A review of things you need to know before you go home on Wednesday; Surplus surprises, a not-so mighty fraud, TSB's rates on the move, commerical property on the move, swap rates up, NZD rises

A review of things you need to know before you go home on Wednesday; Surplus surprises, a not-so mighty fraud, TSB's rates on the move, commerical property on the move, swap rates up, NZD rises

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

TODAY'S MORTGAGE RATE CHANGES
TSB Bank made a number of changes. It tweaked some of its special offers by between 10bps and 20bps lower, while adding a new 4-year special at 4.89%. It also tweaked its carded rates by between 10bps and 26bps lower, though didn't change the 6-month rate.

The Co-operative Bank dropped its 6-month rate by 49bps to 4.5% and the 2-year by 10ps to 4.25%.

TODAY'S DEPOSIT RATE CHANGES
No changes today.

SURPRISINGLY STRONG APRIL TRADE SURPLUS
The trade surplus for April came in at $292 million, quite a bit better than the average $25 million picked by the market. Statistics New Zealand said that goods exports rose 4% ($166 million) to $4.3 billion. A $59 million (16%) rise in fruit exports, led by kiwifruit and apples, helped offset a similar fall in dairy values. Among other export commodities, untreated logs, foodstuffs such as dietary supplements and savoury fillings, and beef and lamb all rose in value this month.

HOME DETENTION FOR PAIR WHO DEFRAUDED MIGHTY RIVER POWER
A pair who committed fraud against one of New Zealand's largest power companies have been sentenced in the Auckland High Court today. Paul Kenneth Rose and Jane Clare Rose were found guilty in March this year of Crimes Act charges of ‘Obtaining by deception' following a Serious Fraud Office prosecution. The victim, Mighty River Power Limited, had undertaken an internal investigation in November 2012 before the matter was referred to the SFO.

COMMERCIAL PROPERTY ON THE GO
It is not just the residential property market that is booming, commercial real estate agencies are also posting some spectacular growth. Colliers International, CBRE and JLL have all released their accounts for the year to December 2015 and all show substantial growth in revenue.

NEVER MIND THE YIELD
And in further evidence of the heating commercial property sector, Colliers says it has sold a retail property in Auckland's Mount Eden for a record low yield of 2.96%. The 134 sqm Auckland property operating as a café/restaurant at 409 Mt Eden Road, Mt Eden has been sold for $1,520,000 by Tony Allsop and Jonathan Lynch.

SWAP RATES RISE
Interest rates limped higher ahead of tomorrow's Budget. NZ swap rates are here. The short and long end of the curve were up 2bps while the middle only rose a single point. The rise partially offset yesterday's fall. There was very little reaction to this morning's trade data. The 90-day bank bill rate is currently 2.4% (unchanged on the day).

NZ DOLLAR HIGHER
The Kiwi dollar traded in a tight range against most of the majors during early trading. The exception was against the GBP where the easing of Brexit fears saw the NZD/GBP sold off sharply. There was some excitement on the release of a better than expected Trade Balance ($292 mln vs $25mln expected) and the NZD/USD rose before hitting stiff resistance late morning. Afternoon trading saw the NZD sold off back down back to the pre Trade Balance point. By mid afternoon the NZD/USD had bounced back to 67.6c and almost back to the peak we saw mid morning. Against the Aussie it was 93.9c and on the TWI it was 71.65. Check our real-time charts here.

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

Daily exchange rates

Select chart tabs »

The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
End of day UTC
Source: CoinDesk

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

11 Comments

Has Interest.co.nz covered this speech?

https://croakingcassandra.files.wordpress.com/2016/05/fabian-society-spe...

It is pretty powerful stuff from former RB Michael Reddell

There are some odd features of our underperformance. I think they help point us towards the answers. One of them is that we’ve had consistently the highest real interest rates in the OECD, and a real exchange rate that has never sustainably fallen (as one might have expected) even as we’ve
slipped ever further behind our peers.

Well we are certainly rewarding the foreigners that own around 70% of our government coupon stock with second to one global returns since our nominal interest rates have fallen over the last two years. Read more

As as one would guess the bank carnival barkers just cannot see them low enough, hence expect more exported wealth transfer flows from NZ taxpayers to others.

We continue to take our place in the global order as a high interest rate, high dollar, food commodity economy.

Inevitable given the weight of IOU necklaces suffocating the not yet dead within our communities.

Wonder if that bloke will blag his way out of this one..

'Country to avoid'

Nor is Been alone in his view. London-based fixed-income specialist Stratton Street recently placed Australia in a list of mainly emerging market countries whose reliance on foreign finance was making them particularly vulnerable.

The rogues gallery also includes Poland, Indonesia, New Zealand, Turkey, Brazil, Romania, Ukraine, South Africa and Hungary.

http://m.smh.com.au/business/markets/fading-triple-a-allure-could-send-a...

Brian Gaynor's pictorial analysis, while a little dated, differs little from the latest December 2015 release. Read article

Nice link Mr B., thanks.

It's hard to buy into his 1936 baseline because he doesn't fully explain *why* we were 3rd and so it becomes a large and unexplained assumption, that because it was once so, it should still be. Unfortunately circumstances changed and lamentations such as this; "100 years ago we had some of the highest per capita exports of any country.." don't clarify or add anything.

His arguments against immigration leave a lot of questions.

"smaller immigration programme, .. that seriously targets only the very ablest people..
But the richer the immigrant the more they attract irrational vilification.
But where is the research that shows this effective? (personally I feel this whole line of argumentation is bunk).

"house prices would fall..
Is he suggesting this is all it would take; surely this is overly simplistic.

real interest rates would fall..
But when we ran no net immigration they didn't, so why would they this time?

the exchange rate would come down, and stay down..
But when we ran no net immigration they didn't, so why would they this time?

I'd also like to comment on his statements about NZ being resource based.

He argues NZ is a resource based economy but doesn't mention the level of resistance inside NZ to developing any resource. Try digging a hole anywhere looking for minerals, or bottling water, or even just looking for oil anywhere off shore. As a society we seem more interested in moaning about the lack of jobs and the kids leaving for work overseas than doing anything about it. We are against everything and for nothing.

And if you stick your neck out, risk your life savings and/or house and put huge hard yards to make it a success (with no guarantees) my advice is - keep your head down. A sizeable and vocal chunk of NZ will look down on you as a rich fat cat *** (rhymes with banker). It might be that the only sin greater than being materially successful in NZ is to be seen enjoying it.

On the Mightyriver one:
http://www.stuff.co.nz/business/industries/80357976/former-mighty-river-...
"Paul Rose was good at his job, trusted by the company and was the most knowledgeable on site about electrical engineering, Williams said.
Paul Rose had numerous previous convictions including a one year suspended sentence for receiving stolen property and arson as well as other driving and drug offences, he said".
Haha. Given all this history, I'm wondering what would disqualify a person from being trusted by MRP???

The answer to NZ's cities transport problems? At least someone is thinking, even if abroad.

https://www.youtube.com/watch?v=3NVkCeGcIH8

This why Key CANNOT admit to a crises or admit to issues with foreign buyers with our housing. We risk trade deals if we make any manoeuvre to prevent foreign buyers from picking up a bit of kiwi land. See http://www.interest.co.nz/property/78005/mfat-says-tpp-effectively-preve...
We have sold our sovereignty for global trade and we can't do a damn thing about it. They fv(+ us.

Your access to our unique content is free - always has been. But ad revenues are under pressure so we need your direct support.

Become a supporter

Thanks, I'm already a supporter.