What happened Friday

A review of things you need to know before you go home on Friday; more hot mortgage rates, regional drive, dairy price signals up, population close to 5 mln, PMI recovers, swaps slip, bitcoin jumps, NZD goes sideways

16th Feb 18, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
This morning ASB came to market with a hot 4.30% one year fixed rate. And later, TSB came with a 4.39% two year rate. Both beat all their rivals for those terms except HSBC Premier.

TERM DEPOSIT RATE CHANGES
No-one has made any term deposit rate changes today.

REGIONS REALLY IMPRESS
Data out today on the amount of ready-mixed concrete poured in the December 2017 quarter showed a +4.2% gain over the same quarter a year ago. It is more impressive when you consider the Auckland region had a -10.4% fall over the same period (the Waterview Tunnel is now complete and the Central Rail Loop is only now just ramping up). Wellington recorded a +4.5% rise off of a small base, and Christchurch recorded a -12.1% drop as the quake rebuild winds down. What is really impressive is how the regions are stepping up. Northland is up an amazing +23%, Waikato and the Bay of Plenty are up +15% as is the Hawke's Bay. The Manawatu is up +11% while Otago and Southland are up +17%. Regional momentum is very impressive reflecting a payoff from years of preparation.

NON-AUCTION TRADE SIGNALS STRONG
This morning's release of the USDA assessment of Oceania dairy prices (direct trade deals) reflected the signals in the last GlobalDairyTrade auction - only more. Their review shows stronger rises across all main dairy commodity products. Unfortunately, trading today in the derivatives market doesn't show a similar strength.

ALMOST THERE
Our population increased by +97,000 in the year to December, reaching 4.844 mln, a rise of +2% over that period. That is the slowest rise in two years. At this rate, we will reach 5 mln in less than two years, even with a further slowdown. Our estimate is that the 5 mln level will be reached in September 2019 sometime. General conversation should now switch to saying "New Zealand's population is just under 5 mln". It will have taken 16½ years to rise that last million. It took 31 years to go from 3 mln to 4 mln. The current median age is 36.9 years and that has now been falling for 4 straight years. Our median age is now the same as it was in 2010. That demographic shift is very healthy for our social sustainability. In hindsight, even though we didn't actually have an explicit one, our defacto population policy has served us remarkably well.

RECOVERY FROM A DIVE
After diving in December, the January factory PMI recovered strongly to 55.6, reflecting healthy expansion in the sector and taking levels back above the 53.4 recorded in January 2017. Of some concern however is that firms were not hiring even if they are seeing good order and delivery levels.

NOT SO POPULAR
The trend since May 2016 when 61.9% of NZ Govt securities were held by foreigners has been for a decline in that level. And the latest data shows that trend continuing. As at January, that level is now 54.9%.

BENCHMARK INTEREST RATES SLIP
After yesterday's strongly steeper shift, today they have eased back. Rates 1-4 years are down -1 bp, and rates longer out to ten years are down -2 bps. The UST 10 yr yield started the day at a high 2.92% and has been up as high as 2.94% and down as low as 2.88%. But now it is at 2.90%. The great bond repricing is a volatile thing on a day-by-day basis. The Aussie 10 yr is now at 2.90% (down -2 bps). The Chinese 10 yr is at 3.90% (unchanged), and the Kiwi 10 yr bond is 3.01% (down -4 bps). The 90 day bank bill rate is back up +1 bp at 1.91%.

BITCOIN IS BACK
Bitcoin is now at US$10,162, up another +8% from this time yesterday. It has held above US$10,000 for the past nine hours.

NZ DOLLAR SLIPS SIDEWAYS
The Kiwi dollar has settled back after testing 2018 highs this morning. It is currently at 74 USc, at 93.2 AUc and 59.1 euro cents. That puts the TWI-5 at 74.5 which is very similar to the level at this time yesterday.

This chart is animated here. For previous users, the animation process has been updated and works better now.

Daily exchange rates

Select chart tabs

Source: RBNZ

Source: CoinDesk

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

17 Comments

by Lapun | 16th Feb 18, 4:22pm 1518751338

Surely this is news: Professor Anne-Marie Brady concerned break-ins linked to work on China
http://www.nzherald.co.nz/front-page-top-stories/news/article.cfm?c_id=…
Of course it could just be coincidence!

by David Chaston | 16th Feb 18, 4:41pm 1518752505

Agree. That is important, and worrying.

by workingman | 16th Feb 18, 5:39pm 1518755990

I suspect our political leadership and related institutions are now so compromised and anxious to avoid the least upset in our supposedly close relationship, our 'Comprehensive Strategic Partnership', that interest or investigation into such illegality and academic interference as this will be quietly 'made to go away'. But, of course, China may have nothing, absolutely nothing, to do with it.

by sharetrader | 16th Feb 18, 8:23pm 1518765805

it has not gone unnoticed on here about ex government ministers of a certain party being appointed to boards of companies of Chinese boards once they leave parliament, what we dont know is it as a reward or for having connections in wellington,

by frazz | 16th Feb 18, 6:18pm 1518758285

I wonder if any one will be surprised if Bill English is offered a plum board position for some related Chinese bank or related company?

by J.C. | 16th Feb 18, 6:39pm 1518759561

Would think he's better qualified than Jenny Shipley. Perhaps he could do some consulting on traditional family value for the Australian govt.

by Alter Ego | 16th Feb 18, 6:51pm 1518760317

New Zealand was sold out by certain people to certain people, nothing more certain

The certain latest news above is actually history, as certainly as this lady found out. It has certainly not been the first time.

This has all been going on for many years , of that I am certain.

That certain people have been denying the obvious, but taking certain close relationships to the nth degree, to me is certainly obvious.

As one is certainly using certain Political persuasions to certainly benefit themselves over others is certainly apparent.

That some of them are certainly in bed with certain Nations, causes some, some certain worries, myself included.

We need trans-parency and certainty a close eye on future relationships to ensure that certain break through s are not aware of these break-ins and certain other things, including white washing and Laundry procedures.
A certain fact of life, in certain Countries world wide.

This has certainly been a one eyed and certain factor over certain peoples Political maneuverings over recent "certainly worrying" rises in certain peoples certain fortunes.

If one can certainly add up, what is upsetting is that certain ramifications over certain countries open door policies are not safe, even when locked in and supposedly safe from prying eyes.

Well done Professor Anne-Marie Brady, we certainly think you are on the write track. Perhaps you should certainly send it World Wide...ASAP.

Facebook it even...it would certainly help to increase your followers to know, what is certainly a factor in spreading the word...But I cannot possibly comment...with certainty.

As that might upset..certain people.

by Andrewj | 16th Feb 18, 7:02pm 1518760968

"The Chinese banks seem to have adopted a politically oriented strategy in New Zealand, as former Prime Minister Dame Jenny Shipley is the chair of China Construction Bank (New Zealand), former National Party and Act Party leader Dr Don Brash is chair of Industrial & Commercial Bank of China (New Zealand) and former Napier National Party MP Chris Tremain is chair of Bank of China (New Zealand). Ruth Richardson, a former Finance Minister, is also on the Bank of China (New Zealand) board."

by Camel's back | 16th Feb 18, 8:10pm 1518765053

Almost there... Personally I don't share your enthusiasm for a larger population. In my opinion it has diminished the great way of life we had. I am old.. but young enough to have missed the wars, so I have seen what I think was the best of NZ..
like the family collecting shellfish for dinner (in Auckland) walking the tracks and staying in the huts, putting up the tents by the beach and leaving the house and the morris oxford unlocked at night.
Now the shellfish are toxic, the tracks are booked up and the beaches are subdivisions.. So if you think you are handing the future generations a "better" NZ by increasing the population then.. good on you mate

by sharetrader | 16th Feb 18, 8:25pm 1518765916

yes as soon as we hit 5 mil it should be only one in when one leaves

by Kauri | 17th Feb 18, 8:32am 1518809563

The recent rapid increase in population has pretty much locked in 6 million by 2050 by natural increase alone. With ongoing rapid inwards migration (which seems to be the only economic plan by recent governments, including current one) 6 million by 2040 or earlier.

by Lapun | 16th Feb 18, 9:39pm 1518770381

You are right. If it had grown because we had developed new export businesses then that might have been OK but our rural exports have remained pretty good with ever increasing productivity as technology is replacing rural workers. Many Kiwis have moved to Australia and we have replaced them with immigrants working in service industries - a minority of whom are skilled and strongly motivated to become 'real kiwis' and a majority low skilled, low paid and just desperate to leave their place of origin with little attachment to the traditional Kiwi culture of fairness, freedom and honesty.
NZ has roughly the same sized economic pie but we are sharing it with twice as many mouths. In the OECD economic league table we are now overtaken by Slovakia.

by Kauri | 17th Feb 18, 8:24am 1518809054

Too right. Not too mention poor productivity and very low GDP per capita increases (often less than Japan with its falling population). I cannot see any benefits from increased population.

by Lapun | 16th Feb 18, 9:43pm 1518770616

"" The current median age is 36.9 years and that has now been falling for 4 straight years. That demographic shift is very healthy for our social sustainability."" Age does teach you something. It has taught me the younger they are the dumber they are (maybe a generalisation).

by PocketAces | 16th Feb 18, 10:21pm 1518772883

"Our median age is now the same as it was in 2010. That demographic shift is very healthy for our social sustainability. In hindsight, even though we didn't actually have an explicit one, our defacto population policy has served us remarkably well."
The world is overpopulated, NZ is part of the world, ipso facto NZ is overpopulated. Time to address this, everywhere.

by John from Holland | 17th Feb 18, 4:19am 1518794365

NZ is far from over populated, there is a lack of good town or city planning in a few places (Auckland especially) that makes it feel over populated.

Good design would help maintain a high quality of life for all New Zealanders, whether they are old or new.

BTW. There are plenty of places in NZ that are emptying out, these are actually the very places where you can still live a life similar to 50 years ago (however there are still no real jobs available there, same as 50 years ago)

by PocketAces | 17th Feb 18, 6:51am 1518803510

Again, the world is overpopulated and NZ growing its population only adds to the problem