A review of things you need to know before you go home on Friday; Businesses 'joyful', builders go back to school, dairy farm prices fall, Aussie govt beats Philip Morris, Super Fund returns 1.05%, molybdenum & more

A review of things you need to know before you go home on Friday; Businesses 'joyful', builders go back to school, dairy farm prices fall, Aussie govt beats Philip Morris, Super Fund returns 1.05%, molybdenum & more

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

TODAY'S MORTGAGE RATE CHANGES
There were no changes today.

TODAY'S DEPOSIT RATE CHANGES
First Credit Union cut its three, six, nine and 12 month term deposit rates by 20, 40, 40 and 40 basis points, respectively, to 3.40%, 3.60%, 3.70%, and 3.80%. See all carded, or advertised, term deposit rates for one to nine months here. And see all carded, or advertised, term deposit rates for one to five years here.

BUSINESSES 'IN A JOYFUL MOOD'
ANZ's latest Business Confidence Surveyputs confidence at an eight-month high. A net 23% of businesses are optimistic about the general economy over the year ahead, the highest reading since April, according to ANZ's economists. All the five sub sectors, retail, manufacturing, agriculture, construction and services, are positive. Pricing gauges remain subdued with inflation expectations at 1.6%, and pricing intentions up just two points to +24. ANZ's composite growth indicator, combining sentiment measures from both business and consumers, is flagging the potential for GDP growth above 3%. However, ANZ's economists saw they're more circumspect than this, predicting growth between 2.5% and 3%.

NZ SUPER FUND RETURNED 1.05% IN NOVEMBER
The value of the New Zealand Superannuation Fund stood a shade under $30 billion at the end of November, according to the Fund's latest monthly performance report, after returning 1.05% during November. Over the 12 months to November it returned 8.34%, and since inception in 2003 the NZ Super Fund has done 9.83% per annum.

SUPER FUND INVESTS IN AUCKLAND HOUSING
Meanwhile, the NZ Super Fund unveiled plans to invest directly in Auckland housing for the first time. It's partnering with Ngāi Tahu Property Limited and private equity fund New Ground Capital, and investing in a $113 million housing development at Hobsonville Point.

DAIRY FARM PRICES FALL
Dairy farm prices have fallen 22.5% in just one year, according to the Real Estate Institute of New Zealand Dairy Farm Price Index. There has also been a 39% decline in the number of dairy farm sales, with 42 selling in the three months to November compared to 69 sales in the same period last year, the REINZ said.

HARMONEY LENDING TOPS $170M
Peer-to-peer lender Harmoney, which counts Heartland Bank and institutional investors among its funders, says it has now facilitated more than $170 million of lending. Of this about 45% of loans have been for debt consolidation, 10% for home improvements, 8% travel, 6% used vehicles, and 32% "other", including boats, weddings and household purchases. Harmoney, which launched in September 2014, says it has now attracted more than 10,000 investors. In November 345 new investors joined, plus 1,214 borrowers.

SCHOOL'S NOT OUT FOR BUILDERS
Associate Education Minister Nikki Kaye says 23 building projects with a combined total value of $785 million are underway at New Zealand schools these summer holidays. Kaye says about 100 projects valued over $3 million each are on the go including redevelopments, plus new schools in Rolleston and Queenstown.

AUSSIE GOVERNMENT BEATS PHILIP MORRIS
Australia's federal government has won a court case against tobacco company Philip Morris Asia, which had challenged Australia's tobacco plain-packaging laws. The decision, from a Singapore-based tribunal, means Australia's plain-packaging laws introduced in 2011 will stay in place, Fairfax reports.

CHINA MNI RISES
The MNI China Business Sentiment Indicator, a gauge of current business sentiment, rose 5.6% to 52.7 in December from 49.9 in November, pushing above the 50 mark that separates expansion from contraction. According to the Indicator, a modest recovery in overall business confidence masked a pullback in activity in December with China’s biggest companies continuing to grapple with lower demand and an uncertain business environment. Companies don't anticipate a significant improvement in early 2016 with the Future Expectations Indicator remaining close to last month’s series low.

THE YEAR'S WORST PERFORMING COMMODITY
In a bad year for commodity prices Bloomberg says something called molybdenum, apparently it's a metal used in steel building materials and to help strengthen drills used to extract underground oil and natural gas, performed the worst of all. Prices slumped 49%, the most of 79 raw materials tracked by Bloomberg. And surprise, surprise, the price of molybdenum was hit by the slowdown in China.

RBNZ STOCKTAKE CONCLUSIONS REACHED
The Reserve Bank has published the conclusions of its stocktake of bank and non-bank deposit taker prudential regulations, announcing this via a press release sent out at 4.35pm on the Friday before Christmas. Details are here.

WHOLESALE INTEREST RATES
NZ swap rates followed their US counterparts down. The long end of the swap curve gave back all the gains from yesterday after the Federal Reserve rate hike announcement. The short end of the curve is having a bit of a breather having risen strongly following last week's Reserve Bank Official Cash Rate cut. The 90-day bank bill rate bucked the trend, rising one basis point to 2.76%.

OSCILLATING KIWI DOLLAR
The NZ dollar opened the day sharply lower against the greenback off the back of broad based US dollar strength. After consolidating at lower levels for much of the morning the Kiwi oscillated in quite a tight range during the afternoon. With the Fed tightening conditions it's expected that commodity based currencies, such as the NZ dollar, will be weaker against the US dollar in the near term. The NZ dollar currently sits at US67 cents, AU93.94c, and the Trade Weighted Index (TWI 5) is at 72.6. Check our real-time charts here.

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12 Comments

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So wise to suspend contributions to the super fund for decades. Gen XYZ are so happy to instead pay massive taxes later in life to fund the boomers retirement and healthcare needs.

Agree, short-sighted... maybe we should also look at stopping the politicians pension? They can fund their own retirement like the rest of us (its not like they are on the average wage)

especially at the best buying time for decades and with the lowest borrowing cost.
the borrowing would have been paid back many times over with the tax collected, what have national got against setting NZ up for the future, they only seem to be able to look max 3 years ahead, oops silly me election time

Your first sentence "there were no mortgage interest rate changes today" was incorrect. ASB and Sovereign announced increases to their 3, 4 and 5 year fixed rates, including their special rates. ASB and Sovereign’s leading 3 year Special fixed rate of 4.49% has now increased to 4.75% and their Special 5 year fixed rate is now 5.25%.
Dirty bankers have boosted rates despite swap rates reducing - what a con job!

Cheers bigblue, we have the ASB hikes here now - http://www.interest.co.nz/news/79244/asb-responds-higher-wholesale-money-costs-raising-3-4-and-5-year-fixed-mortgage-rates

Bigblue - swap rates are up 14-17bps since the RBNZ OCR cut ?

On the day of the OCR cut the 1 year swap rate was 2.68 then it increased to a peak of 2.77 by the 17th of December - an increase of 0.09. It has since dropped to 2.74 yesterday or up by 0.06 compared with the day of the OCR cut and looking like going back to the record low of 2.66 however the greedy Aussie bankers have increased all their rates!

The three year swap is only up 0.1 since the OCR cut yet the greedy bankers yesterday increased their 3 year rates by 0.24 - Merry Christmas!

So the "swaps falling" as a uninformed incorrect guess so that you could slag someone ? And who in their right mind fixes 1yr at the bottom of the cycle unless they're planning to sell, that's floating ? With the Fed hike obvious for 2 months 3-5yrs are predictable up around 15bps since the OCR and expect more in the NY especially with banks cosy of capital rising negatively impacting margins

Well bearing in mind your models didnt see further drops if I recall correctly? So really that depends on whether you think the cycle has bottomed yet or if there will be significant rises and within a year. From what I can see rises for NZ is 18months away (from the RB's own forecast?) so fixing if it saves you a bit might not be a bad plan. I also wouldn't say from the data the Fed's rise was obvious, from the human factor yes sure Yellen wanted to rise come hell or high water. Such an action of course didnt work for other RBs including our own 2 years down the rack.

So lets indeed look longer term at rises.

a) The world's commodities are going down past cost of production as the main importers slash purchasing/production. That points to the miners being devastated and some ceasing to exist. So raising rates will do what here?

b) To back that up, the BDI is 470 odd, the lowest it has been and considering the highs were 11000 odd that and the above looks a little like a blood bath to me.

c) Debt overhang is as big as the Great Depression if not bigger. So raising rates will do what here?

d) What is there really showing the economy really is doing well?

c) Debt overhang is as big as the Great Depression if not bigger. So raising rates will do what here?

Stop the gamblers using other people's money with little exposure risk to themselves. Lower rates are not containing the animal spirits.

Mo an issue on greywacke based soils since 1950s.