A review of things you need to know before you go home on Friday; building consent levels underwhelm, real estate agents inefficient, business confidence rises, NZGBs in hot demand, mortgage puzzle, money supply distorted

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

TODAY'S MORTGAGE RATE CHANGES
No rate changes to report today.

TODAY'S DEPOSIT RATE CHANGES
No changes here either. Update: F&P Finance has cut almost all its savings and term deposit rates by between -5 and -40 bps with a flattening bias.

UNDER ACHIEVING I
New residential dwelling consent levels were down in March on a national basis. It was worse in Auckland because they are still woefully short of what is needed in that city.

UNDER ACHIEVING II
There are now 14,975 registered real estate agents and offices in New Zealand, 6,894 (or 46%) of them are in Auckland. But only 35% of the houses that sold were in the City of Sails in the year to March 2016. On average an Auckland real estate agent sells less than 5 properties per year, dragging down the national average which is at 6.5 properties per year. That national average is going up while the Auckland one is going down. This data could either show Auckland agents are less productive than everywhere else, or it could just show that the well-publicised lack of listings is causing agent stress in Auckland. Makes you wonder why there has been virtually no effort on the part of agents to become buyers agents, rather than the traditional sellers agent. (This data is from the REAA.)

UNDER ACHIEVING III
The fall of in office leasing demand in Christchurch is having a big impact in the level of consenting new commercial buildings in the Garden City. And it is taking the wind out of the national non-residential building consent levels. The value of consents for office space dropped -23% from a year earlier. That's big, even if last year did include a rush of Christchurch earthquake replacement buildings. However, remember, there is still a humongous backlog of projects in Auckland, many of which still require consents.

GETTING ON WITH IT
The ANZ Business confidence survey lifted a touch in April, though the level remains low. The broader survey continues to point to solid economic momentum of around +3% growth. Pricing gauges remain low. Firms’ own activity expectations lifted from an index score of +29 to +32. The historical average is +27. That’s an economy with some backbone, notes ANZ. The construction sector is the star performer these days but even agriculture popped into positive territory. (But don't tell our commenters, who seem to be a perpetually negative lot. There are exceptions of course.)

YIELD CHASERS GET SERIOUS
There was $150 mln of NZGB 2033s on offer today and they received bids for $612 mln worth, a 3 times over subscription by 57 bidders. That demand saw only 13 of them win anything and they accepted just 3.165% as the yield. That is -20 bps lower than for the equivalent March tender.

HEAD SCRATCHER I
The latest mortgage book data out today from the RBNZ (S8) featues some curious stuff. The level of mortgages that can be influenced by an RBNZ rate hike (floating plus fixed-rate mortgages that will roll over with the next 12 months or less) now exceeds $130 bln. That is the highest level it has been since April 2014 and is now more than 60% of all mortgages. Even more curious is a +$771 mln jump from February in the level of floating rate mortgages to $51.4 bln. For 45 of the past 47 months the level of floating mortgages has been declining, almost halving over that period. Why it should jump in March baffles me. Any ideas?

HEAD SCRATCHER II
If our economy is growing roughly +/-3% per year and inflation is +/-1% per year, growth in nominal terms of all economic activity is roughly +/-4% per year. So why does our money supply grow at twice that rate (for M3) and has done for the past five years? And notes and coin values in circulation (M0) is growing even faster. I can't get my head around that as I am sure I am like most people and use cash much, much less these days. Is the illegal economy really growing that fast? M2, which is currency plus at-call bank accounts are growing the fastest at over +12%. That is consistent with the rapid growth of household bank accounts which broke through the $150 bln level for the first time ever to $151.1 bln as at the end of March. At the end of the chain of buying-and-selling houses, those who quit the housing musical chairs are pocketing huge amounts and parking them in bank accounts. Obviously the money supply can't grow endlessly faster than our economy. There will be a day of reckoning.

WHOLESALE RATES UNCHANGED
Rates at the long end rose by +1 bp but all other rates held steady. This was despite a sharp fall in benchmark rates on Wall Street earlier today. NZ swap rates are here. The 90-day bank bill rate rose by +1 bp to 2.40%.

NZ DOLLAR RISES
Following the OCR decision yesterday and a weaker than expected US Q1 GDP estimate, the Kiwi dollar has kept rising even if it is only a minor rise from this time yesterday. The NZD is now at 69.9 USc, at 91.4 AUc and 61.3 euro cents. The TWI-5 is at 72.5. Check our real-time charts here.

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