What happened Tuesday

A review of things you need to know before you go home on Tuesday; NZ Home Loans cuts too, milk flow rises, where the jobs will be, director pay trends, Aussies retiring later, swaps and NZD up modestly

29th Mar 16, 4:02pm by David Chaston

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

TODAY'S MORTGAGE RATE CHANGES
NZ Home Loans cut fixed rates to the same levels as their owner Kiwibank.

TODAY'S DEPOSIT RATE CHANGES
There are no changes to report.

STILL PUMPING IT OUT
The latest milk production data from DCANZ shows that volume rose in February year-on-year for the first time since August 2015. 1.966 mln tonnes of milk was produced in February, up +5.6% from the same month a year ago, and almost equal to the all-time record February production in 2014 (1.973 mln tonnes).

148,000 MORE JOBS
The latest employment forecast from the Ministry of Business Innovation and Employment predicts the number of jobs in New Zealand will grow by another 148,300 over the next three years. Most of the demand will be for for high skills (57%), much of it in the main centres, especially Auckland (40%). Invest in your training to stay employed in New Zealand.

BOARD PAY TRENDS
Pay for Non-Executive Chairs now averages $71,700 and for Non-Executive Directors $36,200, a rise from a median pay rate of $70,000 and $35,670 in 2015 and $62,606 and $35,000 in 2001 respectively. This represents a +14% increase for chairs in the last 5 years. The highest fees were paid to boards of companies within primary industries and the lowest to not-for-profit organisations. This is the 24th consecutive annual survey by Strategic Pay. Their survey was completed in February and includes responses from 2,226 board members from 356 organisations across the country. (Non-exec board appointments are part-time work, but carry substantial obligation and liability for decision-making.)

70 IS THE NEW 65
Australians aged 45 years and over are intending to work longer than ever before, according to figures released by the Australian Bureau of Statistics today. The survey found that 23% of the people aged 45 years and over are intending to retire at the age of 70 years or over compared with only 8% in 2004-05. Men are the ones planning to work on; over a quarter of males 45 years and over plan to work past age 70.

NZ STANDS OUT
The NZX is a real outlier today in the world of equities trading. The NZX50 is up +0.36%, whereas almost all other bourses are lower; Shanghai is down -0.24%, Tokyo down -0.21%, and the ASX is down -0.86%. The Aussie decline has been accentuated by investors dumping bank stocks. Hong Kong and Singapore however are only lower a fraction, while Wall Street (S&P500) was up a tiny +0.05%.

WHOLESALE RATES TIP HIGHER
The local rate curve marginally steepened today. Rates are up +1 bp at the 1 year term, up +2 bps for all terms 3 years and longer. NZ swap rates are here and they are at or near their all-time lows. The 90-day bank bill rate also rose, up +2 bps to 2.35%.

NZ DOLLAR SIDEWAYS
Markets bid the NZ dollar up today in a similar modest shift but in light volumes. It is now at 67.4 USc, at 89.2 AUc and 60.2 euro cents. The TWI-5 is up to 71.1. Check our real-time charts here.

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

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

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7 Comments

by Stephen Hulme | 29th Mar 16, 4:28pm 1459222136

The Aussie decline has been accentuated by investors dumping bank stocks.

Silly not to.

Here at home, the Securities Broker/Dealers (XBD) sank 3.1% this week, increasing y-t-d losses to 10.8%. The Banks (BKX) dropped 1.6%, with a 2016 decline of 11.3%. And while Chinese stocks mustered a small advance for the week, the Hang Sang Financial Index declined 1.1% (down 11.7% y-t-d). I have posited that a vulnerable Europe resides “at the margin” of the faltering global Bubble. With this in mind, European financial stocks deserve close attention. This week saw the STOXX Europe 600 Banks Index slammed 4.9%, increasing y-t-d losses to 19.8%. Italian banks were hit 3.8% (down 29% y-t-d). Read more

There’s no better way to think of this than as a system which uses the dilution of its lowest-order and freshest creditors (a.k.a depositors)/equity holders for the purpose of funding its risk-taking activities.

Put even more simply: before the new regulatory regime was instituted, assets were financed through the creation of additional subordinated claims on the bank’s overall capital base on the expectation that these assets would outperform in the long run, boosting the capital base for everyone. If the assets didn’t perform, the lowest creditor class would get hit disproportionately instead. Read more

Now you know what the RBNZ thinks of it's duty towards the wellbeing of NZ bank depositors.

by Henry_Tull | 29th Mar 16, 4:46pm 1459223208

Whats that in the loan book?

A Sydney lawyer has alleged 7-Eleven employed a de facto policy of ethnically screening its franchisees and, with ANZ, luring them with "easy" loans they could not repay.

http://m.smh.com.au/business/retail/7eleven-ethnically-selected-franchi…

by dictator | 29th Mar 16, 5:19pm 1459225189

Sub-prime 7-11s? Makes me wonder what else is in the ANZ loan book that is sub-prime.

by J.C. | 29th Mar 16, 8:10pm 1459235402

Not a week passes without an expose of the appalling ethics of Aussie banks.

by two otherguys | 29th Mar 16, 5:43pm 1459226621

That's only part of it - what went before is scandalous

If you want a taste of the full scope of the many headed hydra watch this 4-corners investigation into the sophisticated scam using Indian students to staff these stores - it's been a multi-billion winner for the franchisor - using blackmail for residency - this is an investigation of what's happening in NZ but never discussed and certainly never investigated (restaurants) - so the best we can offer you is the AU investigation - coz you'll never see it exposed here

http://www.abc.net.au/4corners/stories/2015/08/30/4301164.htm

7-Eleven is the business built for our convenience: selling the staples of life like milk, bread and phone cards, 24 hours a day, seven days a week. With more than 600 stores around Australia, they serve around six customers every second and generate more than $3 billion in sales.

"Welcome to a world of opportunity, brought to you by 7-Eleven, the brand that's world famous." 7-Eleven marketing

Thousands of people around the country are employed in 7-Eleven stores, run by franchisees.

But as this joint Four Corners/Fairfax investigation reveals, it's a business model that relies on the exploitation of its workforce.

"They can't run 7-Eleven as profitably and successfully as they have without letting this happen. The reality is it's built on something not much different from slavery." 7-Eleven insider

by murray86 | 30th Mar 16, 7:12am 1459275142

"They can't run 7-Eleven as profitably and successfully as they have without letting this happen. The reality is it's built on something not much different from slavery." 7-Eleven insiderFree market economics at work!

by Plutocracy | 30th Mar 16, 7:24am 1459275867

The latest employment forecast from the Ministry of Business Innovation and Employment predicts the number of jobs in New Zealand will grow by another 148,300 over the next three years. Most of the demand will be for high skills (57%)

Oh, you mean like chefs, dairy farm workers and aged care workers?