A review of things you need to know before you go home Wednesday; dairy prices slip, payout under pressure, strong jobs growth, NZSF's outstanding returns, life expectancy, swaps slip, NZD holds

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

MORTGAGE RATE CHANGES
No rate changes today.

DEPOSIT RATE CHANGES
None here either today, so far at least.

GETTING NERVOUS
A second consecutive drop in dairy prices overnight, although not large, is getting analysts concerned about the 2017/18 payout level. The expected firming is not arriving. It has prompted economists to drop their forecast milk price from $6.75 to as low as $6.30.

KEY APPOINTMENT
ANZ NZ, the country's biggest bank, is to get ex-PM John Key as its local board chairman from January 2018.

WHERE THE JOBS ARE
The number of online job advertisements remained steady with an increase of +9.6% in September 2017 from the same month a year ago, according to the latest Ministry of Business, Innovation and Employment (MBIE) Jobs Online report. They report the largest occupation increases were for labourers (up +27% in a year) and machinery drivers (up +28% in a year). In contrast, managers only saw a +3.8% rise, and professionals saw a +5.4% rise in demand.

OUTSTANDING PERFORMANCE
The NZ Super Fund has reported at +1.66% return in September 2017 from August, and a +19.2% return over the year to September. This is an before-tax, after-fees return and far above its benchmark, and that is up from the +12.5% gain it has shown in the past three years. Since inception 14 years ago (2003), the Crown has contributed $14.9 bln and from that the fund managers have earned another $27.7 bln in gains, and out of that has paid the Crown back $6.1 bln in taxes. By any measure this is outstanding - and yet the Auditor General State Services Commissioner thought the NZSF boss was not worth what he is being paid. Fortunately the NZSF board ignored the Auditor General's advice.

LATE GAINERS
Australia reported its updated life expectancy (at birth) data today. That shows Aussie females can expect to live to 84.6 years and males to 80.4 years. The equivalent NZ expectation is 83.4 yrs for females, and 79.9 yrs for males. At aged 65, an Australian female can expect to live to 87.3 years while a male can expect to live to 84.6 yrs. (NZ equivalent numbers are 88.6 yrs and 86.2 yrs. So, it seems at retirement you can expect to live at least a year longer in New Zealand, even if at birth we start behind the Aussies.)

IGNORING THE LAW
And staying in Australia, Melbourne's James Packer-owned Crown Casino altered poker machines to get around regulations and lower returns to players, and large transactions were hidden from money laundering authorities, former staff allege in sensational and damning evidence tabled in the Australian Federal Parliament.

WHOLESALE RATES REVERSE
The rises we reported here yesterday at 4pm subsequently evaporated in late-day trade as offshore influences grew. And today, we have seen the long end decline further by up to -3 bps. The 90 day bank bill rate is unchanged at 1.93%.

NZ DOLLAR UNCHANGED
The NZ dollar is holding at 71.6 USc. On the cross rates we up a little at 91.3 AUc and 60.9 euro cents. The TWI-5 is still at 74.4. The bitcoin price has dipped -3% today to US$5,484.

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8 Comments

ANZ NZ, the country's biggest bank, is to get ex-PM John Key as its local board chairman from January 2018.

Why would he want to oversee what is in essence a building society gouging money from Kiwis to remit it back to Australia? ANZ along with it's cohorts relies on the RBNZ to be the arbitrage market maker in the forex forward market because they see no value in such commitment.

The same can be said about most large global banks. Read more

"Why would he want to oversee" - Probably because he will be paid somewhere between $200K - 300K pa for attending 12 board meetings a year. I do totally agree with your analysis of ANZ and the other Aussie banks.

for attending 12 board meetings a year

Closer to 8 board meetings a year. The ANZ doesn't have a board meeting every month.

LOL - missing the PM's salary already? I doubt it given claims a large percentage was donated to charity.

I don't recall him ever making that claim. It was folk lore.

The online report clearly suggests how poorly the NZ economy would perform in the absence of low-skilled migration with a 27% rise in labour vacancies. What downward spiral have we got ourselves into?

One that will increase our productivity and force us to do more than just build and sell houses to each other. Pretty simple stuff really

By any measure this is outstanding - and yet the Auditor General State Services Commissioner thought the NZSF boss was not worth what he is being paid. Fortunately the NZSF board ignored the Auditor General's advice.

Outsize returns imply outsize risk - not the way government pension plans are meant to be funded. Let's make Mr Orr aware that risks work both ways when hard earned citizen underpinnings are at stake. His type of salary is more appropriate for private sector funded endeavours, where all interested parties can afford the losses or at least are aware of the chances of their arrival.