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A review of things you need to know before you go home on Wednesday; no food price changes, hot housing debt demand, Aussies worried, Auckland wins at box office, swap rates rise, NZD highest in 10 months

A review of things you need to know before you go home on Wednesday; no food price changes, hot housing debt demand, Aussies worried, Auckland wins at box office, swap rates rise, NZD highest in 10 months

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

TODAY'S MORTGAGE RATE CHANGES
There are no rate changes to report today for borrowers.

TODAY'S DEPOSIT RATE CHANGES
No rate changes here either.

NO CHANGE
Despite what you might have read elsewhere, food prices in March were actually lower than the same time a year ago, down a minuscule -0.1%. This was influenced by a -2.7% drop in grocery food prices, driven by lower prices for fresh milk (down -9%), cakes and biscuits (down -7.7%), and yogurt (down -13%). Fruit and vegetable prices increased +3.6%, with higher prices for avocados, lettuce, tomatoes, cauliflower, and broccoli. These were partly offset by price decreases for kumara and carrots. Restaurant meals and ready-to-eat food prices rose almost +2%. Other media tended to focus on the changes from February (it was cauliflowers day in the sun), but that is influenced by very seasonal factors.

BANKER HEAVEN (BORROWER HELL)
Here is some data that may do some way to answering why banks are not rushing to cut fixed mortgage rates: they don't need to because demand is so high for this debt. The latest home loan approval data shows that for the first 15 weeks of 2016, the number of new loans applied for is +3.8% higher than the same period last year. But in value terms it is +12.7% higher. There is enough for every banker here. Taking on more mortgage debt is an activity with a complete disconnect to the growth in our real economy.

CONSUMER CONCERNS IN AU
The Westpac Melbourne Institute Index of Consumer Sentiment fell by -4.0% in April from 99.1 in March to 95.1 in April.

CHINA TRADE IMPROVES
China's March trade balance
came at +194.6 bln CNY (+US$29.9 bln) vs expected +203.7 bln CYN and a February balance of +209.5 bln CYN. Exports were up +19% year-on-year (in yuan terms) vs +15% expected and -21% in February. Imports were down -1.7% year-on-year (in yuan terms) vs -4.8% expected and -8% last month. Overall this was a better result for countries that trade with China and as such it has boosted both the AUD and NZD.

STARRING ROLE
Film production revenue in Wellington fell -15% in 2015, Statistics New Zealand said today. In contrast, television program production in Auckland rose +$150 mln or +9% on the previous year. Overall, New Zealand’s screen industry had total revenue of $3.22 billion in 2015, up +2% from 2014.

ACTING LOCAL
Local Government New Zealand (LGNZ) has announced it'll develop a new climate change position statement focusing on important mitigation and adaptation strategies. The LGNZ Climate Change Position Statement will be released in the middle of the year and will detail key actions and policy changes to manage the effects of climate change. It will also outline next steps for local government and sector partners to manage climate change in communities around the country.

WHOLESALE RATES RISE
Rates for every wholesale term rose again today. For terms to 2 years they are up +3 bps; for longer terms they are up +4 bps. NZ swap rates are here. The 90-day bank bill rate also rose by +2 bps to 2.36%.

NZ DOLLAR RISES TOO
The NZD rose again today and against the USD it is at its highest since June 2015. It is now at 69.4 USc, at 90.2 AUc and 61.1 euro cents. The TWI-5 is now at 72.2. Check our real-time charts here.

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11 Comments

And readers of the Daily Telegraph in London voted New Zealand the best country in the world... for the fourth time in a row :)
So there... doom, gloom and despondency mob.

LOL - they obviously don't know any better and need to get out more.

i notice it was new zealand and not auckland, i sure those that voted and visited only passed through auckland and spent their time seeing the rest of our beautiful country especially the south island
http://www.telegraph.co.uk/travel/destinations/oceania/new-zealand/galle...

Yes let's keep it that way to. Maybe dial back immigration, make housing affordable by removing the tax bias and benefit payments to landlords, start funding DOC properly, clean up,our rivers and reverse the trend, reduce the impact of dairying, stop flicking off our land to foreigners.....and above all, stop sucking our young people dry.

"BANKER HEAVEN (BORROWER HELL)" Great line DC.

Time to revisit the RBNZ 4.5% neutral interest rate concept? CPI inflation be damned. Read more

4.5% neutral. What a joke. Shows how disconnected from reality the RB is or was recently.
Maybe minus 4.5! That might be closer.

Shows how disconnected from reality the RB is or was recently.

Still disconnected, given runaway debt financed residential property price inflation - where's the documented exit strategy? Probably still looking for the envelope for someone else to write it down.

I'm loving the cheaper food prices. Surely that will lead to higher pay for workers and an increased ability to service debt, along with higher dividends for investors. That's how deflation works right?

The indebted housing stock "owners" are starting to realise they need a hefty interest rate funded pension to pay off what they thought was going to be the pension. Monetary financialisation is not proving to be the panacea imagined. Read more and more

Some are beginning to panic, but offer little in the way of corrective solutions other than more financial stimulus to follow that which hasn't worked yet. Read more and more

I was talking with an Australian on one forum and apparently 35 year mortgages are quite common. I bought my own house recently and have just changed half of the amount to a 15 year mortgage. Having mortgage payments past retirement is a bad idea. However a lot of people are moving up the property ladder, buying more house than they need and reset their mortgage term to 30 years, this is really bad.

I've noticed there are a number of people close to retirement or heading into retirement getting 5 year P2P loans. I think there is going to be a lot of people having a difficult retirement from right now. Diminished income from interest and fixed payments for debts is a really bad mix.

If they are going to persist with stimulus it needs to go directly to people instead of money hoarders.

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