A review of things you need to know before you go home Monday; NZCU South changes TD rates, PSI still strong, population younger, retail sales jump, Narev's time limit, swaps up, NZD up, bitcoin leaps

A review of things you need to know before you go home Monday; NZCU South changes TD rates, PSI still strong, population younger, retail sales jump, Narev's time limit, swaps up, NZD up, bitcoin leaps

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

MORTGAGE RATE CHANGES
To changes today.

DEPOSIT RATE CHANGES
NZCU South reduced their 6 months rate by -25 bps, but increased their nine month rate by +20 bps to 3.70%.

UNDAUNTED
The Performance of Services Index (PSI) eased a couple of points in July to 56.0 from 58.3 in June. Although this is still a high level it does suggest service sector growth cooled somewhat in July. However, the key 'new business' subsector is still sky-high at over 60 where it has been for the past three months and for all but one month in 2017. By any measure, this sector is in fine form, undaunted by some gloomy weather in parts of the country.

A BETTER BALANCE?
NZ's population is up by almost +390,000 in just five years, up +100,500 in the last year alone. Net migration fueled population growth takes NZ's resident population to 4.79 mln at June with biggest growth coming in 15-39 age group. In fact, that surge, along with a similar (and surprising) bounce in the under 15yr olds, is helping drive down our average age. It is now 37.0 yrs, down from 37.6 yrs in 2013 when it reached its peak. Oddly, it is our male population getting younger, quickly. The average age for males is now only 35.6 yrs, whereas the average age for females is still going up and now at 38.3 yrs. A younger average age means we will be able to afford our social benefits (especially the universal pension) for slightly longer. The working age population grew by +75,800 in the last year, while the population for those over 65 grew by a stable +24,600. Without this population age trend, the political rhetoric would be all about the unsustainability of NZ Super.

BIG SPENDERS
The value of total all retail sales was $21.3 bln in the June 2017 quarter, up +6.7% of +$1.3 bln from the June 2016 quarter. That impressive gain was helped along by both the World Masters Games and the Lions rugby tour and the extra visitors they brought (+28,000 and +23,000 respectively). the accommodation, food and beverage industries all got impressive gains. This June 2017 quarter data might make the equivalent 2018 data look a bit sheepish however, unless we have something up our sleeve for Autumn next year.

MORE, PLEASE
Heartland Bank today announced very strong earnings (which incidentally are better than those reported by any of SBS Bank, TSB Bank, or the Co-operative Bank, and more than half those of Kiwibank which seems to be declining), and also signaled to will be seeking more bond finance from the wholesale and retail markets. There is no indication yet of the size of their offer, but it will likely all be revealed before the end of the month.

OUT !
The Kiwi CEO of Australia's largest bank, CBA, Ian Narev, has been told by his board that he will be retiring as at June 2018. Actually, that will end the normal term for a CBA CEO. (It is a longer tenure than for Ralph Norris.) But there is no doubt a series of reputation issues at the bank was behind today's signaling. Since he started at CBA in that role in December 2011, profits have risen almost +50% from AU$6.8 bln to AU$9.9 bln, a AU$3.1 bln rise. Before he leaves, that result may hit more than AU$10 bln. Also at record levels are customer satisfaction, with customer dissatisfaction at record lows, handily beating all their main rivals.

THE AUSTRALIAN KIWI PROBLEM
Kiwis are popping up all over the place in Aussie politics. That is a problem for them because their Constitution says you can't be elected to almost any office if you hold dual citizenship. And New Zealand's citizenship laws are a problem because you can't actually renounce New Zealand citizenship. You are if you are born here. Or at some time in the past, you are if your father was born here. This is a problem for today because the deputy Prime Minister of Australia, Barnaby Joyce, had a father born in New Zealand. The whole Aussie rule is farcical, but it is their rule. The recent focus on it has caused many politicians to have to quit. Joyce may be the next.

'WE'VE GOT OUR EYE ON YOU'
The Commerce Commission is targeting telecommunication companies. Today they sent warning letters to four of them about specific conduct that the Commission considers breached the Fair Trading Act. Letters have been sent to MyRepublic, Two Degrees, Spark, and Vodafone. Different issues relate to each of them. The letters follow the Commission’s announcement that retail telecommunications will be an organisation-wide priority for the Commission in the 2017/18 year.

WHOLESALE RATES FIRM
Local swap rates took a different track to the declines we saw on Wall Street at the end of last week. We are up +1 bps across the board. However these moves have not steepened the rate curve any. The 90 day bank bill rate is also up by +1 bp to 1.96%.

NZ DOLLAR ALSO FIRMER
The Kiwi dollar is up slightly from this time on Friday, but almost all of that firmess came over the weekend. It is now at 73.1 USc. On the cross rates we are also unchanged at 92.5 AUc and at 61.8 euro cents. The TWI-5 is up and just over 75.5. The bitcoin price is up in the clouds, up +20% over the weekend at US$4,128 and a stunning new record high.

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Regarding the falling average age in NZ: These facts will not stop those with vested interests from harking on about the retirement age of 65 being unsustainable.
If National wants to govern, its probably going to have to change its policy anyway.
I personally don't think that young people will want to see it rise anyway. Because if it does go up, it will never come down again before these young people retire.
I think everyone is on the same page regarding how long new immigrants have to be here before they get it though. ie WAY more than 10 yrs.

Perhaps a slightly over the top comment by Martin Armstrong regarding our "cousins" across the ditch:

Is the Australian government crossing the line into a Totalitarian State

Behind the Curtain, there seems to be no government going completely nuts more so than Australia. They are doubling taxes on all foreigners who own property, which is a violation of international law, and then they made it a crime for a foreign to even buy a house undisclosed. On top of all of this insanity, then they are planning to strip consumers of their legal protections if they pay in cash and fail to get a receipt. If an Australian pays for anything in cash, they suspect he is hiding money.

https://www.armstrongeconomics.com/world-news/taxes/is-australian-govern...

Japan's economy grew by 1% sequentially, and 4% on an annualized basis in Q2, smashing expectations of a 2.5% print and well above the upward revised 1.5% in the first quarter; it was also the the highest quarterly growth since a 5% print in Q2 2015, Japan's Cabinet Office reported, and the 6th consecutive quarter of expansion for recently embattled Prime Minister Shinzo Abe, who has plunged in the polls following a series of corruption scandals.

The unexpectedly strong GDP print was driven by a 9.9% jump in private non-residential investment as well as an striking 21.9% annualized surge in public investment as some of the public works spending included in last year’s economic stimulus package starting to emerge; meanwhile exports declined.

On a sequential basis, GDP rose 1.0%, above the 0.6% expected, up from the 0.4% in Q1 and the highest print in just over two years. Read more

They manage this economic success without immigrants? Can they contact the beehive.

Who needs immigrants when you have industrial production? The Japanese are building like tomorrow across Asia, particularly Vietnam where they're building infrastructure such as subways, coal and hydro power plants, bridges, and highways.

Basically relying on your growth by tapping into someone else's and that inevitably relies on ........ increasing numbers of people there. Precisely what Chinese companies are doing here with all the involvement they have in our "growth" . I cannot believe that people just can't see this, especially govt.

Government have been well paid not to see it. Where this productivity is supposed to come from when we're throwing away valuable natural resources for nothing, and half the businesses are operating only to facilitate immigration fraud, I don't know.

2 Articles on Trump, the Deep State, the Lügenpresse (fake news press), the Military Industrial Complex etc. There is more than just a little truth in both of these IMO. Bring Me the Head of Jeff Bezos Here is what Donald Trump should call for this morning. This is the right time to up his ante in the struggle against the Lügenpresse. All his efforts to fix the sinking ship of the US society are in vain with a breach below the waterline. If the Fake News applauds every jerk in a mantle who stops a presidential decree, the jerks will multiply and president’s decrees will be worth what? A collector’s rarity. A quirky exhibit from the days of Donald Trump’s short-lived presidency. The fake news media ridiculed the POTUS so completely, that this big man with big orange hair shrunk down to Lilliput’s finger. Trump can’t get out of his disposition by foreign policy acts. Forget about North Korea. It is a big hedgehog: a lot of bother to catch and kill, many prickles and no meat. The only thing Kim wants to tell Trump is “I am not a soft target, go look elsewhere”. Is North Korea dangerous? Only for those who want to step on it. http://thesaker.is /bring-me-the-head-of-jeff-bezos/ and If War Comes, Don’t Blame the ‘Military-Industrial Complex’ – Things Are Even Worse Than You Think As the drumbeat intensifies for what might turn out to be anything but a «splendid little war» against North Korea, it is appropriate to take stock of the ongoing, seemingly successful effort to strip President Donald Trump of his authority to make any foreign and national security policies that fly against the wishes of the so-called Military-Industrial Complex, or MIC. A Google search for «Military-Industrial Complex» (in quotation marks) with «Trump» yields almost 450,000 hits from all sources and almost 26,000 from just news sources. During the 2016 campaign and into the initial weeks of his administration, Trump was sometimes described as a threat to the MIC. But over time, with the appointment to his administration of more generals and establishment figures (including some allegedly tied to George Soros) while purging Trump loyalists, it’s no surprise that his policies increasingly seem less a departure from those of previous administrations than a continuation of them (for example, welcoming Montenegro into NATO). Some now say that Trump is the MIC’s best friend and maybe always was. There are those who deny that the MIC exists at all. One self-described conservative blogger writing in the pro-war, pro-intervention, and mostly neoconservative National Review refers to the very existence of the MIC as a «myth» peddled by the «conspiracy-minded». https://www.strategic-culture.org /news/2017/08/12/if-war-comes-dont-blame-military-industrial-complex-things-even-worse-than-you-think.html

Jacinda is 37, Bill is 55. Jacinda is more average

As I have said before, if we didnt import younger people the future tax take would not support the country, as many baby boomers would be retiring. The article says this quite clearly. Blame the Pill. Labour started this trend in 2001.

You realise that those people will be expecting to retire down the track.
I know an old lady who swallowed a fly

And just how exactly is that supposed to work when the majority of immigrants are chefs, retail, farm labour, cleaners, age care and other jobs which are so low-paid that they're eligible for more in subsidies than they actually pay in tax?

The aging population thing is not a problem PKchew. A few adjustments - no crisis. Keep your hair on,

Project Fear update. "Unemployment is now lower than at any time since 1975. Employment, at 75 per cent, is the highest since records began in 1971. Britain is currently the most popular destination in Europe for foreign direct investment, which shot up to £197 billion in 2016, compared with £33 billion in 2015, according to the (OECD)."
https://www.thetimes.co.uk/edition/comment/i-am-more-confident-than-ever...

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