A review of things you need to know before you go home Tuesday; Auckland Airport fuel allocations increased to 80%; Businesses more cautious; August trade deficit $1.2b; Lawyer sentenced for fraud; Topshop's NZ stores closing; NZD down

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
No changes here either.

MARSDEN POINT PIPELINE UPDATE
Jet fuel allocations at Auckland airport have been increased to 80% after the pipeline was successfully repaired. "The pipeline will be be operating at its current allowable capacity from today," Energy and Resources Minister Judith Collins said. "In the coming days the fuel industry will be looking at the sequencing of different types of fuel down the pipeline. This takes us a further step toward normal supply," Collins said. 

BUSINESS OUTLOOK SURVEY STRIKES CAUTIONARY NOTE
A more cautionary stance was notable in this month's ANZ Business Outlook Survey with businesses holding a finger over the pause button. Business are evenly divided between optimists and pessimists about their prospects, which puts business optimism at its lowest level since September 2015.  A net 30% of businesses expect better times ahead for their own business, down 8 percentage points from August's survey. There were also declines in businesses' expectations for investment, employment intentions, profits, and exports. There were also big falls in the expectations of businesses in the residential and commercial construction sectors.

KIWIFRUIT EXPORTS UP STRONGLY, DAIRY DOWN, AUGUST TRADE DEFICIT OF $1.2B
Kiwifruit exports increased by $73 million to $268 million in August, up 37% on August last year. The increase was the biggest contributor to a 9% ($306 million) increase in total goods exports in August, Statistics NZ said. In the 12 months to August, kiwifruit exports hit an all time high of $1.8 billion. Other export commodities that rose in August were petroleum products, food preparations including infant formula, and mechanical machinery and equipment. However dairy exports were down by $12 million compared to August last year. The monthly trade deficit was $1.2 billion in August, marginally lower than in August last year, Statistics NZ said.

LAWYER SENTENCED FOR FRAUD
Lawyer Timothy Upton Slack has been sentenced to 10 months home detention in the Auckland High Court for his role in a fraud relating to an Auckland apartment development. Slack had pleaded guilty to a charge of obtaining by deception brought by the Serious Fraud Office. This related to a $40 million loan from ANZ Bank which was used to fund the development of the Waldorf Celestion Apartment Hotel in Auckland. Slack was one of four people charged in relation to the matter. The other defendants, property developer Leonard John Ross, company director Michael James Wehipeihana and self employed consultant Vaughan Stephen Foster, are due to stand trial on June 5 next year.

RECEIVERS TO CLOSE TOPSHOP AND TOPMAN STORES
New Zealand's Topshop and Topman clothing stores will close permanently on Sunday after their receivers could not find a buyer for the business. The NZ retail chain was tipped into receivership on September 7.

NZIER SHADOW BOARD SAYS NO NEED TO RAISE OCR
NZIER's Monetary Policy Shadow Board has recommended the Reserve Bank leaves the Official Cash Rate on hold at 1.75%  at its review on Thursday. The Board said it continued to see both upside and downside risks to the interest rate outlook, with a very slight bias towards tightening..

WHOLESALE RATES LOWER
Local swap rates were slightly lower. All rates from 1 year to 10 years are down by 1 to 3 basis points. The 90 day bank bill rate is flat at 1.95%.

NZ DOLLAR LOWER
The NZD is trading at US72.4c. On the cross rates we are at AU91.34c and at 61.10 euro cents. The TWI-5 is now at 74.74. The bitcoin price has risen today, now at US$3,949.

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3 Comments

Local swap rates were slightly lower. All rates from 1 year to 10 years are down by 1 to 3 basis points. The 90 day bank bill rate is flat at 1.95%.

Hmmm.....

Does it really matter than in May 2004 you could borrow at 1% in federal funds unsecured that you could only get at 5.25% in July 2006 and after? It seems like it should matter, maybe even a great deal.

That’s not how balance sheets were/are constructed, however. The cost of such funding is but one input among several primary variables. If you can find cheap CDS available almost anywhere to change the risk bucket RWA calculations of your assets to make your balance sheet exponentially more efficient, then the cost of unsecured funding is almost immaterial (I would argue that in many cases it wasn’t “almost”). In that situation, you pay whatever the funding rate on huge volume regardless, making money by volume and size expansion rather the short/long spread theorized for traditional banking.

Thus, when the Fed was forced to reduce the federal funds rate after August 2007, it had no outward effect, either. The sudden and large disruption in CDS at the same time did, profoundly (and permanently) so. Read more

Is public selection of those that walk the corridors of US power about to be diminished due to a comprehension deficit?

A new study finds that American people are alarmingly poorly educated about their government, Constitution and freedoms.

A study that surveyed more than 1,000 Americans has discovered that the vast majority of US citizens seem to be illiterate when it comes to US politics and basic laws.

The research, performed by the Annenberg Public Policy Center of the University of Pennsylvania, reveals that only 26 percent of those surveyed could name all three branches of the government (executive, legislative and judicial). What's worse, one third of respondents failed to name even a single one. According to the study's authors, the latter indicator has remained the same for five years. Read more

I suppose sanity will prevail given a collective comprehension there is 'no taxation without representation'.

it makes for frightening reading.... i wonder what the stats would be here