Here are the key things you need to know before you leave work today:
MORTGAGE RATE CHANGES
No changes to report here.
TERM DEPOSIT RATE CHANGES
No changes here either.
The tourism boom has seeded a spike in rental car sales which gave car sales figures a real boost in December, helping 2017 achieve all-time records. SUV sales won a massive 57% market share in December.
HOME OWNERSHIP RATE FALLING
The latest tenure estimates from Statistics NZ confirm the trend of falling home ownership rates and rising rentals. New Zealand's home ownership rate is now 62.8% as at December 2017, down from 64.8% five years ago and 66.3% ten years ago. Twenty five years ago (that is, a generation ago) it was 72.7%.
HIGHER RATES COMING
Chinese economists are talking up the likelihood of interest rate rises there this year. Now that officials and State media are adding to the talk, that makes it almost a certainty.
There has been a surprisingly strong rise in building approvals in Australia for apartments (dwellings not houses). They are up +37% in November from the same month a year ago. Building consents for houses are up just +1.7%. The very strong December is a positive end to a year that has been very weak. In fact, even including these November levels, the year to November is still lower than the equivalent prior year.
BACK TO NORMAL
New Zealand's hydro lake storage is running at 81% of average but inflows have picked up to 94% of average. The recent storm has done wonders for soil moisture and water storage levels that were becoming troublesome. Interestingly, we are 'below average' this year by about the same amount of 'above average' this time last year. It looks line the weak La Niña pattern has now faded and we are back to normal.
WHOLESALE RATES TREND UP
Swap rates are firmer again today up +2 bps across all durations 2 to 10 years. The 90 day bank bill rate is up +1 bp to 1.87%. In China, their sovereign 10y yield has slipped -2 bps today to 3.93%. Their two year has dipped as well, so they are holding on to their new expanded 2-10 curve. The NZ Govt 10yr yield is up another +3 bps today at 2.81% and that is a gain of +10 bps in twelve trading days..
NZ DOLLAR HOLDS
The NZ dollar has held on to its 71.8 USc level against the greenback which is making a bit of a comeback today. On the cross rates we are at 91.5 AUc and 60 euro cents. This puts the TWI-5 at up at 74.1. In contrast, the bitcoin price is at US$15,215 after having got down as low as US$13,980 this morning. But as at now the decline is 'only' -US$800 or -5%.
You can now see an animation of this chart. Click on it, or click here.