Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
Heaps of changes today to floating and revolving credit rates. Most went down by -25 bps following the OCR cut of the same amount. But Westpac only passed on -15 bps. We are still to hear from BNZ, HSBC and TSB Bank. The only bank to reduce a fixed rate today was The Cooperative Bank who cut their 2 year rate to 4.59%, the lowest standard two year rate.
TODAY'S DEPOSIT RATE CHANGES
Gold Band Finance and Asset Finance both cut term deposit rates today.
RBNZ CUTS
The RBNZ cut its OCR by -25 bps to 2.75%. They also signaled that more reductions are coming.
HOLDING HIGH
The REINZ released its August sales data today, which showed a steady August market, higher in Auckland.
STILL SPENDING
Retail spending using electronic cards reached $4.5 bln in August 2015, up +4.2% from August 2014. This was stronger than most observers were expecting.
TOURISTS STILL COMING
Tourist stays measured by guest nights for July 2015 were +4% higher than in July 2014. On a full year basis they are up +5.3% pa. The July occupancy rate of 34.3% is the highest July rate ever recorded.
CREDIT RATINGS AFFIRMED
Credit ratings agency Fitch has affirmed its ratings on five New Zealand financial institutions. Fitch has TSB at A-, SBS at BBB, the Co-operative Bank at BBB-, Nelson Building Society at BB+, and Wairarapa Building Society at BB+. Fitch also revised SBS and the Co-operative Bank's outlooks to positive from stable. The ratings on the other three entities are all at stable. See credit ratings explained here.
ANZ BOND ISSUE
ANZ NZ says it's looking to borrow at least $200 million through an issue of five-year unsecured, unsubordinated bonds. The issue will be to institutional investors and New Zealand retail investors, with ANZ having the option to accept unlimited oversubscriptions. Full details of the offer will be released next week when it opens.
AUSSIES STILL HIRING
The Australian unemployment rate fell in August to 6.1% (6.2% sa) and their participation rate held at 64.5%. This data was better than the professional analysts were forecasting.
HIGHER PRICES IN CHINA
CPI inflation in China for rose in August to +2.0% and higher than markets were expecting (+1.8%) - and a lot higher than in July (+1.6%).
WHOLESALE RATES FALL
Swap rates fell sharply today after absorbing the guidance from the RBNZ's MPS. Rates were down -6 to -8 bps across the board. The 90 day bank bill rate went down by -2 bps again to 2.84%. (If sustained, these changes could underpin more fixed rate mortgage rate reductions. For example, today's 2 year swap rate is just 2.76%. Even if credit spreads are rising, that leaves quite a margin to the current low 2 year fixed rate of 4.59%.)
NZ DOLLAR SLIPS
The Kiwi dollar took Graeme Wheeler's call to heart, and gave up all of yesterday's 100 bps gain. The NZD is now back at 62.8 USc, at 89.8 AUc and 56 euro cents. The TWI-5 is now at 67.4. Check our real-time charts here.
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1 Comments
Michael Reddell added an interesting comment on his blog today. Time for a paradigm shift?
But my point isn’t that oil guarantees a high living standard forever, but that abundant natural resources make a big difference, esp when there are not too many people. Compare Norway and the UK, or Kuwait vs Syria, or Equatorial Guinea with most of Africa. For advanced economies, it is rarely the only factor (cf Equatorial Guinea), but Norway was only a middling advanced economy until they got the oil, and no one really doubts that Australia’s mining industry has made a material difference to Aus fortunes over the last 25 years. For us, the comparable shock was refrigerated shipping and falling transport costs in the late 19th C that made frozen meat, and dairy, viable large scale export industries. We’ve had nothing comparable since, but just keep bringing in people, even though we have the huge disadvantage of distance. My argument is that we’d prob have been better to have not had any material immigration since World War 2. which would leave us with an agric/pastoral sector much the size it is now, “supporting” perhaps 3m people rather than 4.5m. I argue that incomes per capita would be higher now if we’d done that – can’t prove it of course.
http://croakingcassandra.com/2015/09/10/some-thoughts-on-the-monetary-p…
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