Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report today, so far at least.
DEPOSIT RATE CHANGES
No rate changes here either.
Weaker than expected prices at latest dairy auction suggest that Fonterra may be forced to drop its current milk price forecast of $6.75 for the current season. However ASB economists remain bullish.
HOUSING MARKET TURNS
House sales transaction data out today from Barfoots in Auckland shows them having the weakest September since 2008. Prices may be holding, but the level of transactions are surprisingly low. In fact, the September volumes were the lowest of any month since February. Meanwhile, QV data for September shows that prices in the Queen City are almost back to where they were a year ago. Nationally they are up +4.3% year-on-year, but prices are mostly lower than three months ago.
COMMODITY PRICE GAINS
ANZ reports: "The sun shone on the ANZ Commodity Price Index for the first time since June, with the index lifting +0.8% m/m in September (+12% y/y). All of the six major groups lifted in the month. At the sub-component level, 11 of 17 components rose, two were flat, and four fell in the month. Local returns received a +1.7% m/m boost (+13% y/y) as the NZD fell against most major peers for the second month in a row."
There were more than 9,800 new cars sold in September, which we think is a new all-time record for that month in data going back to the 1970s. Ditto for commercial vehicles. But it seems clear that we are peaking. It will be hard for a market of our size to continue to take new cars at this rate (100,000 per year, plus another 160,000 used imports). We should expect a leveling off at these numbers; all the exposure is to the downside.
Also plateauing at a high level are job ads. The latest ANZ job ads series indicates job ads in Auckland have fallen for five months straight and this region is almost at the bottom of the national table in annual growth terms. Labour demand is flattening off somewhat in line with the broader economy as key growth drivers such as construction, migration and tourism top out. However, the labour market remains very tight.
There were another $120 mln of LGFA bonds tendered today although the tenor this time is not strictly comparable with the previous tenders. But the 2020 element of the offer is, and that shows the accepted yield is virtually unchanged at 2.49% and still a very low cost of borrowing for them.
WHOLESALE RATES SLIP AGAIN
Local swap rates are down -1 bps across the board today. The 90 day bank bill rate is unchanged at 1.94%.
NZ DOLLAR HOLDS
After slipping -40 bps on the weak dairy auction, the Kiwi dollar has found its feet, climbing back to where it was at this time yesterday at 71.9 USc. On the cross rates we are slightly softer at 91.4 AUc but we are up a bit at 61.0 euro cents. The TWI-5 is now at 74.6. The bitcoin price is -2.5% lower today at US$4,310.
You can now see an animation of this chart. Click on it, or click here.