A review of things you need to know before you go home Monday; mortgage rate changes, TD rate changes, service sector booming, Aussies buying mostly SUVs, time to decide, swaps up, NZD holds gains

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

MORTGAGE RATE CHANGES
BNZ has raised its two year 'special' by +6 bps to 4.75%, putting its offer back near the top of those by its main rivals. Meanwhile SBS Bank has made exactly the opposite move, cutting its rate to 4.69%. And HNZC has trimmed -10 and -20 bps from its fixed rates.

DEPOSIT RATE CHANGES
NZCU South has taken -10 and -5 bps from its six and twelve month term deposit rates, respectively.

'RUDE GROWTH'
The local PSI service sector tracker was released today and it has bounced back up, staying in the upward trend that started in May 2011. It has been a long run higher. BNZ Senior Economist Craig Ebert said that "melded with the PMI, the latest PSI forms a picture of rude growth in the NZ economy, overall. Indeed, the composite index continues to point to annual GDP growth running in the order of 3 to 4%".

BIGGER & BETTER
August car sales in Australia brought yet another month where SUVs outsold traditional passenger cars. That has been the case for every month in 2017 other than January. It has never been the case previously.

HOW TO DECIDE
Time to start making up your mind about how to vote. Best to stay away from casting a 'personality' vote; if you agree and want to do it on policy, use these pages to focus on the issues that concern you most. We have been offering this comparative for many elections now and this 2017 one is attracting by far the most readers to our comparative pages. Unlike other similar services we don't 'summarise' or selectively edit. We only use each party's exact words and link to their original policy document. All on one handy page, per policy issue. So far we have delivered 163,000 'unique' reads for this service; that is, no double-counting. Will probably go well over 200,000 by Saturday. But given there will be about 2.3 mln voters, it is clear most people don't use policy to make a decision. :-(

VOTING EARLY
We are voting in advance much more aggressively this year. So far, almost 450,000 people have done that, more than double the pace of the 2014 election. In 2014 30% of all votes were cast 'early'. It looks like we may be well over 45% this time. A third of eligible voters aged 18 to 24 may not have enrolled. By contrast, more than 97% of people over 55 were on the roll. It is not possible to know if early voting favours one party over another, but with youth disengagement levels this high it is unlikely to be for those making the biggest effort to attract them.

HEARTLAND $150M DEBT ISSUE TO PAY 4.50% P.A.
Heartland Bank is borrowing $150 mln through an issue of five-year, unsecured, unsubordinated, medium-term, fixed rate notes. Investors will be paid 4.50% per annum, being a margin of 1.88% over the five-year swap rate. The notes have a BBB credit rating from Fitch.

CONSUMERS TAKE THEIR FOCUS OFF
Back in May and June, the focus was on the petrol price and fuel margins and why it was sticking high. Suddenly, it then dropped from about $1.90/litre discounted to $1.70/litre; even the Minister got involved. Now the focus is off the issue the price has risen back to $1.90/litre discounted (over $2/L pump price). (To be fair, there has been a small rise in the crude price, and a small fall in the exchange rate, both of which would pressure prices up.)

WHOLESALE RATES STILL RISING AND STEEPENING
Local swap rates are a higher again with a stronger steepening bias. In fact, the one year is down -1 bp. The two year is up +1 bp, the five year is up another +3 bps and the ten year is up another +4 bps today. The 90 day bank bill rate is unchanged 1.94%.

NZ DOLLAR HOLDS HIGHER
The NZD rose at the end of trading in New York and has held those gains locally today at 73 USc and the cross rates are at 91.1 AUc and at 60.6 euro cents. The TWI-5 is now at 75. The bitcoin price has recovered some of the slump it suffered last week. It is now at US$3,738, up +8.2% on the day. It is still a long way off its high of US$4,951 on Friday, September 1, 2017.

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

Daily exchange rates

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4 Comments

Aussies might be buying SUV's, but....

A "luxury car index" used by stockbroker Commsec which tracks sales across 17 high-end brands including Aston Martin, BMW, Ferrari, Lamborghini and Rolls Royce and is a reliable indicator for the broader health of the economy and house prices, has suffered its biggest annual drop in five years.

http://www.afr.com/business/transport/automobile/luxury-cars-index-slide...

DC, as a recent China visitor, you may be Interested in David P Goldman's analysis over at Asia Times: http://www.atimes.com/article/western-contempt-china-turns-panic/

Now that China’s tradeable stock market has risen by 43% during 2017 in US dollar terms (with the MSCI-based ETF as a benchmark), Western opinion is melting up. Bridgewater, the world’s largest hedge fund, is raising money for a China investment vehicle. Bank of America now predicts Asian stocks will double in the present bull run. “Hedge Funds Used to Love Shorting China. Now, Not So Much,” declared a Bloomberg headline Sept. 12.

And the valuations for the top 50 stocks on the Shanghai Exchange are 60% below what they were in 2007 (measured in JPY).

Thanks. Interesting indeed.