What happened Wednesday

A review of things you need to know before you go home Wednesday; property investors pull back; insulation grants extended; fewer farmers feel stressed; Australian broadcasters soar; Petya strikes; rates up; NZD lower

28th Jun 17, 3:58pm by Suraj Varma

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

MORTGAGE RATE CHANGES
No changes today.

DEPOSIT RATE CHANGES
FE Investments has reduced its 18 month rate by -20 bps and increased the 2 year rate by +20 bps but the 2 year deposit requires a minimum of $10,000 to be invested.

INVESTORS PULL BACK
Reserve Bank figures show that during May, investors borrowed $1.49 billion, compared with just under $2.49 billion in May 2016, which is a whopping 40% drop. At the same time, amount borrowed by first home buyers is up +1.9% to $849 mln and this makes up 14% of the total mortgage borrowings in May.

INSULATION GRANTS EXTENDED
The Government has extended eligibility for Warm Up New Zealand to low income home owners in addition to landlords with low income or high health need tenants. The grants cover 50% of the cost of ceiling and underfloor insulation. Over the last eight years about 300,000 homes have been insulated under the scheme and grants will be available until the end of June 2018.

FEWER FARMERS FEEL STRESSED
Survey results from May 2017, released by Federated Farmers, show that fewer farmers, 8.5% as opposed to 9.6%, are feeling that they are coming under 'undue' pressure from their banks. Andrew Hoggard, Federated Farmers’ National Vice President, believes that "the easing of pressure could be thanks to an improved farming outlook on the back of higher commodity prices since the middle of last year, most dramatically for dairy but also for meat."

AUSTRALIAN BROADCASTERS SOAR
The Australian Government has given into lobbying from Australian commercial television broadcasters and reduced their fee of about AU$127 mln to zero. This is however replaced with a spectrum charge of AU$43.5 mln. This has resulted in shares of free-to-air broadcasters, such as channels 7 and 9, rising by 3-6%.

MAERSK HIT BY PETYA
The global shipping giant, Maersk, has had its global computer systems impacted by the Petya cyber attack, which is a ransomware attack affecting multiple businesses. The attack impacted all of Maersk's business units, which include container shipping, port and tug boat operations, oil and gas production, drilling services and oil tankers.

WHOLESALE RATES RISE
Local rates are higher and steeper, following global moves overnight. The 2 year rate was up +3 bps to 2.24%, 5 year was up +5 bps to 2.74% and 10 year was up +8 bps to 3.21%. The 90 day bank bill rate is down -1 bps to 1.95%.

NZ DOLLAR SLIGHTLY LOWER
The NZD is marginally lower than at this time yesterday at 72.8 USc although it had touched 73.4 USc overnight before falling to current levels after President Draghi's speech, which sent the Euro soaring. On the cross rates we are trading at 95.7 AUc and at 64.1 euro cents. That takes the TWI-5 to 76.8.

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

Daily exchange rates

Select chart tabs

Source: RBNZ

Source: CoinDesk

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

9 Comments

by Boatman | 28th Jun 17, 4:48pm 1498625298

This cyber attack is serious

by James007 | 28th Jun 17, 4:55pm 1498625741

You mean it is not fake or team NZ news.

by mspace | 28th Jun 17, 5:10pm 1498626616

Removing ransomware is trivial (wipe machine, restore from backup), preventing reinfection is a little trickier if the attack vector hasn't been identified.

Seems like Petya uses a couple of vectors but at a high level seems relatively easy to protect against on up to date installations and reasonable wetware security practices.

The fact that so much of the corporate world appears to remain unpatched and open to this stuff is a bit concerning though.

by head_down_bum_up | 29th Jun 17, 8:11am 1498680668

The removal may be trivial, but if your data is encrypted then it is not accessible and that's the whole point. They are targeting your data being important to you.

It's not surprising of corporate's lack of patches etc. Upgrading is a significant cost and burden. the number of places I saw still running Windows XP or 7 and IE6-8 when working in finance in London was eye watering.

by Stephen Hulme | 28th Jun 17, 5:01pm 1498626089

Australia’s central bank could increase interest rates eight times in the next two years, former board member John Edwards said.

The Reserve Bank of Australia is probably already considering a program of rate increases given its forecasts for inflation returning to target and economic growth to accelerate to 3 percent against a stronger global backdrop, Edwards said in a column on the website of the Lowy Institute for International Policy, where he is a non-resident fellow.

Theorizing that the long-term cash rate is about 3.5 percent -- lower than the 5.2 percent average over the past two decades -- and the RBA wants to start tightening in 2018 and reach its goal within two years, that would require four quarter-point increases each year, he said. Rates have been on hold at 1.5 percent since last August. Read more

by Camel's back | 28th Jun 17, 6:03pm 1498629816

Q: If our dollar dropped, would that affect mortgage rates?

by frazz | 28th Jun 17, 6:32pm 1498631575

Be interested to see how many landlords take up the INSULATION GRANTS - my pick is not many as how if it cant be depreciated or claimed back why bother, and they will have to front up with some money themselves.
No tenants if black mold is a problem and your flat is crying from the inside just open a window...especially on the cold clear days, better still put another layer on.

by Stephen Hulme | 28th Jun 17, 6:40pm 1498632050

The Bank of England is to force banks to strengthen their financial position in the face of a rapid growth in borrowing on credit cards, car finance and personal loans.

The intervention by Threadneedle Street means banks will need to set aside as much as £11.4bn of extra capital in the next 18 months and is intended to protect the financial system from the 10% rise in consumer lending over the year. Read more

Another nation exporting jobs and replacing them with debt?

by Cowpat | 28th Jun 17, 9:06pm 1498640769

Auckland June real estate sales on course for decade low. With auctions little more than coffee and needlework gatherings how will the agents and agencies put the excitement back in real estate, how will they encourage head to head combat between alpha males,who no longer have pre- approval to outbid one another.