Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
BNZ introduced a "special" one year mortgage interest rate of 4.69% and cut its standard and FlyBuys fixed rate mortgages by 10-20 bps.
TODAY'S DEPOSIT RATE CHANGES
HSBC cut the interest rates on 18 month to 5 year term deposits by 10-20 bps. Kiwibank cuts interest rates on its Notice Saver, Front Runner and Bonus Saver accounts by 25bps.
FONTERRA SLASHES MILK PRICE FORECAST TO $3.85
Fonterra cut its farmgate milk price forecast by $1.40 to $3.85 per kg of milksolids, due to what chairman John Wilson decsribed as the continued significant imbalance in the global dairy market between weak demand and surplus supply. "It will be a tough season for our farmers," Wilson said. Fonterra would assist farmers by offering them what it is calling "interest free loans" of up to 50 cents per Fonterra share, which will be interest free for up to two years and will need to be repaid when the farmgate milk price or advance price rises above $6 per kg of milk solids.
AUCKLAND HOUSE PRICES DROP ON TRADE ME PROPERTY
The average asking price of Auckland homes advertised for sale on Trade Me Property dropped by $16,650 (2.2%) in the three months to July compared to the three months to June. Trade Me said it was too early to say whether this was just a winter blip or the start of a longer term easing in prices. Prices continued to rise around the rest of the country.
WHOLESALE RATES LOWER
Wholesale swap rates were trending lower ahead of Fonterra's latest farmgate milk price forecast. The swap curve continued to steepen with long trem rate sdown 5bps. The 90 day bank bill rate is at a low 3.01%.
NZD STRENGTHENS AGAINST AUD
The NZ dollar is currently at 65.5 US¢. It's strengthened by around 30bp against the Australian to 88.78 AU¢, following weaker than expected employment data. The NZD's at 59.9 euro cents. The TWI is at 70.3. Check our real-time charts here.
CHINESE GOVERNMENT READY TO PUMP ANOTHER US$322 BILLION INTO ITS STOCK MARKET
The Chinese government agency charged with investing in that country's stock market to prevent it crashing further, is reportedly seeking an additional two trillion yuan (US$322 billion) to pump into the market and stem a price slide. That would be on top of the 3 trillion yuan the Chinese government has already pumped into its stock market to prop it up.
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2 Comments
As a result of APRA publicly jawboning the banks to tighten up on lending to property investors, the banks have lost some lustre on the ASX over the past 2 weeks. AMP has susoended all investment lending Yesterday ANZ went into suspension at the open of the ASX and remained in suspension all day. It simultaneously announced a capital raising of $3 billion to meet the new limits and gave a reduced forward earnings estimate. The banks got hammered. The ASX lost $30 billion in value for the day. ANZ out of suspension today. ASX down a further $40 billion today. Total for 2 days $70 billion. Not good.
It was an institutional raising. Filled overnight. Institutions have taken an immediate haircut.
The Australian Prudential Regulation Authority (APRA) is trying to get the Australian banks under better control. While that may not be good for the shareholders, it is good news for the Australian depositors whose money will be more prudently managed in future. It isn't just jawboning - there are changes in funding which have to be in place before July 2016.
In the meanwhile the main NZ banks are still expatriating over $1000 per person in profits from NZ to Australia. - that's not $1000 per banking user, that's $1000 per resident of NZ whether they use banks or not.
We can but hope that the RBNZ is taking note of the prudential changes underway across the Tasman.
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