Here are the key things you need to know before you leave work today:
MORTGAGE RATE CHANGES
No changes today.
TERM DEPOSIT RATE CHANGES
UDC have trimmed some term deposit rates for terms of nine, twelve and eighteen months.
A SMALL BOUNCE-BACK
This is the nub of today's business confidence report from ANZ, in their own words: "Headline business confidence has traversed the dip. A net 19% of businesses are pessimistic about the year ahead, versus 38% in December. All five sectors improved this month with retail firms the closest to a positive outlook at -4%. Firms’ views of their own activity (which has the stronger correlation with GDP growth), lifted from +16 to +20. It’s hardly a gold medal performance, given the historical average is +28, but it is no longer skating on thin ice."
DOWN BUT CHINESE NEW YEAR DEPENDENT
For the first time in five years, total overseas visitor arrivals in January were down on the same month a year before.. This change mainly reflected a drop in arrivals from China. In January 2018, total overseas visitor arrivals numbered 379,200, down 1,800 from January 2017. Chinese New Year, a peak holiday travel season, was in late January in 2017, but in mid-February in 2018, which likely influenced the timing of monthly arrivals from China to New Zealand.
HIGHEST JANUARY EVER
The annual net gain from permanent migration was down -1.6% to 70,147 in the year to January 2017. But that masks the fact that the January 2018 level is the first year-on-year rise since the election (+1.6%). In fact, the January 2018 net migration of +8,577 was the highest January ever, or more accurately since 1921, 97 years ago when this data starts.
MORE HOMES FOR SALE
Data out from realestate.co.nz shows that the stock of homes for sale is up compared to a year ago in several main centres even though the flow of new listings has dwindled. But at current sales levels, the number of weeks this inventory represents is slightly softer at 15 weeks. The regional variances are large however.
DEBT WINNERS, DEBT LOSERS
New lending for first home buyers was up +22% in January 2018 compared to the same month a year ago. But new lending for investors was down -7.2% on the same basis. Overall, the value of new lending for housing was up +4.6% driven mainly by existing owner-occupier borrowing which was up +6.0%. Only investors seem to be being squeezed out.
OUR BIGGEST LA REPORTS IN
New Zealand's biggest local authority, Auckland Council, reported its December 2017 financials today. It reported an operating surplus before gains and losses of $1.053 bln, against the 31 December 2016 surplus of $0.966 bln. This is after tax, and after other valuation gains of another $0.976 bln. It's debt rose by +$277 mln in the last six months to $8.2 bln. In the same six months, its assets rose by +$1.8 mln to $49.2 bln. The Council’s credit ratings of AA (stable) from Standard and Poor’s and Aa2 from Moody’s were reaffirmed in October 2017.
SPENDING WHAT WE DON'T HAVE
Of all the sector debt numbers reported by the RBNZ today for January, the consumer debt growth stands out. Other sectors have stable and low debt growth, but consumer debt is now growing at the rate of +8.8% pa, and a rate of growth we haven't seen in almost 13 years. Interestingly, consumer debt growth peaked in the 1999 to 2008 period at a remarkable +14.4%pa rate. That was the period of the Clark-Cullen Labour government.
KICKED RIGHT UPSTAIRS
John Key, who is now ANZ NZ's chairman, was appointed to the ANZ Group board of directors today. That's another AU$240,000 in director's fees. (As Prime Minister his salary was NZ$471,049, plus a tax-free allowance of NZ$22,606. He donated his salary as PM to charity, a practice that hasn't been adopted since.)
In a worrying sign, the official Chinese factory PMI data slumped for February, far below January and far below analysts expectations. This tends to be a measure of large SOEs and they don't seem very confident about life under their recently anointed great Leader "人民领袖". Worse, if you just look at the medium and small business component of this official data they were both below 50 (that is contracting) at 49.0 and 44.8 respectively. Tomorrow we get the Markit survey which tends to focus on mid-range enterprises other than SOEs so it will be watched with extra interest. (As this is a sentiment survey, it has little to do with how Chinese New Year falls as some misguided [American] analysts seem to suggest.)
BENCHMARK INTEREST RATES FIRM
Wholesale swap rates are up a little further today. The two year is up +1 bp, the five year is also up +1 bp and the ten year is up +2 bps. The UST 10yr is up +3 bps at 2.90%. The Aussie Govt 10 yr is up +1 bp to 2.77%. The China 10 yr is also up +1 bp to 3.90% while the NZ Govt 10 yr is up +2 bps to 2.97%. The 90 day bank bill rate is unchanged at 1.92% today.
The bitcoin price is now at US$10,655 or +3.5% higher than this time yesterday.
NZ DOLLAR SLIPS
The Kiwi dollar fell overnight on yesterday's poor trade data and hasn't bounced back at all. It is now at 72.3 USc, at 92.9 AUc and holding against the euro at 59.1 euro cents. That puts the TWI-5 just under 73.7 and slipping. The lack of a bounce-back in today's business confidence data isn't helping our currency either.
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