Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
Kiwibank shifted its point of attack in the mortgage skirmishes by reducing its two year fixed rate by -30 bps to 5.99% matching ASB. At the same time Kiwibank raised its three year rate back to 6.65%, a hike of +36 bps. Then TSB Bank also added its own 'special' two year rate of 5.99%.
TODAY'S DEPOSIT RATE CHANGES
First up, Treasury increased its Kiwi Bonds retail interest rates for their six month, one and two year terms, increasing them all by +25 bps to 2.75%, 3.00% and 3.25% respectively. However they did not change their four year 3.50% rate. Then Kiwibank raised all its term deposit rates from 30 days to one year with increases ranging from +10 bps to +25 bps. The Police Credit Union has also tweaked some of its term deposit rates higher too.
TREASURY REPORTS ...
July’s Treasury review showed that confidence in the economic outlook had slipped, export growth weakened and housing market activity slowed. Inflation remained moderate in the June quarter, but with spare capacity exhausted, price pressures are expected to intensify. The international economy showed signs that growth has strengthened, while inflation is rising in the major advanced economies apart from Europe.
A DAIRYLESS DOLLOP
The ANZ Commodity Price Index recorded its fifth successive monthly decline in July, easing -2.4% in the month, to be -9.8% below the peak in February. Ten commodities reported a fall in prices last month, five commodity prices firmed and two were unchanged.
CORE FUNDING RATIO HIGH AND STEADY
The June 2014 system-wide ratio for all banks is 84.6% - that is, core funding was $262.9 bln for total loans and advances of $310.8 bln. It's a ratio far above the RBNZ minimum required and little is changing on this front. Our twelve retail banks are well funded according to this RBNZ metric.
FONTERRA REALIGNMENT
Fonterra today confirmed it has now taken control of their Brazilian and Venezuelan businesses it used to have in partnership with Nestle. And it has given over control of the Ecuadorian unit and some milk powder manufacturing to Nestle in the realignment. It does mean that Fonterra's Latin American business is now worth $3.5 bln/year in revenues.
RECORD HIGH JULY VEHICLE SALES
More on this here.
WHOLESALE RATES
Swap rates sank across the board in a flattening bias following the drop in yields in New York on Friday. One years fell -2 bps, two and three years fell -3 bps, and the four years and above fell -4 bps. The 90 day bank bill rate was unchanged however at 3.71%.
OUR CURRENCY
Unlike the swap yields, the NZ dollar is unchanged today. The NZD is still at 85.0 USc, is at 91.5 AUc and the TWI is at 79.7.
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