A review of things you need to know before you go home Friday; mortgage and term deposit changes; QV House Price Index; terms of trade; energy hardship; gender pay gap; Caixin Manufacturing PMI; wholesale rates lower; NZD stable

A review of things you need to know before you go home Friday; mortgage and term deposit changes; QV House Price Index; terms of trade; energy hardship; gender pay gap; Caixin Manufacturing PMI; wholesale rates lower; NZD stable

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

MORTGAGE RATE CHANGES
ASB and Sovereign have dropped most of their standard fixed interest rates by -20 bps and most of their special fixed interest rates by -10 bps. Westpac has reduced its 2 yr special by -5 bps to 4.74%.

DEPOSIT RATE CHANGES
Westpac has dropped its 4 mnth and 6 mnth term deposit rates by -15 bps and -20 bps to 3.00% and 3.10% respectively.

QV HOUSE PRICE INDEX
The latest QV House Price Index shows that property values nationwide increased by +4.8% since August 2016. This was the slowest annual growth rate since August 2012. When adjusted for inflation the increase drops to +3.0%. Values in Auckland increased by +2.8% y-o-y but have fallen by -0.2% over the last three months. The average property price in Auckland is $1,041,957, which is 90.7% higher than the 2007 peak.

TERMS OF TRADE
Merchandise terms of trade rose by +1.5% to 1,437 in the June quarter, just shy of an all time high set 44 years ago in the June 1973 quarter, when the merchandise terms of trade was at 1,438. The +1.5% rise was made up of a +2.4% rise in export prices and a +0.9% rise in import prices. Export prices were up mainly due to price rises of meat and dairy, especially butter. Services terms of trade, on the other hand, fell by -4.8%, made up of service export prices falling by -1.5% and services import prices rising +3.5%.

ENERGY HARDSHIP
Stats NZ has developed a set of indicators to measure hardships households face in affording adequate energy. Indicators include items such as the proportion of household income spent on energy, energy bills being paid late, heating expenses being a major problem and having to put up with feeling cold a lot. Based on such indicators, Stats NZ has shown that 29% of households have experienced some energy hardship, energy hardship was much higher in lower income households, with two-thirds of low income households feeling some energy hardship, and that renters are more likely to experience energy hardship, with 44% of renting households experiencing energy hardship versus 22% of owner occupied households.

GENDER PAY GAP CLOSES
Stats NZ announced today that the gender pay gap has reduced from 12% last year to 9.4% in the June 2017 quarter. Median hourly wages for all workers rose by +3.4% in the year ended June 2017 whereas hourly wages for women increased by +4.6% over the same time. Women's Minister Paula Bennett has welcomed the reduction and stated that her aim is to make New Zealand the first country to eliminate the gender pay gap.

KIWIBANK PROFIT SMASHED
Kiwibank's parent, Kiwi Group Holding, has released their financial results today showing a fall in net profit after tax of -$73 mln. The net profit after tax itself was $58 mln. The primary cause was the impairment of $90 mln, or $65 mln after tax, relating to the work in progress on the IT project known as CoreMod. Kiwibank recently announced that its CEO Paul Brock was leaving at the end of 2017.

IT WAS 7 YEARS AGO YESTERDAY
Seven years ago yesterday Allan Hubbard's South Canterbury Finance was tipped into receivership after a long battle for survival. The 84 year-old company was then New Zealand's biggest independently owned finance company. The demise of South Canterbury Finance, which came during the days of the Crown retail deposit guarantee scheme, ultimately cost taxpayers about $805 million.

CAIXIN MANUFACTURING PMI
The Caixin Manufacturing PMI, released for August, surprised to the upside, with a reading of 51.6. Economists had expected the PMI to read at 51. Markit says that the PMI had the strongest new business increase in just over three years. Growth was driven by foreign demand, with the rise in export sales being the greatest in seven years. As a result, companies expanded production schedules and buying activity. Stricter environmental regulations, however, caused some increases to delivery times.

AUSTRALIAN HOUSE PRICES
Australian house prices have been steady for the month of August led by a slowdown across the Sydney market, says CoreLogic. Affordability constraints and tighter lending conditions were identified as the causes of the Sydney slowdown. Prices in Sydney were up 0% for the month and up 0.3% for the quarter. However, over the past 12 months prices were still up 13.0%.

WHOLESALE RATES LOWER
Swap rates have fallen today and the curve has flattened. The 2 yr to 4 yr rates were down -2 bps and 5 yr to 10 yr rates were down -3 bps. The 90 day bank bill rate is flat at 1.96%.

NZ DOLLAR STABLE
The NZD is almost at the same level as this time yesterday at 71.8 USc. On the cross rates we are also stable at 90.3 AUc and at 60.3 euro cents. The TWI-5 is at 74.0. The bitcoin price is up to US$4,798.

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And the latest polling from the well respected Daggy Enz pollsters shows a clear lead for Labour. Daggy Enz spokesperson Trev explained that they did not rely on outmoded methods of polling such as asking people who they intended to vote for, rather that close observation of trends gave a far better picture.

The heifers seem to be heading for green pastures but since these are in the back-blocks this trend can be largely discounted, Trev said.

The chocks, traditional National voters, are running around with their heads chopped off. This time last month they still had their heads down contentedly eating juicy worms.

Winston Peter’s figures are hard to decipher since the bull did a big **** right on the results. When we get to the bottom of it we will let you know, said Trev, the Daggy Enz media release person, but we think it could take some time.

The sheep are flocking to Jacinda with her winning smile and bucket of feed pellets. And since they are the most common animal here we see a clear victory for Labour, said Trev, the CEO of Daggy Enz.

The poll was conducted sometime in the last few days just after milking and before fixing the fence the heifers knocked down.

Mortgage rates continue to fall in the face of low inflation, low wage increases, flat Auckland housing, and lower mortgage loan growth.

The great stagnation.

Indeed. : )))

Maybe a new word has been coined:
Coremod. Definition: an ill-conceived IT project which does not even do what it was originally intended to do and is consequently abandoned.

almost ryhmes with cock up .

Heh, heh. Nice, but I have to object. To be *invented* would seem to imply this sort of thing is new and I know for certain the type of IT projects you are describing hve been going on for nigh twenty years now.

INCIS, Novopay, etc ...

The WWII term 'snafu' dates from a bit before that....and there's almost nothing that eager young pollies cannot 'fubar' - if we are silly enough to let 'em.....

As the old strategists have it - no battle plan survives contact with the enemy.

You are paraphrasing Helmuth von Moltke, 'On Stratgey', 1871 waymad.

Although von Moltke himself said of this; In this sense one should understand Napoleon's saying: "I have never had a plan of operations."

So it dates at least back to Napoleon.

I think Von Clauswitz also said something along these lines; the dream of a perfect plan is the enemy of a good plan. No doubt Sun Tsu had something to say on the subject.

The fragile threads of 'not-so-common' sense.

So the property crash stands at +4.8% pa in NZ & +2.8% pa in Auckland. Not too catastrophic so far

While many provincial cities up 17% or so! Hawkes Bay, Nelson, Dunedin, Rotorua etc - frantic refugee buyers economically fleeing the impossibly expensive Auckland.

Herald today suggesting that there is perhaps more to come in the Barclay, Glenys Diskson and Billshiter relationship story. This election could only get more weirder if it came out that there was a closer relationship than assumed between the last two and Todd knows.