Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
BNZ has increased its standard 3-year mortgage rate by 16bps to 5.15%, its 4-year rate by 21bps to 5.20% and its 5-year rate by 24bps to 5.39%.
ICBC has cut its mortgage rates by between -5bps and -20bps.
DEPOSIT RATE CHANGES
BNZ has introduced a special 2-year rate of 4% for depositors with at least $5000. It’s cut its 3-month rate by -25bps to 2.75% and its 5-month rate by -20bps to 3.30%.
ICBC has cut its 1-month term rate by -50bps to 2%.
NZ-CHINA FTA TO BE UPGRADED
Prime Minister John Key has announced negotiations will begin to “upgrade” the NZ-China Free Trade Agreement. The announcement follows a meeting between trade ministers at the APEC Summit in Peru. Key says it’s been eight years since the FTA with China came into force and it has “exceeded all expectations”. The negotiations will look to improve areas already covered by the FTA, and address new areas like competition policy and e-commerce.
TAX CUTS ON CARDS DESPITE QUAKES
The Prime Minister and Finance Minister Bill English say the option of tax cuts to be announced before the 2017 election remains on the table despite the extra cost of the Kaikoura rebuild. Key says the potential costs of rebuilding the road and rail connections to Kaikoura of $2-3 billion are not material, given the Budget is forecast to be in surplus by $8-9 billion by 2019/20.
QUAKES NOT EXPECTED TO DENT IAG’S MARGINS
New Zealand’s largest general insurer, IAG, has announced to the ASX it doesn’t believe the North Canterbury earthquakes will affect its insurance margin. It expects both the quakes and the storm that started in Adelaide on November 11 and spread through parts of Australia and the lower North Island, to cost AU$200 million in total. Factoring in the other natural disasters it has had to pay claims for so far this year, it still expects its “net natural peril” claims to fall within its AU$680 million allowance for the year. As at November 17 it has received 700 quake claims. UBS analysts believe this will increase “significantly”.
TEMPORARY FISHERIES CLOSURES
Primary Industries Minister Nathan Guy has announced a temporary closure of shellfish and seaweed harvesting along the earthquake-affected east coast of the South Island. There will be an initial one month closure of the crayfish fishery and three months for all remaining shellfish and seaweed species. Guy has also announced a $2 million package to investigate the impact of the earthquakes on these fisheries. In terms of commercial sale, crayfish is the most valuable stock in the area with an annual harvest value around $23 million. Paua is worth between $1.2 and $1.7 million.
FARM-GATE MILK PRICES LIFT PRODUCER PRICES
Higher farm-gate milk prices have pushed producer output prices up 1% and input prices up $1.5% in the September quarter. Statistics NZ says the prices received by dairy cattle farmers were up 28% and those paid by dairy product manufacturers were up 22% over this time. The hike follows the forecasted farm-gate milk price for milk solids rising to $5.25 per kilo in mid-September - up from $4.25 per kilo in May.
CAR SALES DRIVE RETAIL SPENDING INCREASE
A spike in used car sales, along with more fuel sales, have largely contributed to retail sales volumes rising 0.9% in the September quarter. Statistics NZ says motor vehicle and parts retailing sales volumes were up 3.4% and fuel retailing up 2.2%. Accommodation was also up 4.7%. The value of total retail sales increased 4.7% to $20.1 billion from the same quarter last year.
TWO MORE P2P LENDERS LICENSED
The Financial Markets Authority has licensed two peer-to-peer lenders this month - Citizens Brokerage Ltd and SCFL Management Ltd (Southern Cross Financial). This brings the total number of licensed P2P lenders up to seven.
CORPORATE BOND ACTION DOMINATES
The swap and bond markets have taken a breather after a few days of large yield movements. The one-year swap rate is down -1bps, while the rest of the swap curve remains unchanged. There haven’t been any notable changes in government bond yields. The 90-day bank bill is down another -2ps to 2.03%.
In corporate bond land, there have been some significant upward movements in yields for a handful of corporate names. Trustpower (2022 maturity), Auckland International Airport (2019 maturity) and Auckland City Council (2017 maturity) are all recording 6% jumps in their yields on the NZX Debt Market.
The biggest fall in yields came from the mainly un-rated or lowly rated segment of the market. Names such as Infratil (2017 & 2019 maturities), Fletcher Building Industries and Warehouse bonds (2018 & 2020 maturity respectively) have seen their yields fall over -2% on the day.
TOPSY-TURVY DAY FOR NZD
The NZD/USD has fallen into unfamiliar territory, slipping below 70 USc for the first time in four months. Early morning trading saw the NZD/USD slide. Yet the release of Stats NZ’s producer prices and retail sales data saw the NZD recover lost ground, before falling back around 70c just before 4pm. The NZD has risen the most against the AUD, up 0.3%. Check our real-time charts here.
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5 Comments
Tell me it ain't so for the world's third largest economy.
Japan posted a trade surplus for a second straight month in October, according to data released by the Ministry of Finance on Monday. The surplus was driven by a continued decline in the value of imports, which have fallen faster than exports.
Key Points
- Exports fell 10.3 percent in October from a year earlier (median estimate of economists surveyed by Bloomberg predicted an 8.5 percent decline)
- Shipments have also dropped in every month for more than a year.
- Imports decreased 16.5 percent during the same period, leaving a trade surplus or deficit of 496.2 billion yen ($4.5 billion). Read more
Thankfully we are on a distant island in the South Pacific. There will however continue to be significant migration from Europe.
Article from bloomberg:
Across Europe, 24 percent of people said they want to move to escape their country’s financial plight. About 27 percent of respondents said they sometimes can’t pay their debts. Of those, 58 percent feel they don’t have enough money “for a dignified existence.”
In Britain, 29 percent of people aged 18 to 24 said they’d consider leaving the country, possibly in response to the U.K.’s decision to quit the European Union, Intrum Justitia said. A year earlier, only 13 percent of young Britons said they wanted to leave.
Went to an Eves Realty auction 2 weeks ago in Tauranga, there were plenty of people there but no Chinese, of 25 properties 2 sold prior and 18 went at auction, there was a range of properties from those in $400's price bracket (1 at $487k was a ridiculous price for the unit but evidently the next door neighbour was intent on buying it) through to some around $1 million
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