Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
The Cooperative Bank cut rates today, especially their 18 month rate which is now the market-leading offer for that term.
TODAY'S DEPOSIT RATE CHANGES
The Cooperative Bank cut term deposit rates today as well and were joined by both the branches of Indian banks - the Bank of India, and the Bank of Baroda.
FADING FAST
Currency markets were bumpy at 1:45pm today when the 'flash' (=advance) Caixin manufacturing PMI data for China was released. It was in contraction territory again and that takes its run of below-50 results to six consecutive months. Production declined further as total new orders fell at a faster pace. This data caused commodity currencies to fall and the Aussie dollar was affected noticeably. This PMI is now at a six and a half year low.
BUILDING RELATIONSHIPS
New Zealand is pushing ahead with deepening its non-industrial trade relationships with China. Two NZ ministers are in Beijing today promoting investment and tourism.
PILING IN
Readers of this website will know that some key market indicators are showing the real estate market is toppy and frothy. But buyers may still be chasing 'easy' capital gains. Last week, mortgage approvals jumped to their highest weekly levels since April. 6,757 new loans were approved worth $1.489 bln in the week. (Check out that chart link.) What we don't know, of course, is where this new strength in lending is coming from. It is one thing if it is Auckland, but something quite different if it is not.
LGFA TENDER POPULAR
The latest LGFA bond tender weighted coverage ratio dropped despite strong demand for the shorter dated issue. Yields fell across all maturities. For the 2020s the fall was -16 bps to 3.16%. For the 2023s the fall was -7 bps to 3.60%, and for the 2027s the fall was -5 bps to 4.03%.
LOOKING UP?
Tomorrow morning the Fonterra annual result and last season payout levels will be finalised. It is worth noting that dairy futures, for WMP especially, show that another jump in prices at the next auction (on October 7) are indicated. Average prices at the last auction for WMP was $2,495/tonne while the current futures prices for WMP is about $3,000/tonne. That would indicate a rise coming of about +20%.
ANOTHER PGP
A new Primary Growth Partnership has kicked off targeting on adding an additional $400 mln to the primary sector over 25 years. The 7 year program aims to reach existing and emerging markets with a new class of premium lamb products with improved health qualities. It's a $25 mln 'investment' with the taxpayer putting up half and the private sector the other half.
WHOLESALE RATES LOWER AND FLATTER
Following Wall Street's signals, local swap rates fell sharply today, down -4 bps for two year, -6 bps for five years and -7 bps for a ten year term. The 90 day bank bill rate is up +1 bp at 2.84%.
NZ DOLLAR DOWN
The Kiwi dollar is lower today although we haven't fallen as far as the Aussie. It is now at 62.6 USc, at 89.1 AUc and at 56.3 euro cents. The TWI-5 is at 67.3. Check our real-time charts here.
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4 Comments
The Kiwi dollar is lower today although we haven't fallen as far as the Aussie.
The kiwi has tumbled 15 percent and the Aussie has slumped 7.8 percent this year, the worst performers of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.
“Both the Aussie and kiwi have been suffering given the U.S. dollar strength and risk aversion that we are seeing,” said Imre Speizer, a senior market strategist at Westpac Banking Corp. in Auckland. “This is a more widespread risk-aversion story given the backdrop of concern about global growth and concern about emerging-market performance.” Read more
Those joining the stampede to mortgage penury are oblivious to the collapse of the collective NZ wealth metric.
Agree Thomas, Key is no longer even pretending to lead he is merely rolling over at the merest hint of focus group discontent. Lochinvar Station being the previous example. Ironically it might be this flag debacle that finally breaks the shield of invincibility he welds with the general public.
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