What happened Wednesday

A review of things you need to know before you go home on Wednesday; Co-op Bank cuts savings rates, migration stays high, visitor levels boom, no let up in mortgage applications, swap rates up again, ditto NZD

22nd Jun 16, 3:59pm by David Chaston

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

TODAY'S MORTGAGE RATE CHANGES
No changes today.

TODAY'S DEPOSIT RATE CHANGES
The Cooperative Bank cut some savings rates and a short-term TD rate today.

PAST THE PEAK?
Migration inflows are still at record levels with arrivals increasing but fewer leaving in May. This data breaks all previous records with a net gain of 68,432 in the year to May. But many observers see the heat dissipating from long term migration flows and think we are now past the current peak. In May, most net arrivals were from India, followed by the Philippines, then China, then South Africa. More people left for the UK in May than arrived.

CHINA GETS TRAVEL BUG
Although visitor arrivals were virtually unchanged between April and May, arrivals were still +9.6% higher than a year earlier. The shoulder season got a boost. China remains the biggest source of growth, contributing 25% of the lift in arrivals compared with May 2015.

AUCKLAND COUNCIL TO ISSUE MORE DEBT
Auckland Council is about to issue a 10 year bond as part of its overall borrowing program, "with proceeds being used for the general purposes of the council, including refinancing maturing debt and funding investment in projects across the region". No word yet on how large the issue will be. Clearly it wants to stand apart from the LGFA issues.

MORE SAVVY WITH HIGH-COST DEBT?
The growth has evaporated from credit card balance levels. Billing on domestic cards were up almost +12% in May from the same month a year ago but the total amount we owed the banks was virtually unchanged. We are using these cards, but more of us are paying them down sooner. But that still leaves almost $3.9 bln incurring interest at over 18% pa.

LESS SAVVY WITH LONG TERM DEBT?
Last week's level of mortgage approvals were the second strongest in the past eight weeks, giving approval volumes at levels we saw in the March/April period. There is no 'winter' in the housing market this year. In fact loan approval volumes are running at their fastest growth rate of the year, using the RBNZ rolling q-on-q metric. The same is largely true for mortgage approval values.

TSB BANK GETS GONG
Consumer NZ has awarded TSB Bank the "People's Choice Award" for banking.

KEVIN KENRICK JOINS BNZ BOARD
TVNZ CEO Kevin Kenrick is joining BNZ's board as an independent non-executive director. Kenrick's previous jobs have included CEO of House of Travel, and chief operating officer of Telecom's retail business. BNZ chairman Doug McKay says Kenrick's a seasoned executive and marketer with an understanding of industries experiencing significant disruption through digital channels, with an understanding of how this impacts customers' experience. Two current BNZ directors, Susan Macken and Andy Pearce, are due to retire on June 30. Kenrick joins the board from July 1.

NOT JOINING THE PARTY
Most equity markets in our time zone are following Wall Street higher - except ours and Tokyo which are both lower so far today.

SWAP RATES STILL EDGING UP
Local swap rates are up +2 bps today across the board, following Wall Street earlier today. NZ swap rates are here. The 90-day bank bill rate is also up +1 bp, now at 2.35%.

NZ DOLLAR FIRMS AGAIN
Our currency is marginally higher than this time yesterday. The move is not large, but it is the latest in the recent trend higher. It is now at 71.4 USc, at 95.7 AUc, and 63.4 euro cents. The TWI-5 is now just over 74.4. 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

Source: RBNZ

Source: CoinDesk

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.

7 Comments

by Stephen Hulme | 22nd Jun 16, 4:40pm 1466570449

In or out, everyone seems to agree that the poor should keep subsidising the rich with land subsidies

Do the Leave campaigners care about the misuse of public money? No. How do I know? Because they have scarcely mentioned the European Union’s great bonfire of banknotes. You know, the item that accounts for roughly 40% of the EU budget, or £42bn a year, almost all of which is wasted. You don’t know? I rest my case.

I’m talking about farm subsidies. If the Brexiters have raised the subject at all, it’s only to assure recipients that these vast sums will continue to be extracted from taxpayers’ pockets if Britain leaves. Some – such as Theresa Villiers and Owen Paterson – have suggested that the great giveaway of public funds could even be increased. Read more

by Stephen L | 22nd Jun 16, 5:46pm 1466574400

Agricutural subsidies are indeed one of the bigger questions in regard to a Brexit, and could be one reason why Europe starts to break up itself if the Brits leave. On most other trade matters I imagine the status quo will largely prevail. The Germans will want to keep their 20 billion surplus with Britain, so won't rock the boat. The French will want to keep selling agricultural stuff to the Brits. So they won't play hardball on tariffs. Financial services will remain largely happily in London, despite fear mongering to the contrary. Immigration will settle down- the Turks and Romanians won't be allowed auto access, but most others still will.
But if the Germans have to top up the land subsidies to French landholders, they may just balk at that. A German, and European problem then. The Brits by the sounds will just pay their own landholders without laundering the money through Brussels.
I doubt Brexit will win, but it could be close.

by Morley | 22nd Jun 16, 9:22pm 1466587365

kiwi $ headed for .88 usd with no stops along the way. kill all exports dead, wont stop house boom created by government policy. Lets proudly show the world how stupid we are.

by Yvil | 23rd Jun 16, 4:11am 1466611891

It's tragic, the high NZ$ is killing NZ export and manufacturing. What do you expect when our OCR is only 0.25% than 2 years ago when most other developed countries have slashed their interest rates

by MortgageBelt | 23rd Jun 16, 6:42am 1466620960

NZ can't cut rates as the whole country is on the block for sale which is inflating land & property prices.

by MortgageBelt | 22nd Jun 16, 9:45pm 1466588739

And NZD heading for parity with AUD

by Keep It Kiwi | 23rd Jun 16, 7:13am 1466622833

I see Chinese visitor numbers are still up! Why wouldn't you want to come to this beautiful country and have a holiday taking in the fantastic scenery it has to offer, breathing in the clean air, meeting friendly locals, AND at the same time buying half a dozen properties in Auckland!!!