A review of things you need to know before you go home Thursday; no rate changes, joblessness, A2 Milk gets important tick, apartment sales dry up, NZSF stars, swap rates firm, NZD slips against USD

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

MORTGAGE RATE CHANGES
No rate changes today. But we have reviewed the state of the mortgage market as the Spring season develops.

DEPOSIT RATE CHANGES
No changes here either.

JOBLESSNESS
One in ten households were jobless in the June 2017 quarter, Stats NZ said today. About 150,600 New Zealand households were jobless in the June 2017 quarter. This equates to a jobless household rate of 10.6% - the lowest it’s been in a June quarter since 2001 (not a typo). The detail is pretty much as you might expect (sadly): joblessness was higher in single-adult households, particularly sole-parent households. Jobless household rates were highest in households with either no dependent children or a large number of dependent children (four or more). Women were more likely to live in jobless households than men. While those aged 55–64 have fairly low unemployment rates, they were more likely than other age groups to live in jobless households. Those born in New Zealand were more likely to be living in jobless households. Individuals living in jobless households were more likely to have no or low levels of formal qualifications. People of Māori ethnicity were more likely to live in a jobless household. Disabled people were over-represented in jobless households.

CHINA SAYS YES
A2 Milk has had its application to continue selling its infant formula products in China approved by Beijing regulators.

'DON'T BANK ON YOUR HOUSE BEING YOUR RETIREMENT FUND'
That's the warning from the Ontario Securities Commission. They found 45% of pre-retired homeowners in the province are relying on the value of their property increasing to fund their retirement. “Owning a home is not a substitute for retirement planning,” they say. The survey found that Canadian house prices are up about +230% in the past decade but that wealth is far from a sure thing and the debt agency pointed out that in a span of less than six months prices in the Greater Toronto Area have plunged -31% from their peak.

SITTING TIGHT
The RBNZ's September OCR Review was essentially a non-event in the scheme of things. The Bank left the cash rate on hold at 1.75% as widely expected and maintained its neutral final paragraph. At present there is a high level of uncertainty - particularly around the construction industry and housing market, fiscal policy and capacity pressures. Regardless of who forms the next government, both sides of the fence have expansionary fiscal policies which should boost the economy. However, question marks remain over the outcomes for housing and migration policies. And that could change quickly, undermine most sectors and leak confidence, in turn requiring looser monetary policy. An own-goal is possible.

THE BIG DROUGHT
It might be hard to believe, but there was only one - yes, one - apartment sold by auction last week in the whole of Auckland.

GREAT PERFORMER
The New Zealand Superannuation Fund has unveiled a strong June year performance. It returned 20.7% after costs and before New Zealand tax, swelling $5 bln to $35 bln - even without any Government contributions. The Super Fund is one of New Zealand's biggest taxpayers having paid $920 mln of tax in the year to June 2017.

WHOLESALE RATES BLIP UP
Local swap rates firmed again today although the two year is unchanged. But the five year is up +2 bps and the ten year up +3 bps. The 90 day bank bill rate gave up yesterday's gain and is back at 1.95%.

NZ DOLLAR HOLDS
The NZD has lost ground against the greenback today as the US currency salivated over the steep tax cuts being proposed in the US. The NZD is now 72.1 USc. On the cross rates we are holding at 92.1 AUc and at 61.4 euro cents The TWI-5 is now at 75.6. The bitcoin price took off higher today, up +9% in the past 24 hrs to US$4,192.

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USD 
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End of day NY time
Source: CoinDesk

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8 Comments

"Those born in New Zealand were more likely to be living in jobless households."

Well, well, well.

Winston will be throwing this stat around the immigration negotiation table won't he?

Along with everything else. Just because he has 1/7th of the largest party votes doesn't mean the policies he negotiates are proportional. He's going to go back and forth with Labour and National to play his game. Listening to his latest rant with the press he's on a massive power trip. It all comes down to which leader (Bill or Jacinda) is willing to betray their voter base and policies more to become a PM. Labour will have it a bit easier but they will still have to compromise a lot with the greens on board. Haha, just makes me laugh. He can push 100% of his policies then slowly compromise one by one to eventually see the desperate one bite. Hows that for democracy.

"prices in the Greater Toronto Area have plunged -31% from their peak" coming to Auckland soon?

Have been reading a few articles about that - there's a real risk of that downward trend gaining momentum....how contagious might it be? Thats the question. Greed turning to panic..

But with this huge pile of work committed over the next 5 years, plus all the projects under $100 mln, plus any new Govt initiatives around housing, it seems unlikely that the economy in our largest city will stumble to a 'panic'.

I can see a slowdown on price appreciation, even a levelling off. But base demand will be there for years yet, at least until supply excess enters the frame. The limit is 'affordability' but only for the numbers of people who can absorb the new builds. There will be sufficient households with high enough incomes to afford new builds while supply is tight. In that circumstance, prices will hold right at the stress threshhold.

But with this huge pile of work committed over the next 5 years, plus all the projects under $100 mln, plus any new Govt initiatives around housing, it seems unlikely that the economy in our largest city will stumble to a 'panic'.

Interesting POV to attach the "unlikely" probability based on infrastructure spend. Perhaps the Japanese need to take out of NZ's book about how to best apply fiscal spending to manage economic stability.

Just as well we don't have over-inflated prices and only 3% foreign purchases then, phew!

NZX50 hit all-time high for a period today. Party on.