Here are the key things you need to know before you leave work today:
MORTGAGE RATE CHANGES
No rate changes to report today.
TERM DEPOSIT RATE CHANGES
None here either.
RISING YIELDS, RISING DEMAND
The latest $150 mln nominal NZ Government bond tender today for 2033s (15 year bonds) brought a weighted average accepted yield of 3.34% which is 8½ bps higher than a month ago and +35.8 bps higher than 18 months ago. There is still very good demand however at these yields with the coverage ratio up to 3.2x from 3x last month.
HIGHER USE, HIGHER RESPONSIBILITY
Total billings on New Zealand issued credit cards in January were +8.1% higher than the same month a year ago. Balances outstanding are up +5.7% in the same period. But we are apparently making much more of an effort to pay our credit card balances more promptly. As at December 2017, 60.4% of all balances incurred interest. That is the lowest level ever recorded since this data started in July 2000. Just one year ago it was 62.2%, and five years ago it was 64.8%. It peaked at 76.1% in January 2001.
VERY STRONG I
Guardians of NZ Super say the Fund stood at $37.9 bln as at December and has returned an average of 10.5% pa, after costs, since its inception in 2003. It returned 19.8% after costs during 2017.
VERY STRONG II
Moody's today raised its Transpower long-term senior unsecured rating to Aa3 from A1. (You can see how those Moody's grades compare with S&P and Fitch here.) Essentially its a shift from 'Strong' to 'Very Strong'. The outlook remains stable.
ROBO ADVICE COMING
The FMA has opened for applications from providers "seeking to offer personalised financial advice to consumers through digital tools and platforms" (so-called robo-advice). Digital advice is automated financial advice generated by computer program using algorithms which is usually delivered through a website or a software application.
PRODUCTIVITY IMPROVES
New Zealand’s labour productivity rose +0.9% in the year ended March 2017. Growth in the workforce saw labour inputs for the measured sector increase +2.9%, while the economy expanded +3.8%. Labour productivity measures the quantity of goods and services (output) produced for each hour of labour. The improvement comes at a time of high net migration (suggesting new workers are more productive than existing workers). Labour productivity has only ever declined one year in the past twenty years. The construction sector is delivering among the highest improvements in productivity. Capital productivity, which has lagged in the past, is now putting in some good consistent improvements. It was up +1.0% in 2017. The education and healthcare sectors are poor productivity performers. They feature volatile changes and over the past five years education labour productivity declined a net -3.8% and capital productivity declined a massive -11.5%. Health sector labour productivity rose only +0.8% in five years while capital productivity rose just +0.3% in the same five years. Both are hugely under-performing sectors even though the taxpayer has 'invested' $68.6 bln in those same five years in 'education', and $80.1 bln in 'health'. More money is just not producing more outputs at the same rate of increase - actually its not producing any output increases for 'health' and actually producing less outputs in 'education'.
BENCHMARK INTEREST RATES RISE
Wholesale swap rates are higher and steeper today. This follows the hawkish US Fed minutes release. The two year is up +1 bp, the five year is up +2 bps and the ten year is up +2 bps. The UST 10yr is up to 2.94%, moving up +4 bps as soon as the Fed document was released, and has stayed up. The Aussie Govt 10 yr is down -3 bps at 2.86% although most of that fall was in late trading yesterday. The China 10 yr is unchanged at 3.90% (they are still on holiday and markets there are all but closed). The NZ Govt 10 yr up +1 bp at 3.01%. The 90 day bank bill rate is up another +1 bp at 1.93% and that is its highest in over three months.
BITCOIN GYRATES MORE WILDLY
The bitcoin price is now at US$10,580 and that is a decline from this time yesterday of -US$1,400 or -11.8%. Bitcoin volatility is rising as the price trend is falling.
NZ DOLLAR STABLE
The Kiwi dollar is again marginally softer again today against the greenback at 73.1 USc, stronger against the Aussie at 93.8 AUc and little changed against the euro at 59.6 euro cents. That leaves the TWI-5 at 74.4 and anchored well within its 2018 range.
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4 Comments
DC - A perfect parable for the Fletchers B&I fate: sh1tstorm in the new Justice Precinct, Christchurch....
File under 'Laughing, but Weeping'....
My partner works for one of the Auckland DHBs.. As of this week the team is now onto the third "Acting Manager" since the last actual Manager left. And the description of a typical work day sure sounds like there are a huge number of meetings and consults and a mile of (virtual) paperwork on buggy IT systems and not so much time actually spent doing things to improve patients situations, in spite of a ballooning case load.
I have tried to do business in the health sector with IT stuff and from the outside looking in they seem quite between a rock and a hard place.
On the one hand they keep a tight focus on their core business, health outcomes. On the other hand this focus pushes IT down the priority list and undermines the ability of IT to reorganise their business for productivity gain.
To add to that, demand for their "product" is increasing at twice the rate of population growth, they are constantly subject to political football and their funding can't keep up with that increasing demand.
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