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A review of things you need to know before you go home on Monday; BNZ and Kiwibank cut rates, Auckland tourism booms, China food prices zoom, swap rates stable, NZD still in range

A review of things you need to know before you go home on Monday; BNZ and Kiwibank cut rates, Auckland tourism booms, China food prices zoom, swap rates stable, NZD still in range

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

TODAY'S MORTGAGE RATE CHANGES
BNZ cut its 2 year fixed rate today from 4.39% to 4.29%. But that is still not market-leading as Kiwibank offers a 4.25% rate for that fixed term.

TODAY'S DEPOSIT RATE CHANGES
Kiwibank cut its TD rates today. It cut its 1 month rate is now 1.25% (down from 1.75%). And it cut all rates for terms two years and longer by -10 to -15 bps.

WE ARE STILL SPENDING FREELY
Retail spending using cards rose in March. We spent $5.0 bln in March 2016, up +$287 mln (+6.2%) from March 2015, Statistics New Zealand said today. The largest increases were from the hospitality and consumables industries they ;said. The only decrease came from the fuel industry.

A HOT SUMMER
Auckland is getting its share of visitors. A record number flocked to Auckland this summer with more than 824,000 international arrivals into the region between December 2015 and February 2016 - up +10.7% on the previous summer. Holiday visitor arrivals were up +15.2% to 425,664 from 369,408 compared to the same period last summer. Double-digit growth among Chinese holidaymakers saw 85,616 arrivals into Auckland, up +16.9%. Auckland is also continuing to prove a popular destination for Australian holidaymakers with 87,952 arrivals (up +5.9%).

CHINA FOOD PRICES SURPRISE
Chinese consumer inflation
held at +2.3% year-on-year in March, and unchanged from the rate in February. But eyes will be drawn to the +7.6% rise in food prices nested within the overall data, which is an unexpected jump. On the other hand, producer prices fell -4.3% year-on-year - but that is its slowest fall in a long time. Month-on-month China's producer prices rose +0.5%, their fastest climb in over two years.

RATING CUT
Standard & Poor's today said it has lowered its financial strength and issuer credit ratings on Manchester Unity Friendly Society to 'B+' from 'BB-'. The outlook is negative.

WHOLESALE RATES HOLD
Rates for every wholesale term rose today by +1 bp. NZ swap rates are here. The 90-day bank bill rate also rose by +1 bp to 2.33%.

NZ DOLLAR STILL STUCK
In a sleepy currency market today, the Kiwi dollar rose marginally. It is now at 68.2 USc, at 90.1 AUc and 59.7 euro cents. The TWI-5 is rangebound at 71.1. Check our real-time charts here.

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23 Comments

I have just had an interesting conversation. Apparently 4 central Auckland $1m+ property deals have fallen apart including one for $10m where a deposit for $1m had already been paid. Ouch.
Apparently all the buyers were from Overseas.

Hmmmm - Chinese appetite for property in Australia shows no sign of waning after buyers doubled investment in the nation’s homes and offices for a second straight year.

Spending on Australian residential and commercial real estate rose to A$24.3 billion ($18.4 billion) in the 12 months through June 2015, up from A$12.4 billion a year earlier and A$5.9 billion in 2013, according to the Foreign Investment Review Board’s annual report. Read more

I guess the RBNZ was under instruction to further extend the welcome here.

....to June 2015. That's 9 months ago - a lot has changed since then. While historically interesting does not necessarily say anything about the present or the future.

Bloomberg also reported today that banks are looking at increased bad debt provisions due to mining company loan performance. While this may not result in the collapse of the Australian banks - it may make them more risk adverse and revise to whom they lend and at what interest rate. Additionally there was an interesting comment about the mining boom ending five years ago but the loan performance problems are only now appearing. The lesson from this is that company's / individuals may may be able to shuffle money around due to low interest rates but eventually the chickens come home to roost. On our side of the Tasman the problems for the New Zealand dairy industry may take several years to appear.

... in Vancouver and if you read the comments - one reader notes (with links) that other other markets are falling. I could find any number of links to support my position as you to support yours. It's called confirmation bias.

I prefer to deal in facts as much as possible - it's called evidence based management. A bit difficult because there is a lack of good information in New Zealand. The US is much better.

You might think me cynical but.....I only expect Vancouver property prices to drop once greater money laundering rules come in. In British Columbia they have light touch regulation where there is no onus on lawyers to report suspicious transactions.
http://www.dailymail.co.uk/wires/reuters/article-3530660/Canada-watchdog...

I prefer to deal in facts as much as possible - it's called evidence based management.

Good to know. I will try harder to live by my wits.

reports of demise a little premature. I assume its lots of money leaving China looking for somewhere to hide.

True .... but the statistic is only up till June 2015 - 9 months ago.

Bloomberg also reported today that banks are looking at increased bad debt provisions due to mining company loan performance. While this may not result in the collapse of the Australian banks - it may make them more risk adverse and revise to whom they lend and at what interest rate.

Yes, I felt the same and pulled my funding from a large Aussie bank in NZ last June.

Why did they fall apart? And by "overseas" you mean China right?

Not sure on all of them but basically they had the deadline dates to pay deposit or complete and the money didn't arrive.
Whether they were MF clients or not I don't know. I suspect it is due to blind panic in the banks and the lawyers offices in town where they have suddenly tightened procedures due to the events of the last week and they have refused to release funds until more checks are done.

Pure speculation on my part but intriguing all the same.

Let's hope more leaks happen, this can do nothing but help the everyday average person.

I agree. There is plenty more info to come out over the coming weeks on the content of the PP. When speaking to a senior guy in finance at the weekend he said the Governments would end up blaming the banks for poor governance on money laundering and they would be subject to massive investigations(as they had with LIBOR and FX) and would then have huge fines. HSBC has already been fined $1.8bn in the US. ANZ are also in the press for the wrong reasons at the moment.

Hey, way to keep your depositors KB!

Whatever happened to the monthly warnings from bank economists ""Interest rates are about to rise, hurry up and fix your mortgage".
Oh, that's right, the new tactic is to hold floating rates so high that borrowers are forced to fix against a continuing falling interest rate environment.

I would hope the banks have sacked them for being so incompetent

I don't know what has triggered that move but it's clear someone knows something important.

Saudi Arabia has a gigantic budget deficit with the drop in oil price. If spending is being cut heavily there will be defaults on loans and on a very large scale.

Our banks are embroiled in another money laundering scandal...

http://www.theaustralian.com.au/business/financial-services/malaysia-sca...

The only thing that interests me is the increase in spending on cards. There's still no sense of panic.

"A global search for Morrison's replacement was underway and "some interesting parties" had already made contact, Moller said. He suggested some candidates could apply as a result of the anti-corruption crackdown in Macau"

Clearly the word is out.....interested in a career in corruption...head to NZ and join a successful monopolistic money laundering operation..

http://www.stuff.co.nz/business/industries/78784783/media-banned-as-skyc...

Days to the General Election: 26
See Party Policies here. Party Lists here.