What happened Monday

A review of things you need to know before you go home Monday; Westpac cuts some rates for savers, Cabinet reshuffled, odd French vote, swap rates rise & steepen, NZD up

24th Apr 17, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
No changes to report.

DEPOSIT RATE CHANGES
Westpac has made some changes to their TD rates today, adding +25 bps to their 2 and 3 month rates taking them to 1.50% and 3.00% respectively. Their five month rate has been reduced by -25 bps and is now 3.10%. For rates of 9 month, a -10 bps reduction applies. For 12 and 18 months the cut is just -5 bps. They also cut their bonus saver and by a notable -30 bps to 2.10%. Their 'Encore business' deposit rates were chopped hard to just +0.05%, a rate so low you wonder why they bothered to offer anything.

RESHUFFLE
There has been a minor Cabinet reshuffle today. The main talking point is the handing of some core housing portfolio responsibilities to Amy Adams.

NOT WHAT WAS EXPECTED
The French election has come up with a truly odd result, in many ways. Firstly, the party of the current president has been humiliated. Secondly, the party of the usual centre-right opposition has been nudged into third place and out of contention. The winner of most votes on the first round is a centerist who campaigned that staying with the EU is the best path for France and he will most likely win the runoff. The far right candidate did manage to get into second but all other losing candidates are rejecting her and throwing their support behind Emmanuel Macron. Le Pen it seems is unelectable. And the result may be a ringing endorsement for a united Europe. All a bit like what happened in Holland a few weeks ago and proving euro-sceptics are all a bit of a fringe. The euro has risen in relief.

WHOLESALE RATES RISE, STEEPEN
Local swaps rates have risen yet again today with a steeper bias. They are up +3 bps for two years, up +5 bps for five years and up +6 bps for ten years. The 90 day bank bill is up +2 bps to 1.97%

NZ DOLLAR UP
The NZD is definitely firmer today than on Friday. We are back to 70.3 USc. Against the AUD, we are up to 93.1 AUc. Against the EUR we are lower at the 64.9 euro cents level as markets think the le Pen challenge will fail. The TWI-5 is now at 75.

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

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

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7 Comments

by Gummy Bear Hero | 24th Apr 17, 4:22pm 1493007733

... there is absolutely no point in Wild Bill and his nit-witty Gnats having a re-shuffle .... we need to chuck them out ... and play a new hand with a fresh pack ...

by Cowpat | 24th Apr 17, 4:43pm 1493008982

Glancing at Trade Me today, is a 200sqm new home on 248sqm of land in Hobsonville 'affordable' or priced reasonably at 1.4 million. Is it suitable for FHB.

by Stephen Hulme | 24th Apr 17, 4:48pm 1493009296

Chinese companies seeking overseas acquisitions increasingly covet offshore dollar funds as capital controls make it hard for even state-controlled investment firms to finance deals with domestic resources.

Citic Capital Holdings Ltd., the alternative-investment arm of China’s largest state-owned conglomerate, has been rejecting requests from firms asking to use its dollars as a bridge for buying assets, Chairman Zhang Yichen said in an interview Saturday. The company’s offshore dollar funds have become the only funding option for its own deals, as moving yuan overseas for itself has become “very difficult,” he said.

“There’s such demand, and many people come to us,” Zhang said on the sidelines of a forum in Zhengzhou, China, adding that his firm will only consider “real investments” rather than just holding assets for others. For itself, moving onshore funds out is now “very slow, and many deals have no choice but to be financed by dollars because people can’t wait.” Read more

by Stephen Hulme | 24th Apr 17, 4:56pm 1493009782

Local swaps rates have risen yet again today with a steeper bias. They are up +3 bps for two years, up +5 bps for five years and up +6 bps for ten years.

Indeed.

Treasuries dropped across the curve after pro-Europe centrist Emmanuel Macron won the first round of France’s presidential election, easing demand for safer assets.

Benchmark 10-year yields headed for their biggest one-day jump in three months as Macron edged out anti-euro nationalist Marine Le Pen in the first round of voting. Read more

by Stephen Hulme | 24th Apr 17, 5:40pm 1493012415

The far right candidate did manage to get into second but all other losing candidates are rejecting her and throwing their support behind Emmanuel Macron.

Hmmmm....

There is something undeniably odd about the prospect of electing a banker to run a country dealing, in part, with an economic crisis created by banks. Still, as the French columnist Pierre Haski told The Intercept this weekend, for many French voters, the fact that Macron has actually had a job of any description helped to distinguish him from the other four leading candidates, including Le Pen, who were all career politicians. Read more

by dictator | 24th Apr 17, 6:56pm 1493016993

No wonder politicians are so out of touch with reality.

by Ralph | 24th Apr 17, 7:14pm 1493018083

It was US government policy that everyone should be able to own their own home.

It was job of government agencies Fannie Mae and Freddie Mac to make that happen.

It was the rating agencies who said it was all 'gold' (or better).

It was the Fed under Greenspan that kept interest rates in the sewer way too long.

It was the clever regulators who decided 'mark to market' was a good standard.

It was the universities who trained a generation that 'greed is good' and 'truth' is relative.

It wasn't just the banks.