Aluminum prices recorded the largest increase in June, rising 5% from May. Kiwifruit and wool recorded the next largest increases rising 3% for the month.
WHOLESALE RATES
Wholesale swap rates fell a little today. The falls were between 2 and 4 bps. The 90 day bank bill rate is unchanged at 3.65%.
OUR CURRENCY
The NZ dollar moved sideways today and is still at 87.6 USc, the Aussie firmed for most of the day but has fallen back following their poor trade data. We are now is at 92.6 AUc. The TWI is now at 81.2.
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