Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Cooperative Bank has increased its floating rates by 10 bps and fixed term rates by 4-5 bps at the short end to 10 bps for the 4 yr and 5 yr mortgages.
DEPOSIT RATE CHANGES
SBS Bank has increased its 6 mth rate from 3.50% to 3.75%.
HOUSING DOMINATES INFLATIONARY PRESSURES
The ANZ monthly inflation gauge lifted 0.2% in February, up 2.2% for the year. The largest contribution to this rise was made by the housing and household utilities group, with 0.5% rise in rents and housing purchase costs. This pressure is likely to continue with a shortage of building sector labour and housing stocks.
DOWNER TO ACQUIRE HAWKINS
ASX listed Downer has reached an agreement to buy the Hawkins construction, infrastructure and project management business in New Zealand. Hawkins' offerings will complement Downer's business and provide a platform for growth in the non-residential construction market, which is expected to be $50 bln over the next five years. The deal is to be debt funded and expected to have a net positive effect on earnings in the first year.
SHORTAGE OF OVERSEAS FUNDS
While latest FX Reserves data shows that China's FX reserves have risen back to over the $3 tln mark, corporates are unhappy about the overseas deals they have had to miss out on due to their inability to send funds overseas. Bloomberg estimates that the value of overseas acquisitions so far this year have fallen by 74% compared to last year. This is likely to have also impacted the Chinese buying of overseas property.
CORRUPTION IN ASIA PACIFIC
A recent survey of nearly 22,000 people in the Asia Pacific region was carried out by Transparency International, shows that one in four people, that is over 900m people, in the region have paid bribes in the last year to access basic services like medicine, water and education. There is a huge dispersion among countries in the region with Japan at 0.2%, Australia 4%, China 26% and India, the highest, at 69%. However, China was the country where the highest proportion of people, 73%, believe that corruption rate has increased. The police was seen to be the most corrupt service followed by legislatures and government officials.
FARMGATE DAIRY FORECASTS LOWERED
Following the drop in Wholesale this morning's GDT, where dairy prices were down 3.2% and whole milk powder was down 16%, Westpac and ASB have revised down their forecast for this season’s farmgate milk price from $6.20/kgMS to $5.90/kgMS and $6.50/kgMS to $6.00/kgMS respectively. Westpac have also pegged back their forecast for 2017/2018 season from $6.50/kgMS to $6.10/kgMS, although, this carries larger uncertainty given the forecast horizon.
AUSTRALIAN BANKS STABLE
Fitch Ratings has reviewed the ratings of the four big banks in Australia. While the ratings and outlook for the banks remains stable, Fitch has identified increasing house prices coupled with low wage growth, a sharp slowdown in Chinese economic growth and deteriorating funding profiles as downside risks for the banks' ratings.
ONLINE BANKING COSTS JOBS
Credit Union South (NZCU South), the country's third largest credit union, will close four branches at the end of this month and one in May. This follows the growing use of online banking services and small membership numbers at these branches. These closures along with some staff restructuring will see eighteen roles disestablished and eight new roles created.
WHOLESALE RATES STEEPEN
NZ swap rates are 1 - 2 bps lower at the short end of the curve and 2 - 3 bps higher at the long end. US 10yr Treasury yields have not changed since this morning. The 90 day bank bill rate his unchanged at 1.99%.
NZ DOLLAR DRIFT LOWER
The NZD has traded down 20 pts from this morning's open against the USD and now trades at 69.6 USc. On the cross rates we are at 91.6 AUc, and at 65.9 euro cents. The TWI-5 index is now at 75.3. Check our real-time charts here or see below.
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