Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
There are no rate changes to report today.
DEPOSIT RATE CHANGES
RaboDirect reduced both its Cash PIE rate and its Term Advantage Fund PIE rate by -25 bps today.
VALUES & VOLUMES SLIDE
Median house prices dropped in most parts of the country in December, according to the latest REINZ data, including in hot spots like Auckland, Queenstown and Waikato/Bay of Plenty. These lower prices were on sharply lower sales volmes, which were -11% down on the same month a year ago. In Auckland sales volumes were down -16%, in the Waikato/BOP they were down -23%, in Wellington down -7%, while Canterbury volumes were up +2%.
TALKING UP A MANAGEMENT DEFICIENCY
Powerco said today that it would "invest" up to $1.4 bln to upgrade the electricity networks supplying 320,000 homes and businesses in the Coromandel, Eastern and Southern Waikato, Western Bay of Plenty, Taranaki, Whanganui, Manawatu, Tararua and Wairarapa. It is to be a five year program. It will involve upgrading and replacing ageing poles and wires with "more modern and resilient equipment.” Sounds like catching up with massive deferred maintenance to me, rather than "investment".
ANZ MAKES APPOINTMENTS
Three senior ANZ New Zealand roles will be filled by internal promotions, the bank said today. Stewart Taylor will become their new CFO. (Current CFO Antonia Watson was already named to be the new head of retail and business banking.) David Bricklebank is to be its general counsel and company secretary. Craig Mulholland has been named "managing director of wealth".
CONFIDENCE HIGH, INFLATION STIRS
Business confidence ended 2016 on a high, NZIER said today, with pricing indicators pointing to an increase in inflation. Despite a minor easing, confidence levels remain at levels consistent with a continuation of solid economic growth. Confidence is elevated across all regions, with the recent Kaikoura earthquake appearing to have a limited impact on business confidence in affected regions. Confidence in Wellington rose to the highest level in over two years despite business disruption from the quakes. In addition, firms are still upbeat about their own prospects although are a bit more cautious than in September.
A MINNOW LOSES (AT)TRACTION
Trading values in the NZD (for spot, forwards, and swaps) were at their lowest levels for a December month in more than a decade. (Our records started in 2004.) It was the trading in NZD swaps that drove the weakness.
INFLATION LURKING
Here's a factoid to ponder: This week a year ago, the discounted price of unleaded 91 petrol was $1.6678/L. Last week it was $1.8581/L (ie, the discounted price). That means petrol today costs +11.4% more now. That is an inflation component that is sure to hit the headlines the next time the CPI is reported on January 26.
WHOLESALE RATES UNCHANGED
With Wall Street on holiday, local markets have taken their lead and left our wholesale swap rates alone today. The 90 day bank bill is down -1 bp to 1.99% in its recent oscillation pattern.
NZ DOLLAR HOLDING
The currency markets are equally subdued. The NZD is holding at 71 USc. On the cross rates, it is holding at at 95.1 AUc, and at 67 euro cents. The TWI-5 index is at 77. The GBP has had a minor reprieve from breaching a new low, but only because trading volumes are so much lighter. Check our real-time charts here.
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