What happened Tuesday

A review of things you need to know before you go home on Tuesday; NZSF hits a home run, inside traders get jail, RBA signals more cuts, NZD awaits GDT

17th Mar 15, 4:00pm by David Chaston

For Tuesday, March 17, 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.

GREAT RETURNS
The New Zealand Superannuation Fund monthly performance and portfolio report for February 2015 saw the fund grow by a massive NZ1.2 bln in just one month to NZ$29 bln. That is a +3.91% gain in February alone and brings the after tax return for the past 12 months to +18.2%. The Fund is at a record high, even after its Portuguese misstep. Very impressive.

CROSSING OVER
AMP has appointed Elaine Campbell as its new general legal counsel. She joins from the FMA where she has been director of compliance.

INSIDER TRADERS
Two 25 and 26 year old men involved in insider trading have been jailed in Australia. One was in their statistics agency, one a banker at NAB. ABS data leaked early allowed the banker to trade before markets knew the results. They were motivated by "greed, pure and simple", said the judge. The leaker got 3+ years, the banker 7+ years.

MORE CUTS COMING
The Reserve Bank of Australia has signaled a high probability of further record-breaking interest rate cuts in coming months to bolster Australia’s lacklustre economy. Apparently they don't think the cuts they have made so far have worked. So they are going to cut again. Einstein would have disapproved.

WHOLESALE RATES SOFT
Today, local wholesale interest rates fell -2 bps across the curve today after taking its lead from New York earlier in the day. The 90 day bank bill rate was up +1 bp today to 3.63%.

NZ DOLLAR UNCHANGED
Check our real-time charts here. The NZD traveled sideways today with a whiff of strength. It is now at 73.7 USc, at 96.7 AUc, and the TWI is at 79.3. We are also haven't yet consistently broken through the 70 euro cent level and are still just below. Direction for the kiwi dollar now depends on what the GDT dairy auction results show overnight.

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

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

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9 Comments

by MortgageBelt | 17th Mar 15, 4:46pm 1426563993

And Bank of Japan stays committed to monetary easing today. CPI going to 0.

by Stephen Hulme | 17th Mar 15, 5:00pm 1426564821

Full on - read more and more

by Boatman | 17th Mar 15, 5:37pm 1426567040

Aussie plans more rate cuts ........... well that will just hasten us to exchange rate parity ............. and bring with it a whole lot of problems for us .

It will be like the tide going out .

Everyone from Oil companies to Fonterra to the apple orchard owner in Gisborne will be exposed to the harsh realities of our massive arbitrage and pricing differentials with Australia .

Let the games begin !

by Stephen Hulme | 17th Mar 15, 6:02pm 1426568565

Could be worse than you could imagine if de-dollarisation gets some legs as domestic self help initiatives are to the fore of foreign diplomacy.

Having attacked its "closest ally" UK for "constant accomodation" with China, we suspect President Obama will be greatly displeased at yet another close-ally's decision to partner up with the Chinese-led Asian Infrastructure Investment Bank (AIIB). As The Australian reports, "make no mistake," the decision by Australia's Abbott government to sign on for negotiations to join China’s regional bank, foreshadowed by Tony Abbott at the weekend, "represents a colossal defeat for the Obama administration’s incompetent, distracted, ham-fisted diplomacy in Asia." Read more

by Stephen Hulme | 17th Mar 15, 4:52pm 1426564339

That is a +3.91% gain in February alone and brings the after tax return for the past 12 months to +18.2%. The Fund is at a record high, even after its Portuguese misstep. Very impressive.

Impressive indeed - achieved no doubt with more "On Risk" trading, given the extraordinary level of active hand holding extended by the Bank of Japan and it's ilk elsewhere.

Since 2010, The Bank of Japan has 'openly' - no conspiracy theory here - been a buyer of Japanese stock ETFs. Their bravado increased as the years passed and Abe pressured them from their independence to 'show' that his policies were working to the point that in September 2014, The BoJ bought a record amount of Japanese stock ETFs taking its holdings to over 1.5% of the entire market cap, surpassing Nippon Life as the largest individual holder of Japanese stocks. However, as WSJ reports, The BoJ has now gone full intervention-tard - buying Japanese stocks on 76% of the days when the market opened lower. Read more

by Boatman | 17th Mar 15, 5:31pm 1426566712

Good on the NZSF , but lets be frank , world stock markets are being pumped full of QE cash, so much so that the gains are even better than Auckland houses , and this could easily reverse .

Lets hope the NZSF takes some of these "gains " its called profit taking.

I am really worried about the way stock markets have ballooned recently , and without justification

by Grant A | 17th Mar 15, 8:07pm 1426576071

But Boatman, it isn't growth or earnings or lower interest rates that drive sharemarkets, its liquidity, and the world's awash with it while central banks print money with no end in sight (in fact Europe is only just starting and time will tell if the US is truly finished). It makes for great unease I grant you, but liquidity is the driver, and whilst inflation is still dormant, never count out the central banks ability to eventually get what they want, the wealth effect and ultimately, inflation.

by Alter Ego | 17th Mar 15, 6:27pm 1426570047

Lets be frank, The gain could be simply due to our exchange rate dropping and the pump and dump action of the Fed feeding the QE back to its customers to then get rolled over back to the action.

World collusion of a robust economy. keeping things a-float is the primary objective, plus pumping up the banking systems....and hence the Mortgage systems dependant on 14+ x savings +- ala NZ, or none at all as per Greece,

Gotta be a recovery in there somewhere.

by MortgageBelt | 17th Mar 15, 6:51pm 1426571495

AbnAmro: effects of QE globally: Interest rates can still go below zero, as people will pay for safety and convenience, about -.25, also will pay for payment ease (as opposed to using paper cash). So NZs 4% rates for deposits is quite high really.