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A review of things you need to know before you go home Thursday; no rate changes, upbeat RBNZ, low housing confidence, weak Aussie housing markets, rising public sector workforce, swap rates jump, NZD firms

A review of things you need to know before you go home Thursday; no rate changes, upbeat RBNZ, low housing confidence, weak Aussie housing markets, rising public sector workforce, swap rates jump, NZD firms

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

MORTGAGE RATE CHANGES
No changes reported today.

DEPOSIT RATE CHANGES
None here either.

RBNZ EXPECTS GOVT POLICY TO BE MORE INFLATIONARY
The RBNZ reviewed its OCR today, leaving it unchanged. And the related Monetary Policy Statement was not really a market-mover either. But then, markets did move anyway (see below). It seems more confident the housing market will not take off again, sees lower dollar and predicts a slightly earlier start in 2019 to interest rate rises. They were a little more upbeat. Fiscal policy will take on heightened importance and this is expected to boost growth and inflation and influence monetary policy settings.

STILL NOT A GOOD TIME TO BUY
The latest ASB housing confidence survey showed the soft housing market push house price expectations to a 6-year low in the three months to October. Interest rate expectations eased after hitting a 3-year high earlier in 2017. On balance, respondents outside of Christchurch still think it’s a bad time to buy a house.

IMPULSE BUYING MADE EASIER
The Warehouse and Torpedo7 online are now offering the PartPay option, allowing customers to break payments into smaller, more manageable amounts while still receiving their purchases right away. PartPay claims "no fees and no interest"; the retailer pays the platform.

JUMPING SHIP
Xero is abandoning its NZX listing in favour of the ASX. This will cause issues for some mandated tracker funds, especially the NZX ones. The NZX50 was lower today.

PUBLIC TO PRIVATE
Auckland Council Group Chief Financial Officer Sue Tindal has announced that she is leaving the organisation at the end of 2017 to take up a role in the private sector. She is already a non-executive director at Mainfreight.

DOWN, BUT NOT OUT
Housing finance data out in Australia today looks a little grim and far below expectations. Finance commitments for owner-occupied housing is down -2.1% in September compared with the same month a year ago. Finance commitments to investors is down -6.2%. Observant readers will have noticed however that bank profits are higher. They got a free pass from their regulator to raise interest rates to investors (interest-only loans) and this is more than making up for the volume slippage. Unintended consequence.

SINKING
And maybe related, Australian auction clearance rates have fallen to the lowest level since early 2016, due mainly to weakness in Sydney. According to CoreLogic, a final clearance rate of 61.5% was recorded across Australia’s capital cities last week, down from 64.5% in the previous week.

CHINESE SMOKE SIGNALS
Chinese consumer inflation edged up to just under 2% in October, its highest level of 2017, but the signals are that the rise is losing steam. Producer prices are up +6.9% pa.

DID YOU KNOW ?
There are almost 2 mln public sector workers in Australia. That is as at June 2017 and is an increase of +1.5% or +29,000 in a year. 12% of them work for the Australian Federal government, 78% work for their State governments, and 10% of them work for local authorities. No doubt this is why State election sin Australia are so important. By comparison, in New Zealand we have 353,000 people working in the public sector. That is a slightly smaller proportion that in Australia. The education sector here employs about 108,000, the health sector another 69,000, 48,000 are working in our core Public Service, plus another 54,000 working in 78 Local Government authorities. 46,000 work in other Government entities. And 30,000 work in State Owned Enterprises. It is pretty clear now that with the new Government most of these numbers are about to rise.

WHOLESALE RATES JUMP
Swap rates jumped sharply following the RBNZ MPS. The two year swap is up +2 bps, the five year is up +6 bps, and the ten year is up the same amount. The 90 day bank bill rate is unchanged at 1.94%.

NZ DOLLAR FIRMS, BITCOIN UP
The NZ dollar is still oscillating around 69.4 USc although it firmed following the RBNZ press conference. On the cross rates we are at 90.6 AUc and at 59.9 euro cents. The TWI-5 is now up at 72.9. The bitcoin price is at US$7,320, a gain of +1.3% from this time yesterday. However in the past 24 hours this price spiked up to US$7,848 but that burst of enthusiasm didn't hold on confusion of the timing of another 'hard fork'. Nouriel Roubini has also chipped in calling bitcoin nothing but "a gigantic speculative bubble".

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

Daily exchange rates

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Daily benchmark rate
Source: RBNZ
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Source: RBNZ
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Source: RBNZ
End of day UTC
Source: CoinDesk

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8 Comments

Up to 11,473....

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Maybe, but ...
https://www.interest.co.nz/images/residential-property-listings.jpg

in the grand scheme of things it has a long way to go before we are back to 2007-2012 levels and we came through that ok.

I will take notice when it is over 14,000 in Auckland. Then it might be getting interesting.

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REINZ current listings 37262, Auckland 12834. The highest $ stock of property available , ever. We came thru 2007-2012 ok, by dropping interest rates to historic levels and adding an additional 100 Billion in mortgage debt. Truly a "grand scheme". The RBNZ ensured financial stability. Anyone attend Barfoots North Shore auctions today.

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I’m not sure the GFC should be the benchmark.

My theory is that there are a lot of owners who would like to sell but don’t like the market. They are holding back on the hope of a recovery. Things will get interesting if that hope fades. Remember they haven’t seen the reality of Labour changes yet, particularly the tax change.

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In any market it is not the number of items for sale it is the number of buyers - even in a market where there is one item for sale the market is flooded if there are no buyers.

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P'raps ASB is channelling LOTR ....https://www.youtube.com/watch?v=HoZxdS5K8E4

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The problem has certainly been "Fixed" //Compounded// Has no Parallel, in History.....//

Slash and burn...Inflate the balloon, all hot air, wait till it cools...Inflation will take care of any debt.

Borrow to the hilt, all will be forgiven....pass the Buck, rinse, repeat..it is only Houses...cannot lose, get on the ladder, stocking trade, buy yer way in, work yer way out. No sweat. No probs.

Rise to the occasion...or rent till yer drop, tax free...naturally. Capital idea...eh.

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David, you forgot to mention you are taking a hammering on greaterauckland blog.

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