Here are the key things you need to know before you leave work today:
MORTGAGE RATE CHANGES
BNZ raised its 2 year 'Classic' special fixed rate from 4.49% back to 4.65% today after a two week campaign.
TERM DEPOSIT RATE CHANGES
BNZ also cut three short term interest rates by -10 bps for TDs of 3, 4 and 9 months.
EYES ON DAIRY
Tomorrow will be a big day for dairy news, given that Fonterra will announce its half-year results. They will also hopefully give an update on the state of their Chinese Beingmate investment. But there will also be a dairy auction overnight and the derivatives market is still signaling a -4.2% fall in WMP prices in late pre-auction trading.
FARMS SELLING, BUT PRICES LOWER
Farm sales activity is stable. In February 2018 there were just 134 farms sold nationally. That compares with 131 in February 2017 and 115 in February 2016. Basically the number of arable and grazing properties sold are lower, while the number of finishing properties sold is rising. There is little change in the number of dairy units being sold but average prices/ha are well down. You can find regional prices/ha here for February 2018.
The quarterly Westpac consumer confidence data was out today and that basically confirms what we have been seeing in the monthly ANZ series. There has been a recovery post-election but the levels we have had over the past two years are basically holding at a positive elevation.
SEVEN YEAR LOW
The number of lifestyle blocks being sold is trending lower quite quickly. In February 2016 there were 724 such blocks sold nationally. A year later the Feb-17 volume was down to 645. This year, the number is only 528. The biggest declines are in Auckland where only 50 were sold, the lowest level of any month since January 2011 and less than a quarter of the level sold in March 2016.
ONLY JUST LATE
Late payments by companies in New Zealand are almost a non-issue, according to Dun & Bradstreet (although now calling themselves "illion" ??!! after a private equity firm bought them out). Their data shows the average late payment at 5.8 days as at December, compared with 5.3 days at the end of 2016. That is down from 18.6 days late in 2010. Smallish Auckland manufacturers however pay 16.8 days late, the worst group in the country. In Australia, their average is 11.9 days.
The value of all residential properties in Australia reached AU$6.53 tln in December 2017 according to official data. That is a rise of +5.9% in the year and compares with a +9.2% rise in 2016. 40% of all that value is in NSW, 28% is in Victoria, and 15% in Queensland. The AUS$6.53 tln value represents 3.6 times its nominal GDP. We will get an update of the New Zealand levels in late June, but these are likely to show our residential housing valuation at 3.75 times nominal GDP.
"HIGHER RATES ARE COMING"
The latest minutes from the RBA reveals that they think pressure from the US economy, and the US Fed reactions to that, will set the scene for rises in official Australian interest rates. They see rising fortunes in Australia too. "Over 2018, GDP growth was expected to exceed potential growth and CPI inflation was expected to increase gradually to be a little above 2 per cent." Interest rate markets reacted by nudging market rates higher.
BENCHMARK INTEREST RATES SOFT
Wholesale swap rates fell back by -2 bps across the curve today. The Aussie Govt 10 yr is down -1 bp to 2.70%. The China 10 yr is up +1 bp at 3.84% and the NZ Govt 10 yr is down another -3 bps to 2.86%. The 90 day bank bill rate however is up +2 bps and now at 1.95% approaching a 6 month high. The bets are starting to build up that the RBNZ may be rethinking its OCR level, especially given Adrian Orr takes over the reins at the central bank in a week.
BITCOIN UP AGAIN
The bitcoin price up to US$8,505 another +3.8% rise today.
NZ DOLLAR UNCHANGED
The NZD has traded in a tight range today and is still at 72.4 USc. On the cross rates we are up marginally at 93.9 AUc (a six week high) and at 58.7 euro cents. That puts the TWI-5 at 73.6.
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