A review of things you need to know before you go home Friday; Kiwibank hikes a Notice Saver rate, house sales volumes dive, factories expand faster, RBA squeezed, crude demand seen jumping, swap rates rise, NZD slips

A review of things you need to know before you go home Friday; Kiwibank hikes a Notice Saver rate, house sales volumes dive, factories expand faster, RBA squeezed, crude demand seen jumping, swap rates rise, NZD slips

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

MORTGAGE RATE CHANGES
No changes to report here.

DEPOSIT RATE CHANGES
Kiwibank's 3 month Notice Saver PIE account had its interest rate bumped up to 3.25%, a +50 bps increase.

AFFORDABILITY ISSUES STRANGLING R/E MARKET
The New Zealand housing market continued its roller coaster ride in August with prices up slightly, but sales volumes are down dramatically. Nationally, sales volumes were -31% lower than in March although seasonality will have a lot to do with that. But on an annualised basis, the year to August 2017 is -17% lower than at the same time last year. August alone is -20% lower than August 2016. These are substantial declines. The highest August sales volumes were in 2003 when they reached 10,147 in the month, far in excess of the August 2017 level of 5,896. In Auckland, the recent peak annualised volumes were in October 2015, and August 2017 is now -30% lower on that basis. A median Auckland price of $840,000 tells the whole story - even though that is down from $905,000 in March. Nationally, Harcourts, NZ's largest realtor, said its average selling price dropped -$60,000 in August.

ALL SMILES ON THE FACTORY FLOOR
While the election polls are equivocal, the BNZ-BusinessNZ Performance of Manufacturing Index is nothing of the sort. It picked up to an impressive 57.9 in August, after a reading of 55.5 in July. This records a strong expansion, even further above its long-term average of 53.3, making it relatively rapid now. The manufacturing side of our economy is fair humming along.

DAIRY PRICES NOT MOVING MUCH
The latest USDA monitoring on dairy prices in our region shows a pick up in prices for butter, cheese and SMP, but no gain for WMP. However, the sliding NZD is boosting prices in local currency. The next auction is next Wednesday morning, September 19, 2017. The derivatives market is signalling that WMP prices are likely to slip -1.6% in USD terms.

OUCH
The RBA released its Annual Report today. But the news was not all good. It made a loss of just under -AU$0.9 bln and yet still had to pay a dividend to the Australian Treasury of AU$1.3 bln. They blamed valuation losses on holdings of foreign assets caused by the appreciation of the Australian dollar.

MORE ASSET BACKED SECURITIES - THIS TIME CREDIT CARD DEBT
Flexi Cards Limited (the old F&P Finance) has mandated BNZ and Westpac to arrange a series of ABS investor meetings. A Credit Card ABS transaction from the Q Card Trust may follow subject to market conditions. Watch out for who (fund managers) buys this stuff.

RISING DEMAND
The benchmark North American oil futures contract moved above US$50 a barrel earlier today, buoyed by predictions of growing demand worldwide. It's the first time since the beginning of August that WTI crude has traded above US$50. It hit US$50.30 a barrel at midday in New York, before sinking back to US$49.89 at the close, a rise of +59 cents. Brent crude, the main international contract, rose to US$55.80 US a barrel. A report from the US Energy Information Administration has projected world energy consumption will grow by +28% to 2040.

WHOLESALE RATES STILL RISING
Local swap rates are a higher again with a steepening bias, although less so today than earlier in the week. The two year is up +1 bp, the five year is up +2 bps and the ten year is up +2 bps today. The 90 day bank bill rate is unchanged 1.94%.

NZ DOLLAR SLIPS
The NZD is slightly lower than at this time yesterday at 72.2 USc and the slippage is across the board with the main cross rates at 90.3 AUc and at 60.6 euro cents. The TWI-5 is now at 74.2. The bitcoin price has slumped -11.1% today as the news sinks in that China is banning trading there. Russia also announced it may take similar action. It is now at US$3,454. Bitcoin's high was US$4,951 on Friday, September 1, 2017, so it is down -30.2% or almost -US$1,500 in just 15 days.

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The benchmark North American oil futures contract moved above US$50 a barrel earlier today, buoyed by predictions of growing demand worldwide

Hmmmm...

Inventories while moving in the right direction really aren’t doing so at a pace that is convincing enough. There is still far too much that looks familiar, which for this economic context is still the wrong condition.

It’s not that oil prices should crash tomorrow on saggy fundamentals and resurfacing (downside) risks. It is enough that they aren’t rising after all this time and what has supposedly improved. The futures curve still resists backwardation, even in hurricane-ravaged disruption. Read more

They blamed valuation losses on holdings of foreign assets caused by the appreciation of the Australian dollar.

Unusual, I thought, like the RBNZ, it (RBA) would use cross currency basis swaps to generate foreign reserves? And hence they would be on the right side of the collateral calls.

Whatever:

The Aussie is holding onto an 11 percent gain this year, despite remaining down from its two-year high reached last Friday. The currency hasn’t rallied like this since its blistering gains in 2009-10 took it to unprecedented heights above the $1 mark, but that rally came when the Reserve Bank of Australia was busy tightening policy.

While swaps markets are betting the RBA will be doing so within a year, board member Ian Harper says economic growth needs to get a lot stronger.

“Why would anyone be suggesting tightening monetary policy when the economy is operating below potential? I mean hello?,” Harper said in a phone interview Wednesday. Read more

A year after the Bank of Japan threw a lifeline to Japanese banks by targeting bond yields, lenders are still taking cold comfort from the move.

The difference between the rates banks pay their depositors and what they earn from lending has continued to slide, further sapping the profitability of doling out credit. Lending rates are still falling, while those on deposits have already reached virtually zero, squeezing net interest margins. Read more

11
up

Yang is reviewing his citizenship application according to the billshitter.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11922788

Well that's all right then - here was I thinking that the NZ legal system would check it - I guess they are right busy looking into Todd's criminal case so they make a decision before he gets on a plane on Monday or at least by 2020 - whichever comes last.

Good on Yang for helping out us poor yokels - what a trooper.

Seriously - Am I being cynical asking why this has been released late on Frid afternoon when all the dumb kiwis are thinking about is a big weekend of sport.

"Yang said giving the name of "partnership" universities instead of the institutes he actually worked and studied at was not a false declaration and was required if he was to leave China."

I thought the whole deal was about giving the correct info "if he was to enter NZ'

My mistake - guess I am as dumb as the rest of NZ

We just can't have this sort of subversive thinking. I mean the politicians would not lie to you would they? Where is your faith?

Two words for you, scarfie, Murray and McCully.

At number 33 on the List for National, he is certain to return to parliament.
Apparently fields on forms at NZ Government departments are under the governance of other countrys' policies and decree.

Not if all voters are like me

A Key fundraiser as well & wanting full anonymity for all donors
http://www.stuff.co.nz/national/politics/10391818/Secret-donors-Buck-sto...

Is there a strange conflation of God and Winston here? a bit Freudian? or is the sarcasm filter off?

"The Communist takeover of New Zealand was near complete, he (Winston) said".... Winston/God predicting an Ardern Govt no doubt? but he could mean a National Govt?? Classic WP.

The sharemarket and the NZ$ are all down after the last poll so Ardern is a cert?

""Immigration Minister Peter Dutton cancelled Mr Te Puia's visa on character grounds under section 501 of the Migration Act 1958."" Now is the time for Bil English to call in the Australian ambassador and expel him for 'character grounds'.

They will laugh in Bill English's face

In case you are not up to speed with the program, Australia outlawed all motorcycle gangs about 6 years ago. Any New Zealander choosing to reside in Australia while on a Special Category Visa while at the same time choosing to be actively engaged in a motorcycle gang is in for a short stay - he knew that the minute the outlaw legislation became law - as they say ignorance of the law is no excuse - his choice

That law applies to all bikers who are not Australian citizens - they will be deported - not just kiwis

Here is a summary of the laws - State by State - in many of the States the laws were in existence before Te Puia arrived there 12 years ago http://www.aic.gov.au/publications/current%20series/rip/1-10/02.html

Stuff election poll, 48000 responses @ 840pm tonight(way bigger sample than any other poll
Nats 45%
Labour36%
Green8%
TOP6%!!
Winston 4%
ACT1%
Interesting

I would still believe the results of the professional polls over that.
48000 votes doesn't mean anything if it isn't random.

The pro polls have been widely divergent, surely the Stuff one can't be 48 times worse??

You are saying that a poll that relies on opt in, and only reaches people visiting a certain site is reliable?
Come on...

All polls(unless the Reds get in) are opt in hopefully, and , yeah I know it's not that scientific, but could it be that Nat and TOP voters are more likely to read Stuff? there is a fair bit of randomness in this one I reckon, and as I said, the pro polls are disparate.
It may be that the people who are most likely to vote took part.
Only one poll that counts though; compare notes in a week or so.

Crowd Sourcing does have some merit. Stuff polls have been surprisingly accurate across a range of topics in the past 4-5 years.
By memory the stuff poll on the flag had the result correct to within about 0.1% of the actual result.

I'd always though a Nat/Green/Top govt would be good(but unlikely) as the Nats need a good kick on enviro and economics....

National will be desperate, but they won't ever be that desperate.

A desperate polly will do desperate things; think on it :a super scheme that'll cover you reincarnated, knighthoods, electric BMWs 'n all guv..eh wot

No way I would trust this poll...not even half of it. How ridiculous!

Unfortunately it's just a reflection of who reads

Stuff is a pretty generic website. I imagine the readership is quite broad.

I would also imagine it is a lot broader response that you would get from an unsolicited phone poll (landline or mobile)

interesting on that NZF are out and top are in, can not see that happening
it has labour/greens and nats neck and neck
still reckon it is too close to call