A review of things you need to know before you go home on Friday; initial rate changes start, building consent levels disappoint, tourists flood in, as do migrants, swap rate falls pause, NZD falls

For Friday, January 30, 2015. Image sourced from Shutterstock.com

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

TODAY'S MORTGAGE RATE CHANGES
There was a change today from ASB who added a 5.99% five year 'special'. That matches what Westpac already offers. Both Kiwibank and SBS Bank offer even lower five year rates. (Sovereign also is offering the 5.99% rate.)

TODAY'S DEPOSIT RATE CHANGES
UDC cut rates today for terms 18 months and longer, most lower by about -20 bps. But for the one year term they raised their offer by +5 bps to 4.55% (or 4.65 for deposits of $100,000 or more).

FIXED vs FLOATING
Interestingly, in December we seemed to have stopped rushing for a fixed mortgage. As at December, 72.4% of all mortgages were on a fixed rate, the same level as for November. (Back in 2008 the level of fixed mortgages was as high as 83%.)

PEAK CONSENTS?
Despite a selective and somewhat misleading press release from Nick Smith, December building consent data out today showed that for 2014 the buildup seems to be losing momentum. That is especially true for Auckland who actually need consent levels at nearly double existing rates just to supply present demand (let alone for the previous years of undersupply). The data for the Waikato was also worryingly tame.

CHANGING FLOW
Migration data for December out today showed a level topping 50,000 for the year for the first time. A few years ago we were reporting "a planeload a day" of Kiwis leaving permanently for Australia. In 2013 we were talking about "a planeload a week". Things have changed dramatically. In December 2014 a net 170 people migrated to New Zealand rather than from it - almost "a planeload a month" arriving.

A POPULAR SPOT
December is the peak of the international visitor flows as well. For the first time ever, we welcomed more than 402,500 international arrivals at out ports and airports in December, the first time the 400,000 level has ever been reached. That is part of more than 2.8 mln arrivals over the whole of 2014, also a record.

A SLIGHT RESPITE
Affordability improved slightly for first home buyers in Auckland and Christchurch last month, but worsened in Wellington according to the Roost Home Buyer Affordability Report.

WHOLESALE RATES HOLD LOWER
After falling sharply yesterday, wholesale swap rates held those lower levels today. However the 90 day bank bill rate popped back up a couple of basis points and is now at 3.67%.

NZ DOLLAR DROPS
Check our real-time charts here. The NZ dollar was down sharply overnight but has clawed back a small amount during today. It is now at 72.9 USc, at 93.7 AUc which is based on more Aussie dollar weakness, and the TWI is now at 76.1.

You can now see an animation of this chart. Click on it, or click here.

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NZD
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Source: CoinDesk

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13 Comments

Baltic Dry Index just hit 28 year low:
http://www.businessinsider.com.au/baltic-dry-index-hits-record-low-2008-...
That has to be a positive sign right?

Meanwhile only a few months into this, ppl are starting to go hungry.
This doenst look good,
http://peakoil.com/consumption/oil-cash-waning-venezuelan-shelves-lie-bare
 

From 11000 to 660? yes bound to be good.
 

The reason for the BDI falling (at least an important one of the many reasons) is the roll out of the Maersk Triple E class super carriers. These giants are 1,312ft long, carry 2,500 more containers than the previous  class and are 37% more efficient than their predecessor, which was itself 20% more fuel efficient than its predecessor.
Maersk awarded Daewoo a $1.9 billion contract for 20 of these beauties in 2011 and they have been steadily rolling off the production line ever since.
The BDI has crashed because the increase in supply of container carrying space has far exceeded the increase in containers to be carried. Couple this with an over 50% increase in fuel efficiency and a crash in fuel costs and the result is inevitable to all except pea-brained doomsters who will point to it and begin shouting "The sky is falling....the sky is falling".
The fact that shipping now uses less than half the oil per tonne carried is one of the many reasons global oil consumption growth has almost stopped. It could actually be falling by as early as late next year.

Isn't the BDI an index measuring the cost of moving raw materials by bulk carriers? ie: nothing to do with containers?

Anyone know why Snodgrass is warbling on about container ships when the BDI is a measure for bulk carriers?
Here Snodgras, just so you dont embarrass yourself again, is the BDI definition:
http://en.wikipedia.org/wiki/Baltic_Dry_Index
There you go. [Gratuitous insult deleted. Childish and not needed here. Ed.]

The interesting thing is the utter crap he made up in order to make it look like he knew what he was talking about....
 

canadian oil field players now going the way of US shale players
http://www.wsj.com/articles/oil-sands-producer-defaults-on-debt-to-canad...
Pension fund loss.
oh dear.

Anyone know why Snodgrass is warbling on about container ships when the BDI is a measure for bulk carriers?
 
Probably to try and fit with his narrative. 

Um, no.  If nothing else its a few v many, makes no sense, data please.  Oh and its not the numbers of ships that is measured.
Also,
http://en.wikipedia.org/wiki/Baltic_Dry_Index
So raw materials, containers are finished materials that would be the HARPEX.

BTW, the BDI was 11000 at one point now its 660....a few ships wouldnt do that
 

Oil seems to have found a bottom.
http://oil-price.net/
Interesting thing is it itsnt real demand it seems but investors jumping back as the rig count has dropped so much.  So as it bottoms and starts to climb I assume we'll see yet more speculation pushing the price up again, maybe $80 inside 6months is a goer.  The Q will be will the rig count continue to drop.  $60 a tank might be short lived.