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A review of things you need to know before you go home Monday; TSB Bank & BNZ change rates, retail spending up, guest nights catch up, inflation inches up, growth firm, more irrigation, swaps & NZD flat

A review of things you need to know before you go home Monday; TSB Bank & BNZ change rates, retail spending up, guest nights catch up, inflation inches up, growth firm, more irrigation, swaps & NZD flat

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

MORTGAGE RATE CHANGES
TSB Bank has raised its floating mortgage rate by +15 bps to 5.80%. Details here.

DEPOSIT RATE CHANGES
BNZ cut their eight month TD special to 3.60%, from 3.65%.

UP, BUT DOWN
Retail spending, as tracked by the use of electronic card activity, was just over $5 bln in May, which is +5.2% higher than the same month a year ago. But the May level represents the third month in which the dollar value declined. Seasonally adjusted, the main softness was in 'consumables' (that is, grocery and liquor retailing). There is nothing unusual about the May decline - that is what happened in previous years and in fact that trend continues through to June usually.

CATCH-UP
Easter boosted guest nights in April 2017, up +6.9 on the quiet April 2016 when the Easter holiday fell in March. Without Easter in March this year, we had a significant fall in guest nights when compared with March in 2016. The increase we saw in April is the expected reversal of that Easter effect. The impact affected the budget end of the market especially. At the other end, the national average hotel occupancy rate was still a very impressive 73% in April. (For campgrounds it was just 20% and it will get down under 10% in May/June/July.)

INCHING HIGHER
ANZ's unofficial monthly inflation monitoring is pointing to slightly faster price rises that is typical for this time of year and their basket is now up +2.3% year-on-year. The Underlying Ex-housing Gauge also lifted +0.2% in the month and is now up +1.0% year-on-year. Some sizable lifts came through in the services category; otherwise there was not much to see. The housing group was flat, with the purchase of housing up, but rents down.

HOLDING UP
The latest NZIER Consensus Forecasts shows a modestly softer growth outlook in the near term compared to the last quarter’s release, but an upward revision from 2019. Overall, the forecasts point to continued momentum in the New Zealand economy. Although household spending forecasts are softer over most of the projection period, the outlook remains robust with expectations that annual growth will hold up above +3% in 2019. Meanwhile, investment forecasts have been revised up from 2019, largely reflecting stronger housing construction forecasts.

A BIG REGIONAL BOOST
The Minister for the Environment has granted Hunter Downs Water "requiring authority" status to develop and operate the Hunter Downs Irrigation Scheme in South Canterbury. The scheme will take water from the Waitaki River to irrigate land between Waimate and Timaru. Hunter Downs Water has previously obtained water-take consent from Environment Canterbury and a development grant from Crown Irrigation Investments. This scheme has the potential to irrigate 40,000 hectares, bringing benefits to 200 farmers. The economic benefits to the region are estimated at an increase in output of $830 mln per year, and 1,840 jobs in South Canterbury.

PERSPECTIVE
In Sydney, the headlines are "market slumps" - because the auction clearance rate has fallen below 70%. Volumes for sale there are lower as well. Our New Zealand real estate industry would be claiming a strong rebound if we had a similar level.

WHOLESALE RATE CURVE FLATTENS
There are few changes again today. The 1 year terms is down -1 bp to 2.01, and the seven and 10yr are up +1 bp. The 90 day bank bill rate is unchanged at 1.94%.

NZ DOLLAR FIRMLY STABLE
NZD is basically unchanged today at 72.1 USc. On the cross rates, against the Aussie we are at 95.8 AUc which is up a little, even though it is a public holiday there today, and we are at 64.3 euro cents. The TWI-5 is now at 76.4. And bitcoin has pushed on up over US$3,000 today to US$3,011 which is a +5.8% gain on the day. This is a record high.

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

Daily exchange rates

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End of day UTC
Source: CoinDesk

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4 Comments

China Construction Bank has a billion dollars of lending in this country, three times more than it had a year ago. Its deputy chief executive here, Lloyd Cartwright, told our reporter Phil Pennington, that Chinese offers to play a big part in the Christchurch rebuild made people nervous - but now the country appears ready to take a step of faith with China, for instance, in a big road project in Auckland. Read more

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That's not really 'news'. See this.

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The BNZ term deposit rate cut will make it very hard for that particular bank to claim that it is increasing its term deposit rates.....

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if you had invested $1000 in bitcoin in 2010 when it started it is now worth $100,000,000
not many investments have that kind of return.
https://en.wikipedia.org/wiki/History_of_bitcoin

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