A review of things you need to know before you go home Friday; Kiwibank cuts two rates, goods trade deficit shrinks, butter slides, government finance stats released, swaps and NZD firm

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

MORTGAGE RATE CHANGES
Kiwibank has reduced two fixed rates, and ended its Samoa holiday promotion.

DEPOSIT RATE CHANGES
No changes here today.

TRADE RISES SURPRISINGLY STRONGLY
The merchandise trade balance for the year to October was out today showing a small fall to a deficit of -$2.986 bln and the first October year below $3 bln since 2014. The monthly trade balance was a deficit of -$871 mln or -19% of exports. The average monthly deficit in October over the last five years has been -$909 mln of -25% of exports. China was our top export customer in October taking $1.0 bln of goods, up a remarkable +35% on the same month a year ago. Exports to Australia were up strongly as well, up +17%. Exports to the USA slipped -17% to $336 mln in the month. The EU was our top import source based on machinery and cars which contributed to a +25% rise. We bought +10% more from China, +17% more from Australia, and imports from both the US and Japan were up by double-digit percentages mostly based on vehicles.

BUTTER SLIDES
And speaking of trade, the latest USDA dairy data out today shows a significant fall-back in the prices the market is paying for butter. We are now at a five month low, although butter prices are still US2,000/tonne above the point they started their upward track from US$3,500/tonne a little over a year and a half ago.

ECONOMY DOMINATOR
Statistics NZ's summary of the general government finances was released today showing a 2016/17 surplus of +$8.3 bln which is +3.1% of nominal GDP. Central government accounts for $7.2 bln and local authorities delivered a $1.1 bln surplus. Central government had operating costs of $86.9 bln in the year, up +3.6% and the fastest growth since 2011. (The new Government wants to increase that still further.) Local government cost $9.7 bln to run. Stats NZ record the total assets held by the Government at $397 bln of which $214 bln were non-financial assets. The ratio of general government net debt to nominal GDP decreased from 18.0% to 15.8% during the year ended June 2017. Net debt is now at $42 bln and the ACC claims liability is $40 bln. This ACC liability is the only social liability that is fully funded. All other social liabilities are wholly or partly unfunded. (In fact there are not even reliable estimates for most of them and they are not part of this data release..)

WHOLESALE RATES EDGE UP
Swap rates are up +1 bp across the board, for terms two to ten years. The 90 day bank bill rate is holding lower, at 1.91%.

NZ DOLLAR FIRMS, BITCOIN DOWN
The NZ dollar has again held on to its overnight gains at 68.9 USc. On the cross rates we are unchanged at 90.4 AUc and at 58.1 euro cents. That has the TWI-5 edging up to 71.6. In the absence of the American markets (which are on holiday) the bitcoin price is holding at $8,068 after briefily slipping under US$8,000 an hour ago.

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USD 
NZD
End of day NY time
Source: CoinDesk

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4 Comments

Today's RBNZ credit data showed no let up . 14 percent lower year/year , 21 percent lower two years. First home buyers although a higher percentage have gone nowhere in numbers. Exempts building up on the banks books, Barfoots have had another enjoyable week at the auction rooms, their November sales will be 25-30 percent lower than last year, lowest since 2008. Last time I looked its not 2008, never worry its almost Xmas.

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