Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes reported today.
DEPOSIT RATE CHANGES
No more changes here either.
A SUDDEN TURN NEGATIVE
Business confidence has turned sharply negative. ANZ says the finger can be pointed at political uncertainty. However, other survey indicators held up better and still provide robust growth signals, though a tempered mood is clearly apparent. There are some real economic reasons for that, on top of political uncertainty. Prospects for the economy now look more "delicately placed" says ANZ, a pc way of putting it.
GOING THE WRONG WAY
The housing crisis has worsened after a fall in new dwelling consents in September. New consents dropped -12.5% nationwide last month and slumped -26.7% in Auckland from August. But year-on-year they are up +8.6% and +15.4% respectively. Nationally, consents for houses were down -2.6% year-on-year, were up +101% for apartments, and up +8.7% for townhouses.
SOLID BACKLOG
Consents for non-residential building held up better than expected in September, with consent values coming in at $430 mln. Consents were up +7.4% from September 2016 despite there being no large projects valued above $25 mln in the month. This growth was felt throughout the upper North Island and indicates that underlying activity in the sector is solid.
ONCE OVER, LIGHTLY
Prime Minister Ardern is to visit Australia to shore up what she says "is New Zealand's most important" relationship. However, she is not spending much time there to reinforce that view; she leaves Sunday morning and will be back here Sunday evening.
NEW ASB APP POOLS ONLINE BUSINESS TOOLS
A new ASB mobile app, 'PLUS by ASB', aims to bring together well used online business tools in one place reducing users' time spent switching between business software. ASB says PLUS - which is supported by VISA - is a free, open platform, meaning anyone can use it regardless of who they bank with. The initial release is aimed at retailers and SMEs.
NZCU BAYWIDE GROWS ASSETS +6%
Credit Union NZCU Baywide has revealed its June year financial results. Total assets grew +6% to 312 million, the operating surplus fell to $1.2 million from $2 million, reserves stand at $39.9 million, and loans to members grew 26% to $267 million. The reduced operating surplus was attributed to investment in a new core banking system and tighter interest margins.
MORE STRIKES
Union members at the Fletchers owned company, Firth Concrete have walked off the job again today in an attempt to achieve wage parity with other operators in the industry. They say they are paid $5/hour less than competitors. Given the regional shortage of truck drivers, it is hard to understand why they don't just apply for better paying positions. Maybe there is more to it in their claims. Firth/Fletcher don't seen threatened.
MORE LAND AGENTS
New data out from the REAA shows there were +547 more real estate agents and agency offices in the country in September than the same month a year ago. That total is now 15,869 of which 7,150 (or 45%) are in Auckland, but a year-on-year rise of just +108.
MORE NZD BONDS
China Construction Bank NZ, rated A1 Stable (Moody’s) / A Stable (S&P Global), has launched a new NZ$75 mln Fixed Rate Note. The issue has a tenor of 5 years with an indicative margin of 1.35% - 1.45% over swap. On todays 5yr swap rate of 2.62%, that puts the likely yield at between 3.97% and 4.07%.
IN GOOD SHAPE
Moody's is giving the New Zealand banking sector a good grade. "Asset quality will stay strong, supported by robust domestic economic conditions, low interest rates and a recovery in milk prices," they say. "Capitalisation will remain healthy, because credit growth is poised to moderate and regulatory capital requirements may tighten".
INDEBTEDNESS RISING SLOWER
Housing debt rose by +$1.1 bln in September from August, the slowest rise for any September since 2014. Clearly a pre-election slowdown. Year-on-year that is +6.4% which is the lowest such rise in 25 months. Business debt is rising at a +5.5% pace, rural debt at a +2.6% pace, both representing slowdowns.
INDEBTEDNESS RISING FASTER
Consumer debt however is rising faster. In September is was up +7.2% from the same month a year ago, the fastest pace in almost three years. But it is this type of debt incurred with non-banks that is the real story here, up almost +9% year-on-year.
BANK DEPOSITS GROW FASTEST
Household deposits at banks rose by +$1.1 bln in September from August and are up +7.7% from the same month a year ago and the fastest rate of growth in more than a year. They now total $162.9 bln. Deposits at banks are growing at a faster rate than bank lending.
STRUGGLING
New home sales slumped in September in Australia to about 5,700, which is a very long way lower than the 7,700 sold in the same month a year ago and the 6,300 sold two years ago, according to data released by their housebuilding industry organisation.
A VERY BIG EXPOSURE
New data out in Australia today shows they have a foreign currency exposure of AU$1.1 tln to the rest of the world. This review is only done every four years, and as at March 2017, they rose +70% in that period before derivatives are accounted for. Surprisingly, derivative activities tame things down. The real exposure is in corporate balance sheets.
WHOLESALE RATES SLIP AGAIN
Swap rates are following Wall Street further lower today. The two year is down -1 bps, the five year is down another -4 bps and the ten year is down another -4 bps. The 90 day bank bill rate is unchanged at 1.94%.
NZ DOLLAR UNDERMINED
The NZ dollar made an effort to rise in the past 24 hours, but it has come to nought and we are now back trading here we were at this time yesterday, at 68.6 USc. On the cross rates we are at 89.3 AUc and recovered to 58.9 euro cents. The TWI-5 is still at 71.7. The slumping business confidence data took a quick toll in currency markets. The bitcoin price has held above over US$6,000 again, and now it is at US$6,126, a +1.6% gain on the day.
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8 Comments
Deposits at banks are growing faster than bank lending.
The new RBNZ s10 data series reports net loans and advances rising faster than net deposits for the most recent month over month time frame and the four month comparison.
Did Barfoots just have a tough day in the auction rooms.. Surely there's an agent,assistant to the agent , PA to the agent, mortgage broker, auctioneer, vendor or amused individual out there, that attended the auction rooms,like the ones that used to report . Talking of Moodys ,2007 was the year Moodys upped the Irish banks ratings. Anglo Irish in 2007had only impaired loans of less than 0.5 percent, record profits. By 2008 it was stuffed.
One has to laugh , the economy is now 'delicately placed ' .............. like a youngster with a hangover, especially after the wild spending binge that has been the primary feature of the recent boom.
What did a previous Federal Reserve Chairman once say about a turn in the economy ?
" Taking the punchbowl away , just when the party gets going "
Hey Cowpat,
I observed the B&T auction in North shore 19th Nov (last Thursday). Mood was somber, tense even. More RE agents than bidders I counted. 2 rows of foreign buyers only. Much torturous drawn-out haranguing of bidders by the auctioneer and his flunkies to bring their bids up but I reckon overly high price expectations was the key feature. I didn't see anyone in hurry to put their properties on the market when bidders were close to reserve.
Now that Jacinda and co have expelled foreign buyers and non -citizens from our shores, some Auction rooms will go back to serving plain water instread of Peony , nescafe coffee instead of Yunnan coffee and ordinary tea instead of Green tea .
In fact the auction system may just collapse completely if we cut the number of migrants down to just 10,000 instead of 80,000 per annum
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