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A review of things you need to know before you go home Tuesday; TSB's hot 3yr rate, compounding underbuilding, AI banking app, cheap covered bond rate, Hugh's truism relearned, swaps flat, NZD firms

A review of things you need to know before you go home Tuesday; TSB's hot 3yr rate, compounding underbuilding, AI banking app, cheap covered bond rate, Hugh's truism relearned, swaps flat, NZD firms
24th Oct 17, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
TSB Bank changed launched a 4.79% three year 'special' yesterday, in case you missed that.

DEPOSIT RATE CHANGES
No TD changes today.

LOWER PRESSURE, BIGGER PROBLEM
New Stats NZ data out today has shown that the population pressure have eased slightly in Auckland, even from migration, but that the new house building pace is still too slow to cover even that. Migration accounted for two thirds of Auckland's population growth in the year to June. But in the past six years the cumulative house-building shortfall is now approaching 25,000.

BANKING APP DESIGNED ON AI PLATFORM LAUNCHING
Fintech company Douugh says it's launching a personal banking app designed "from the ground up" on an Artificial Intelligence platform in New Zealand and is seeking beta testers. Those involved with Douugh include Steve Bellotti, ex-managing director of global markets and loans at ANZ Australia, and Simon Pomeroy, the former head of digital and chief transformation officer at Westpac NZ.

CHEAPEST 7YR COVERED BOND
ASB borrows €500 mln through a covered bond issue that secures 'the lowest price achieved for a New Zealand issuer in a seven-year covered bond'.

MORE SECURITISATIONS COMING
RESIMAC Home Loans has mandated BNZ and Westpac to arrange a series of RMBS investor meetings. A New Zealand RMBS transaction from the Versailles program may follow subject to market conditions, they say.

POPULARITY WANING?
We monitor dairy farms for-sale listings and have been doing so since August 2015, so we have two full annual seasons of data now. What we are seeing is a slower rise in the number of dairy farms being offered for sale in October 2017 than in 2016, which was also lower than in 2015. Long term demand for dairy farms is slackening off, even if prices being paid (per ha) are holding. Lower volumes may of course be 'natural' as farm units get larger. We aren't testing for that.

RELEARNING LESSONS, FROM SYDNEY
Residential land costs in key markets have soared to a new high with vacant land in Sydney now over AU$1,000 /m2. The results are contained in the latest edition of the HIA-CoreLogic Residential Land Report. Get the land price wrong, said Hugh Pavletich many years ago, and everything else will be wrong for housing affordability.

WHOLESALE RATES UNCHANGED
Swap rates have changed little today, unresponsive to the rise on Wall Street over the weekend. There was a suggestion of softness in the four and five year terms, both off -1 bp today. The 90 day bank bill rate is unchanged at 1.94%.

NZ DOLLAR FIRMS
The NZ dollar has trended just a little higher as the day has progressed and is now up at 69.8 USc. On the cross rates we are at 89.3 AUc and 59.4 euro cents. The TWI-5 is still about 72.6. The bitcoin price is up +1% today to US$5,698, down -5.2% from this time yesterday and now well below the US$6,000 mark it surged though at the weekend.

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

Daily exchange rates

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Source: RBNZ
Source: RBNZ
Source: RBNZ
Source: RBNZ
Source: RBNZ
Source: RBNZ
Source: RBNZ
Source: CoinDesk

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9 Comments

by  jh  |  24th Oct 17, 4:26pm 1508815582

Mike Hosking is talking about a boom in Queenstown
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119…

However
A period of significant output within a population. The period is marked by productivity increases, sales increases, wage increases and rising demand. An economic boom may be accompanied by a period of inflation.
http://www.businessdictionary.com/definition/economic-boom.html

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by  bw  |  24th Oct 17, 4:56pm 1508817406

"Queenstown is your classic example of a boom town - in tourism and construction..." Quite right. But....Has Mike remembered what Queenstown looks like during a bust (You know, what happens to Boom towns from time to time!). Like the late 80's, and even the late 90's, when the 53 real estate agents in town sold 3 properties in one particular month...between all of them.....(NB: I've lived in, and owned businesses in Queenstown)

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by  BadRobot  |  24th Oct 17, 6:30pm 1508823014

Mike Hoskings seems delusional as ever, using Queenstown as an example - but the question that needs to be asked is who can afford to live in Queenstown. Simple maths. He seems to want to blame the new government while ignoring the actions or inactions of the previous government.

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by  bw  |  24th Oct 17, 6:34pm 1508823267

When you step off the plane from, say, London and are greeted by the mafia of real estate agent, developer and lawyer ( yep. They have a package deal all ready for you!) Queenstown is dirt cheap ( forgive the pun). It's only later on, usually after you've bought a thing or two, that you realise that is not cheap in local terms at all ( your correct assertion).....

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by  J.C.  |  24th Oct 17, 5:08pm 1508818111

NZX50 hit a new high as part of its routine. Happy days.

http://www.findata.co.nz/markets/stockquote/nzx/fnz.htm

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by  Stephen Hulme  |  24th Oct 17, 6:58pm 1508824699

Unintended consequences or just a culmination of sovereign wealth funds getting in on the action together with the Bank of Japan?

Japanese stocks’ record rally is so powerful that one of their most prominent buyers is sitting on the sidelines.

The Bank of Japan, which props up the equity market by investing in exchange-traded funds, has dramatically reduced its buying in October. That comes as the Nikkei 225 Stock Average boasts a 15-day winning streak, the longest run in history. The BOJ has spent 18 billion yen ($159 million) on ETFs so far this month, compared with an average monthly purchase of 505 billion yen in 2017.

The Nikkei 225 closed Monday at its highest since 1996, buoyed by Prime Minister Shinzo Abe’s landslide election win, U.S. shares at an all-time high, and the prospect for better-than-expected corporate earnings at home. As foreign investors return to a market they’ve previously shunned, the BOJ has slid into the background. Read more

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by  J.C.  |  24th Oct 17, 8:27pm 1508830055

Been a stellar run for the Nikkei, much like everything on the planet, except for the ASX.

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by  bw  |  24th Oct 17, 7:05pm 1508825153
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by  Andrewj  |  24th Oct 17, 7:38pm 1508827116
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