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A review of things you need to know before you go home on Monday; service sector shines; Auckland Council borrows cheap; NZIER says growth will continue; NZD recovering

A review of things you need to know before you go home on Monday; service sector shines; Auckland Council borrows cheap; NZIER says growth will continue; NZD recovering
For Monday, March 16, 2015. <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.

TODAY'S MORTGAGE RATE CHANGES
There were no rate changes today.

TODAY'S DEPOSIT RATE CHANGES
There were no rate changes for term deposits either. However we note that Liberty Financial now has an investment grade credit rating from S&P. They have improved from BB+ to BBB-, so congratulations to them. It is not everyday this is achieved.

SERVICE SECTOR STRONG
Today's release of the BNZ-BusinessNZ PSI for our service sector was actually quite impressive. It follows a good January index too. It suggests that GDP growth in the March 2015 quarter will not disappoint. It is both the index results for output and new orders that caught our eye.

AUCKLAND COUNCIL SNEAKS ONE
Auckland Council has closed its retail bond offer having successfully raised NZ$250 million. The interest rate for the bonds has been set at 4.017% per annum, reflecting a margin of 0.30% per annum over the effective swap rate for a 5.5 year period. For investors to accept 4% for a 5.5 year term, you either have to be ignoring the bank's retail offer rates (averaging 4.87%), or like paying your broker's fees. Makes no sense to me.

THE GROWTH WILL CONTINUE
The latest NZIER Consensus Forecasts shows economic growth holding up at solid levels over the coming years. The New Zealand economy performed strongly over 2014, boosted by improving household consumption and investment. Forecasters expect growth of 3.3% in the March 2015 year, tapering slightly to 2.9% and 2.8% in the following two years. They see fixed investment levels in residential housing hard to maintain after 2016/17 however.

NEIGHBOURS DEBT ISSUE
Australian households are the most indebted in the world, according to research by Barclays, which warns that the country would be vulnerable in the event of another global financial shock. Barclays chief economist for Australia Kieran Davies says private sector debt-to-income gearing is currently at an all-time high of 206%, up from a pre-global financial crisis (GFC) level of 191%. New Zealand's equivalent level? 158%.

BIG BUY
Fonterra now owns 18.8% of Chinese infant formula manufacturer Beingmate. It cost them NZ$755 mln (RMB ¥3.464 bln )

BRIDGES FOCUSES ON TUNNEL
Transport Minister Simon Bridges says he is "taking steps to future-proof the route for an additional Waitemata Harbour crossing in view of the rapid growth Auckland is set to undergo in the next 20 years." Bridges has asked the NZ Transport Agency to recommence work on the project. He says the preferred route is a tunnel east of the Auckland Harbour Bridge between the Esmonde Road interchange on the North Shore, and Victoria Park Tunnel and Central Motorway Junction in central Auckland.  “Advisors are preparing for the designation process and are putting together a business case focusing on the timing of construction and potential funding options,” Bridges says, adding it's likely to cost between $4 billion and $6 billion.

WHOLESALE RATES FIRM
Today, local wholesale interest rates rose another +1 bp across the curve, far less than what we saw in New York at the end of last week. The 90 day bank bill rate was down -2 bps today to 3.62%.

NZ DOLLAR RISES
Check our real-time charts here.  The NZD took a bit of a fall against a strengthening US dollar over the weekend and started lower today. But in the past hour it has clawed back much of what it gave up on Saturday. It is now at 73.6 USc, at 96.3 AUc, and the TWI is at 79.2. We are also at an all time high against the euro at 69.98 euro cents and now almost certain to break through the 70 euro cent level.

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

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17 Comments

Don't do a road tunnel.  Do a railway tunnel and do it now.   Rail all the way to Albany.

Rail gets more useful and more use, the more places you can get to with it.

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Disagree. Rail only goes where planners say people should go. Roads get people to where they really need to be. Fully support AT's dive into community electric cars. When app connected, that will leave the old 'english solution' of rail (and maybe even busses ?) as wasted public infrastructure "investment". Why spend billions on C19 ideas?

 

I would likely give up my city car for a shared AT EV. I would never do that for bus or train service. Ever.

 

A $250 mln investment in public EVs will move more people more efficiently that a $3 bln 3.5 km loopy rail connector.

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But roads only have limited capacity. One dual train line can move as many people as 30 lanes of motorway. Aucklands roads are already at capacity there is no room to build any more. Public transport is the only option. Why do we need 16 lanes of bridges when there are only 6 lanes of motorway at either end?

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Roads will have much more effective capacity once we have self driving cars that can go at a constant speed with close following distances. It's a while away though. 

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sorry .. was replying before but my computer reset itself....
what was that you were saying about self-driving cars...

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Great no need for another bridge or any more roads then. 

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roads arent about moving people, they're about generating government (road tax, rego & WOF fees, petrol tax, duty and excise on vehicles) and corporate income (big fuel companies that bid for contract access into NZ markets) for private peoples' money.

otherwise effort would have been made to get rail, light rail, bus and low cost high density living long ago.

Plus the private motor vehicle scam keeps MANY NZ'ers off the govt unemployment books.
its a win/win ... they get low unemployment , you get to pay lots of taxes and fees.

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Also I think you will find that cars are 19th century technology and all around the world vehicle kilometres per capita are dropping while public transport use is increasing rapidly. Just because you will never take a bus or train into the city doesn't mean that no one will. 

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the increase in public transport is directly linked to population density.

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And the fact that smart phones make it significantly easier to use public transport and give you something to do while using it. I've got an app on my phone that shows me on a map where the next bus is I don't have to leave the house until the last minute. Didn't have anything like that 5 years ago. 

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what % of NZ land area (that isnt bush reserves of course) is serviced by that system

 

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Actually I agree Mr Chaston about that EV scheme. Your smart phone is a big part of that innovation as well.

But you still have to get the masses across the water. A road crossing is dopey because to make it effective will mean duplicating with a parallel motorway all the curent motorways between Meremere and Puhoi. $100 Billion in that probably.

Would you go for a cheap EV exclusive tunnel,  where the driverless cars could link into high speed trains and get to Albany in less than minutes.

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Or spend the 6 billion providing good public transport for all of Auckland rather than just to the shore (eg trams, crl, more dedicated busways) 

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Totally agree - solves what was the world's only one way underground diesel train station problem.

 

More importantly provides rail to where the passengers live vs the near zero numbers who will access the $ Billion stations between Mt Eden and Britomart during off hours.

 

The current rail program is about as dumb as it gets ! It will do zip to solve inner city transport during the day.

 

Analysis is flawed in that they have failed to segment the travel as to time and from / to locations. As McKinsey say some 80 % of their work world wide is due to a failure to segement the markets. Same problem here.

 

Heavy rail provides no benefit whatsover for getting around the city during off peak. It is solely of use for mass movement at the morning evening peaks. I watch the near empty trains going though Glen Innes all day and wonder just who is going ot use them every 7 - 10 minutes as quoted in the 10 year plan.

 

Incremental costs of $ 143 million pa - Ticket sales just $ 23 - Outrageous. Ratepayers to pick up the bulk of the difference.

 

Once across the Harbour can then use the existing northern busway - overhead or substituting for buses which are always going to get jammed on the bridge.

 

Buses to rail stations - rail to city and beyond.

 

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Disagree, 2nd Bridge, build it now with rail, walk, cycle, car...pull old one down, ITS BEYOND USE BY DATE. Make it pleasing to the eye, Wake in a toll to pay for it.

PS Have you ever used a bus service on the shore...excellent if you have half a day up your sleeve and want a scenic tour.

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The old bridge is perfectly fine. This really would be about the worst use of 6 billion dollars possible. 

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Stuff it. Get rid of the Chelsea Sugar works, and build a Florida Keys style causeway 3 metres above the water. Dirt cheap. Fraction of the price. To heck with Boatman at Greenhithe. Pay him off with some grease. That'll shut him up

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