Here are the key things you need to know before you leave work today.
TODAY'S MORTGAGE RATE CHANGES
Housing NZ Corp have cut their 2 year fixed rate by -10 bps to 4.89% (and miles above most other lenders 'specials').
TODAY'S DEPOSIT RATE CHANGES
No changes here today.
The number of new homes being consented continues to fall well short of what is needed, the May data shows. Infometrics' Mieke Welvaert says there has been a considerable lull in consent growth in Auckland over the past few months, which directly contradicts the stories of overwhelming pressure to increase Auckland’s housing supply. So she says the big questions are: what is behind this lull? Is it temporary? Or have investors been put off by the threat of a fall in property prices?
ASB MULLS OUTSOURCING CASH MANAGEMENT PROCESSING SERVICES
ASB is considering fully outsourcing its cash management processing services to Armourguard. The bank says this is a proposal at this stage and it'll be consulting with the about 130 mostly part time staff who work in cash processing roles over coming weeks. If ASB pushes ahead with the proposal, it'll extend its existing cash management contract with Armourguard, moving to a fully outsourced model later this year. ASB says such a change would bring it into line with other major New Zealand major banks who outsource their cash handling processes to specialist providers. If the proposal proceeds ASB's two cash processing centres would close and in-branch services in Christchurch would also transition to Armourguard. The bank says "a number" of new roles would be available with Armourguard in Auckland, Wellington and Christchurch and it would also look to redeploy "as many people as possible" within the ASB business.
NO NEGATIVES, A 6 MTH HIGH
If you are a perma-bear, don't read this item. The votes are in in the ANZ business confidence survey for June. Confidence across the grass-roots of the business sector increased in the month. A net 20% of businesses are optimistic about prospects over the coming year, up 9 points on the month prior and reaching a six-month high. First past the post was the construction sector (at +37, the highest since March 2015), with bipartisan support from services (+36). The zeitgeist is uniformly positive. A net 35% of firms are optimistic about prospects for their own business. That’s above average and strong ANZ says.
Building consents for structures other than dwellings look like they will come in above levels expected by industry watchers. Maybe applications for housing aren't being made because there are just not enough firms or workers to push ahead with those projects. In Auckland at least, it is very clear commercial construction and major infrastructure projects are in full swing. (Perhaps builders can't make on houses what they make on the larger projects. If that is the case, it will be a long wait here for capacity. There is a lot on in the Queen City.)
LOADING UP LEVERAGE
Housing debt grew to a record $219.6 bln which is +8.5% higher than the same month a year ago, +29% above the level 5 years ago, and +74% higher than a decade ago. The year-on-year +8.5% rise is the fastest rate since June 2006. In contrast, consumer debt is growing at just +2.2% year-on-year. That is not a record, and is only +7% above the same level in the May before the GFC. In dollar terms, May housing debt grew $17.3 bln in the year. 76.8% of all mortgages are now fixed. 62.9% of all mortgages are due in 12 months or less, the highest level since July 2014.
FAT BANK ACCOUNTS
New Zealand households have $155.3 bln held in bank accounts, also a record. This grew +9.8% over the past year. But by being less than +10% it represents the "slowest growth" since January 2015. In dollar terms, May household deposits grew $13.9 bln in the year.
CRIME PRESSURE BUILDS
If you are a rose-tinted optimist, don't read this item. Crime is rising quite quickly, according to the latest data to May 2016. The latest version of the crime stats has only been going since mid 2014 when they changed to monthly reporting. It is a reasonable question to ask if this is the consequence of other social pressures.
SWAP RATES UP AGAIN
Swap rates rose today, the fourth consecutive day, up +1 bp across the curve. NZ swap rates are here. The 90-day bank bill rate is up again and by another +1 bp, now at 2.41%. That now is its highest since the March OCR cut. Even NZGB bond yields inched higher and there are now no issues trading below 2% any more.
NZ DOLLAR SIDEWAYS
Little movement in the Kiwi dollar today. The NZD is at 71.1 USc, at 95.3 AUc, and 63.9 euro cents. The TWI-5 is now just over 74.7. Check our real-time charts here.
You can now see an animation of this chart. Click on it, or click here.