What happened Monday

A review of things you need to know before you go home on Monday; sharp rate cuts, house prices race higher, spread from Auckland, micro businesses worry, Govt bond tender canceled, NZD holds higher

12th Oct 15, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today.

TODAY'S MORTGAGE RATE CHANGES
ASB introduced some very competitive home loan rates today but they were trumped later by HSBC who launched a 4.25% rate for 1 and 2 years for their Premier clients. These are new all-time low rates for any term. This has been followed by rate cuts from ANZ.

TODAY'S DEPOSIT RATE CHANGES
ASB also cut both call and term deposit rates today, as did BNZ. TSB Bank only cut their term deposit rates.

A NEW BURST HIGHER
House price inflation (the Auckland madness) is spilling out to the provinces. House prices surged to new records from Auckland to Otago last month according to the September REINZ data out today. This was especially true in Hamilton and Tauranga where the median house price increased by more than $1000 a day in the month. To get a perspective of how out-of-range that is, just look at the Waikato-BOP tab in this chart. It's amazing. (You may think we have recorded it wrong, but we haven't.) Strong population growth and underlying momentum in the housing market will keep annual sales climbing through until mid-2016 before weaker economic conditions dampen demand, said one analyst.

MICROS LESS CONFIDENT
Confidence among small firms has fallen further, consistent with a slowing economy, but firms are still growing, according to ANZ’s quarterly Business Micro Scope survey of small businesses.

TOURISM STILL GROWING
National guest nights for August 2015 were +4.2% higher than in August 2014, Statistics New Zealand said today. For August 2015, compared with August 2014: North Island guest nights were up +3.6%, and South Island guest nights were up +5.0%. Domestic guest nights were up +5.0%, and international guest nights were up +2.6%. Ten of the 12 regional areas had guest night growth.

LOW BUT NOT BENIGN
ANZ's independent monthly Inflation Gauge posted a +0.1% increase in September. That’s a touch softer than the typical seasonal increase for this time of year. Prices rose in four groups, fell in one, and were unchanged in the remaining three. Higher prices for accommodation services were a notable standout. Prices from the Gauge rose +0.3% in the September quarter, with prices from the Underlying Ex-housing Gauge unchanged over this period. Both are subdued but still not as benign as they could have been given sizeable falls in vehicle licensing fees at the start of the quarter (which knocked 0.4 percentage points off the rise in the headline Gauge). ASB agrees.

DON'T NEED THE FUNDS?
Treasury has canceled its October 15 debt auction. Maybe that is a sign they have a surplus. We will know on Wednesday.

A FOURTH LICENSE
Wayne Croad's Lending Crowd becomes NZ's 4th licensed peer-to-peer lender and has said it will target SMEs, vehicle and personal lending via secured loans. Only one peer-to-peer platform is actually in business at the moment though and that is Harmoney.

NO MORE PRICE GAINS?
Today's dairy derivatives trading has seen some winding back on pricing, which is quite a turnaround from what this market has been indicating for the past six weeks.

WHOLESALE RATES
The 90-day bank bill rate is down -1 bp at 2.85% today, but swap rates are up yet again, this time however only by a tiny +1 bp across the curve, moved by changes in New York at the end of last week.

NZ DOLLAR
The Kiwi dollar has flat-lined today basically holding at 66.9 USc, holding against the Aussie at 91.3 AUc and 59 euro cents. The TWI-5 is still just marginally under 71. Check our real-time charts here.

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

Daily exchange rates

Select chart tabs

Source: RBNZ

Source: CoinDesk

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

4 Comments

by Henry_Tull | 12th Oct 15, 4:46pm 1444621591

Liquidity, The Accounting Cat by John Clarke
To the tune of Macavity, The Mystery Cat by T S Eliot

Liquidity’s a mystery; it’s very rarely seen,
It strikes and then is gone again, its getaway is clean,
And despite forensic evidence and great deductive flair,
The conclusion’s inescapable, Liquidity’s not there!

Liquidity, Liquidity, there’s nothing like liquidity,
Its presence gives you confidence, its absence gives timidity,
You own perhaps a property, you own perhaps a share,
But once you’ve lost your credit card, Liquidity’s not there!
Your understated opulence inheres in what you wear,
But in the end, you face the fact, Liquidity’s not there!

Liquidity’s a nifty term, it’s business talk for cash,
It’s money not tied up in things or hoovered in the crash,
Investments may return amounts of staggering obscenity,
The vastness of your holdings may explain your great serenity.
In publishing, to take the case of either of the Fabers,
A warehouse full of Larkin and The Bumper Book of Neighbours
Is very well, and when they sell, will satisfy the editors,
But not much use, in real terms, when dealing with the creditors.

Liquidity, Liquidity, there’s nothing like Liquidity,
The glint of actual duckets brings respect and dip the lid’ity,
It’s likely to self-immolate on contact with the air,
Say ‘Raffle’ in a crowded room; Liquidity’s not there!

In the conduct of a company (proprietary, limited)
There’s always a suspicion that the system’s maladministered,
In proper corporate planning you allow a little spare,
But when you need the wherewithal, Liquidity’s not there!

Liquidity, Liquidity, there’s nothing like Liquidity,
In purely economic terms it constitutes validity,
I wish I had a pound for every credit millionaire,
Who completely failed to register, LIQUIDITY WASN’T THERE!
When reputations tumble and the search is on for clues
(I might mention humpo-bumpo, I might mention drinkie-poos)
There’s a suspect who can prove he was in Lima at the time,
They can’t catch him, he’s the brilliant Scarlet Pimpernel of crime!

by Stephen Hulme | 12th Oct 15, 5:34pm 1444624462

Speaking of which;

Soaring London house prices are costing the economy more than £1bn a year and preventing the creation of thousands of jobs, as individuals plough money into buying and renting instead of spending their cash elsewhere, a report has claimed. Read more

by profile | 12th Oct 15, 9:26pm 1444638391

"The number of people living in extreme poverty around the world is likely to fall to under 10 percent of the global population in 2015, according to World Bank projections released today, giving fresh evidence that a quarter-century-long sustained reduction in poverty is moving the world closer to the historic goal of ending poverty by 2030."

by profile | 12th Oct 15, 9:34pm 1444638880

Thanks greenpeace et al for pushing up all our insurance premiums and enriching insurers (and greenpeace). Good one.

"Down Again: 2014 Catastrophe Losses Below Average Global natural disasters1 in 2014 combined to cause economic losses of USD 132 billion, 37 percent below the ten-year average of USD211 billion. The losses were attributed to 258 separate events, compared to the ten-year average of 260. The disasters caused insured losses of USD39 billion, 38 percent below the ten-year average of USD63 billion and was the lowest insured loss total since 2009. This was the second consecutive year with below normal catastrophe losses."

When will CAGW finally get here? I feel so sorry for the carbon tax carpet baggers.