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A review of things you need to know before you go home on Thursday; banks ignore OCR cut, lawyer get home detention for fraud, trust reforms, LGFA yields rise, occupancy rate up, swap rates leap, NZD little changed

A review of things you need to know before you go home on Thursday; banks ignore OCR cut, lawyer get home detention for fraud, trust reforms, LGFA yields rise, occupancy rate up, swap rates leap, NZD little changed

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

MORTGAGE RATE CHANGES
No rate changes today. But the BNZ put out a statement that they are not passing on any cut from the RBNZ OCR reduction.

DEPOSIT RATE CHANGES
No changes here either. BNZ also said they are not raising any TD rates either.

OCR CUT TO 1.75%
RBNZ today cut the OCR by -25 bps to a record-low 1.75%. It forecasts the OCR to be flat from here; but says it may have to adjust policy again depending on international uncertainties. No bank has adjusted any retail rate following this change.

LAWYER GETS HOME DETENTION FOR FRAUD
Edward Errol Johnston was today sentenced to 11 months’ home detention and ordered to pay $50,000 in reparation. The former solicitor pleaded guilty in September this year to three Crimes Act charges of ‘Dishonestly taking or using document’. During the period December 2011 and January 2012, Johnston owned properties in the Auckland area and had fallen into arrears on his loan repayments to his bank. When faced with a requirement to reduce his existing debt, Johnston manipulated the system. He submitted false Sale and Purchase Agreements to his bank. The bank accepted the fictitious transactions. In reality, the properties were either sold for a higher price than he had stated, or transferred to another Trust and refinanced with a loan from another bank. In January 2012 Mr Johnston submitted a false Statement of Assets and Liabilities to the bank when obtaining the refinanced loan.

GOVERNMENT OUTLINES REFORMS TO LAW OVERSEEING TRUSTS
Justice Minister Amy Adams has released draft legislation updating laws covering the 300,000 to 500,000 trusts in use in New Zealand. Adams notes about 15% of private houses are held in trusts. She also points out 60-year old trust law is complex and hard to navigate. Proposed reforms are largely based on recommendations for modernising and clarifying trust law made by the Law Commission in 2013.

The proposed changes include:
· making it easier for people to understand how to appropriately use trusts to manage their affairs
· clear mandatory and default trustee duties so people know what their obligations are if they’re involved in managing a trust
· requirements for trustees to manage and provide information to beneficiaries
· flexible trustee powers and updated rules
· clear rules for when people make changes to a trust or wind them up
· more options for removing and appointing trustees without having to go to court while also preserving people’s ability to ask the courts to intervene to resolve disputes.

LGFA BOND YIELD RISES
The latest LGFA bond tender was well supported. It had a wide spread on bidding yields. The weighted coverage ratio rose to 2.9 times. The average weighted yield jumped 10 bps to 3.3%.

STILL STRONGLY POPULAR
International visitors continued to boost guest-night numbers, particularly for motels and hotels, Statistics NZ said today. National guest nights for September 2016 were +6.4% higher than in September 2015. Over two-thirds of the rise in guest nights was from foreign visitors.

ACTION, REACTION
Almost all equity markets in our time zone are higher today, recovering from yesterday's falls.

WHOLESALE RATES LEAP
Wholesale swap rates leaped today, up +6 bps for 2 years, up +18 for 5 years, and up +25 bps for 10 years. That is serious steepening folks! At one point earlier in the day, these rates were even higher. The 90-day bank bill is down -2 bps to 2.09%.

NZ DOLLAR HOLDS HIGH
The Kiwi dollar is now at 73 USc which is lower than this time yesterday. On the cross rates, it is trading at 95.3 AUc, and is at 66.7 euro cents. The TWI-5 is at 77.2. Check our real-time charts here.

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

Daily exchange rates

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Source: RBNZ
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End of day UTC
Source: CoinDesk

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5 Comments

Big 4 banks will probably raise fixed rates over the next two weeks.

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I'll believe it when I see it .....

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Why did we have an OCR cut ?

When all that has happened is the Aussie banks have taken it as a windfall ?

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The world press is talking about NZ as a safe haven.

http://www.bloomberg.com/news/articles/2016-11-10/for-some-americans-ca…
http://www.bbc.com/news/world-asia-37932921

Just need to control it with the right type and the right speed for our infrastructure etc.

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"+18 for 5 years, and up +25 bps for 10 years"

So NZ actually had a rate hike today...

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