A review of things you need to know before you go home on Tuesday; NZCU Baywide cuts TD rates, dairy futures sink, China growth sags, QSBO rises, tourism strong, swaps lower, NZD lower

A review of things you need to know before you go home on Tuesday; NZCU Baywide cuts TD rates, dairy futures sink, China growth sags, QSBO rises, tourism strong, swaps lower, NZD lower

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

TODAY'S MORTGAGE RATE CHANGES
No changes to report, so far.

TODAY'S DEPOSIT RATE CHANGES
NZCU Baywide reduced some TD rates today.

IT COULD BE UGLY
The signs are not good for tomorrow morning's dairy auction. Trading on the dairy futures market today points to a bigger fall than was indicated just a few days ago.

NOT AS BAD AS SOME FEARED
Growth in the Chinese economy was reported at +6.8% pa for Q4, marginally below analysts expectations. Chinese retail sales were up +11.1% pa in December, also marginally less than analysts forecasts. But these are still solid results and the NZD rose on the news as did the Shanghai stock indexes. However things turned more negative when it was realised that the +6.8% growth number is their lowest in 25 years. Even Shanghai stocks could not hold their gains.

'REFRESHINGLY UPBEAT'
The NZIER's Quarterly Survey of Business Opinion (QSBO) rebounded from four year lows in the December quarter. Businesses increased hiring and a few pushed through price increases. In fact, capacity utilisation rose to its second highest level on record. These results are consistent with Q4 GDP growth of +3% and confirm other similar surveys (eg ANZ's Truckometer). It also suggests we will have a solid start to 2016.

A SECTOR ON THE RISE
National guest nights for November 2015 were +4.6% higher than the same month a year ago, Statistics New Zealand said today. The South Island is leading the way in the tourism stakes, where the Otago region had the largest increase in guest nights, boosted mainly by Queenstown and Wanaka.

RBA SEEN CUTTING
Market contagion from China and low energy costs are expected to weigh on the Australian central bank, pushing it to cut its policy rate. According to interest rate futures pricing, the chances of a cash rate cut to 1.75% from the current 2% have jumped to a certainty this week, up from 50% late last year. And don't forget, Aussie headline CPI inflation was last reported as +1.5% pa. The RBNZ makes a rate decision in the final week of January.

WHOLESALE RATES DOWN AGAIN
Swap rates fell today by about -2 bps across most terms, but not the one year. But it is worth noting that the one year swap rate is now at a 3 year low. The 90 day bank bill rate is down -1 bp to 2.74%. (And a technical note for those who follow such things: we have rebased our CDS spread chart series to the updated iTraxx set.)

NZ DOLLAR HOLDS
The New Zealand dollar has held it lower levels today, dropping after the Chinese GDP data was released. It is now at 64.3 USc, unchanged against the Aussie at 93.8 AUc, and is down at 59 euro cents. The TWI-5 is now under 70. Check our real-time charts here.

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14 Comments

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And the Reserve Bank starts charging for information
http://www.stuff.co.nz/dominion-post/75943455/editorial-a-tax-on-officia...
So will all Govt departments start charging under the OI.A?
Is it also a form of suppression of information?
Is the Govt underfunding their organisations forcing them to look for more income earning ideas

12
up

That's a backward step for the freedoms and rights previously associated with democracy in this country.

Is the urban dictionary defintion of fascism apropos this development?

That has been going on for 20 years. Want the building standards? pay $600 I think it was.

LOL. The Chinese economy grew at 6.8%. LOL. Of course it did..........

The lies grew at 10%.....

DC, any news on Pengxin breaching it's debt covenant with ANZ?

Yes indeed.

In September the Government announced it had turned down an Overseas Investment Office application from Chinese company Shanghai Pengxin's subsidiary Pure 100 to buy Lochinver Station.

Maybe it was ANZ which refused an extension of extra funding rather than Paula Bennett weighing up the pros and cons in the national interest?

Here you go - http://www.interest.co.nz/rural-news/79589/shanghai-pengxins-dairy-farming-group-breaches-terms-anz-loan-posts-94-mln-annual

Iran to put 500,000 extra barrels onto a market already collapsing....

http://www.rigzone.com/news/oil_gas/a/142538/Iran_Orders_Oil_Output_Boos...

Estimates on the present over-supply are around 1.5mbpd, so a 1/3rd more again?

$20USD a barrel now seems very likely, will we see $15?

http://www.marketwatch.com/story/are-you-potential-fraud-bait-2016-01-15

Now the test??. There are no right or wrong answers. I am hedging my bets.?

Did you get "Pumped & Dumped'.

Did you get "Short Shrift on that IPO"?.

Did you get "Put it all on the House, we will give you a free Telly".?

Do you have a full "Recourse Mortgage, do you sweat at night about equity for ever and ever, plus have you a job for Life".?

Do you "Subscribe to 'Any Mortgage will do, Houses only go up mate, borrow to the hilt"?.

Did you get a "Dick Smith Christmas Present and do you want to buy a warranty with that, or even get an irredeemable gift card? .

"Do you believe in Interest Free Purchases?"

Do you know what QE. is?, NIRP is?, .PAYDAY loan?...etc etc.??

Do you believe in Fairies, since 2008?.

Or that the World is Fair and a Banker is your BFF...

And that "Potential Investment" sold by each and every Real Estate Agents means 'You take the risk" ,me ..."I would not touch it with a Barge Pole"??.

Just asking?.

Kunstler, never one to not amuse,

http://kunstler.com/clusterfuck-nation/worse-than-1860/

On Hillary Clinton, "She comes off the shelf like a defective product that never should have made it through quality control. Nobody really likes her. Nobody trusts her."

couldn't agree more.

Fund managers bet on failure?

http://www.bloomberg.com/news/articles/2016-01-17/commodity-collapse-has...

It just seems like shooting yourself in the foot!

its interesting how cheap credit is working against the commodity markets correcting themselves, the least efficient producers should be falling over to reduce supply but it is just not happening in fact the opposite has happened where supply has increased to maintain servicing of debt