A review of things you need to know before you go home on Friday; PMI rebounds; consumer confidence eases but still positive; Fletcher building review construction business and earnings forecast; Saudi king makes deals in China

A review of things you need to know before you go home on Friday; PMI rebounds; consumer confidence eases but still positive; Fletcher building review construction business and earnings forecast; Saudi king makes deals in China

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

MORTGAGE RATE CHANGES
No changes to report today.

DEPOSIT RATE CHANGES
TSB Bank had reduced their two year term deposit rate from 4.00% to 3.90%, but have since increased it back to 4.00%.

PMI REBOUNDS
The February Performance of Manufacturing Index (PMI) released by BusinessNZ this morning showed a positive activity increase, primarily led by production, new orders and finished stocks components of the index. The seasonally adjusted index level was 55.2 compared to 52.2 in January. After four months of decline, this has been the first increase since September 2016 and takes the reading back to levels similar to October 2016. While this is a strong headline number, there is still some patchiness in the regional and industry details that may be of concern.

CONSUMER CONFIDENCE EASES
The latest ANZ Consumer Confidence survey eased from 127.4 to 125.2 in March. While slightly lower, the number is still above the long term average of 118 and signals good economic momentum. Consumers continue to be optimistic about both current and future conditions. A net 13% of survey respondents believe that they are financially better off than a year ago and a net 32% believed that in twelve months from now their family will be in a better condition than it is today. However, the respondents are not as optimistic about the economy as a whole, with a net 21% believing that it will be in better shape in twelve months time and a net 22% believing the economy will be in better shape in five years.

DAIRY PRICE UPDATE
The latest price data from the USDA released this morning showed that while spot prices for Oceania whole and skim milk powders have weakened significantly over the last two weeks, following the pricing trend seen at the latest GDT event. However, the decrease has been slightly less than the drop in the GDT price index last week.

FLETCHER TRADING HALT
Fletcher Building has requested a trading halt on its shares listed on the ASX and NZX from 10:06 am this morning. The halt will be in place until Monday morning, pending review of its Construction division and the assessment of any impact on previously released earnings guidance. An updated earnings guidance is expected prior to the NZX and ASX exchanges opening on Monday.

SAUDI KING IN CHINA
Following his visit to Indonesia, where he gifted officials items worth over US$ 370,000, Saudi king Salman Abdulaziz Al Saud is now in China, where he has negotiated new deals worth US$ 65 bln, involving sectors from energy and manufacturing to theme parks. Saudi officials are also in talks with state owned Chinese companies and investment funds to invest in the IPO of Saudi Amarco, Saudi Arabia's national petroleum and natural gas company, which may be valued between $1 tln to $1.5 tln.

WHOLESALE RATES RISE
Local rates were up today and the curve steepened, reversing about half of the losses seen yesterday, especially at the long end of the curve. The two year rate is up +2 bps, the five year up +4 bps and the ten year up +5 bps. This rise is similar to the rates recovery in the US market from the fall triggered by the Fed statement. The US 10yr yield is back up to 2.54% from around 2.49% this time yesterday. The 90 day bank bill was down 1 bps to 1.96%.

NZ DOLLAR UP SLIGHTLY
The NZD fell about -50 points overnight, from 70.2 USc at the time of yesterday's report to start the day at 69.7 USc. It held on to those levels till about lunch time today and has since rallied 69.9 USc to recover some losses. While we also recovered some overnight losses against the AUD, the NZD has continued to drop against the EUR today. On the cross rates we are at 91.0 AUc and 64.9 euro cents. The TWI-5 is now at 75.0.

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14 Comments

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Highlight new comments in the last hr(s).

...if JPMorgan's equity derivative strategists are right, tomorrow's 'quad-witch' - with $1.4 trillion worth of S&P 500 notional set to expire - could lead to a vicious cycle higher in volatility going forward. Read more

Any excuse to reward shareholders at employee's expense.

Record profit at Japan’s biggest companies didn’t translate to big raises for wage earners at spring pay negotiations as prospects for exporters were clouded by risks to trade and growth in the U.S. and Europe.

Household names from Panasonic Corp. to Toyota Motor Corp., Nissan Motor Co. and Hitachi Ltd. announced smaller annual wage increases Wednesday for next fiscal year. The slower gains reflect rising concern among exporters about overseas markets following the election of President Donald Trump, said Takeshi Minami, chief economist at Norinchukin Research Institute. Read more

So, what are the options, I wonder? Charge them more to get in? Limit numbers? Build accommodation? Raise prices of everything as a deterrent? Rob and murder as many as possible until they're scared to come?

I would like to think whoever will do something - but I'm not holding my breath. Personally I think the problem will solve itself by people being put off coming to New Zealand.

Unfortunately those who will be put off are the ones we want, that is, the high value tourists. We'll be left with continued growth in low value tourists such as the freeloading campers and those from countries where the crowds and mess here are still better than from whence they have come. And thus NZ will continue to get poorer even as tourist numbers increase.

Did it occur to the previous numpty Minister of Tourism, and whoever the current idiot is, that there would be more motel space if we weren't using it to accommodate homeless families? Is a tiny bit of joined-up thinking too much to ask?

Meanwhile Wilson Parking takes over more NZ hospitals, Palmerston N. etc to keep its tax haven trusts going
http://www.smh.com.au/business/wilson-parkings-tax-numbers-appear-to-def...

They don't pay tax in NZ - a Black Hole of Silence

Notice these denizens of the Caymans and British Virgin Islands simply continue on their merry way

Never gets any traction - just disappears down a black hole

Owner's have purchased, must sell , highly motivated, price reduced, listings continue rising, lets negotiate, but be quick. Agent needs to pay lease on audi, don't miss out, buy now ,prices will not fall in the leafy suburbs, because they are special.

Why would NZ give away its publicly owned assets to a tax haven organisation with no benefit to NZers?

Because that's the way we roll.

On a weekend where you have one of New Zealand's largest companies in a trading halt, undoubtedly preparing the market for some unpleasant news on Sunday, where instead of building a conference centre it may have only costed for a carpark, only one commentator broached the subject. Our nation is so infatuated with real estate, so besotted by our recent found paper wealth, so deluded, that after two decades of incessant vested real estate drivel that buying a home is the path to success, yet oblivious to the cliff edge rapidly approaching ahead .Like Fletchers, Hunan Daking went into a trading halt last week.,, but as long as the neighbours made money on flipping a home New Zealand will be fine.

There is a full disconnect between the money pouring into NZ property & assets, and any local authentic industry.
That's globalisation for you, & the price of having our land, houses, property, farms, businesses all on the global open market.