A review of things you need to know before you go home on Wednesday; a Co-op Bank cut, more job vacancies, failed sale win, coalface report, Govt debt up, swap rates jump, NZD holds

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

MORTGAGE RATE CHANGES
The Co-operative Bank cut its one year fixed mortgage rate to 4.29%, matching most challenger banks. Apart from HSBC Premier's offer, this is the lowest carded rate for this term.

TERM DEPOSIT RATE CHANGES
No changes today.

JOB VACANCIES RISE STRONGLY
According to the April MBIE survey, vacancies increased in nine out of ten industry groups. The largest contributors were the education and training (up +2.4% above March levels), and healthcare and medical (up +1.5). Vacancies increased in all eight occupation groups. The largest increases were for labourers (up +1.9), and community and personal services (up +1.5). Vacancies increased in all five skill levels. And they increased in all ten regions over the month, with the biggest increases in Gisborne/Hawke’s Bay and Waikato. Over the past year, online vacancies increased by +7.9%.

ANZ POCKETS $20M FROM FAILED UDC SALE
ANZ has disclosed a $20 mln "gain on UDC terminated transaction." This comes after the bank's plan to sell its finance company to China's HNA Group was blocked by the Overseas Investment Office. ANZ says the $20 mln stems from "cost recovery" in respect of the terminated transaction process. ANZ's now considering selling UDC through an IPO or trade sale.

MORE DEPARTURES FROM BNZ'S TOP TABLE
BNZ has announced another two departures from its executive team. The bank's director of products and technology, David Bullock, and director of customer fulfillment services, Martin Gaskell, will leave at the end of June. CEO Angela Mentis, who took the reins at the start of the year, says new executive appointments will be made in due course. The latest departures come after Richard Griffiths, director of transformation and enterprise performance, and David Maloney, director of strategy and planning, left in April. Their replacements are also to be announced in due course. In March Peter MacGillivray was appointed CFO after Mandy Rutherford withdrew from taking up the job. (Here is BNZ's full executive team).

FROM THE COALFACE
An April ANZ survey of its field officers and their clients portrayed an economy performing well but suffering some growing pains. "The construction sector remains extremely busy, but cashflow is an increasing problem, and Auckland is a very competitive market. The housing market is two-speed, flat in Auckland but strong elsewhere. There is plenty of cash looking for a yield. Some of it is finding its way into commercial property, causing a shortage in many regions. Retail remains a tough gig, with margins squeezed and difficulty pushing through price increases to the end consumer. However, there were exceptions: hospitality food and beverage prices are seeing some upward pressure, as are some wholesale prices. The services sector remains in good heart, as does agriculture, with climatic conditions improving over autumn and most commodity prices strong. Something of a gold rush is going on in kiwifruit and avocados. Tourism continues to boom, as does forestry. The labour market remains tight, and there is concern evident amongst business customers about the knock-on impacts of the increase in the minimum wage."

FARM DEBT MEDIATION BILL PASSES FIRST READING
NZ First's Mark Patterson is "delighted" a member’s bill designed to provide additional protection for financially stressed farmers has passed its first reading in Parliament. If passed into law, the Farm Debt Mediation Bill will require independent debt mediation before a receivership can start.

MORE DEBT, MORE FOREIGN OWNED
Data out today from the RBNZ shows gross government debt up +$0.5 bln to $82.2 bln. And the proportion of that debt held by foreigners is also up, now at 54.9% (up from 54.0%).

AUSSIE PAY GAINS
In Australia, their hourly rates of pay rose +2.6% in the year to March, but only +2.1% if bonuses are excluded. That's the second weakest rise in 20 years. Bonuses make up a larger portion of private sector pay than public sector pay across the ditch.

DOWN, BUT NOT OUT
Japan's economy shrank in the first quarter of 2018 for the first time in two years, ending the longest stretch of economic growth since the 1980s. The world's third largest economy contracted at an annualised rate of -0.6%, official data showed. Weak consumption came at a time Japan's export engine is in transition. The weakness is not expected to last long. Japan is the world's third largest economy (impressive for a country about the size of New Zealand and an ageing workforce. Their GDP per capita is about +11% higher than ours.)

INSULTING A NEIGHBOUR
A photo of Chinese tourists wearing T-shirts depicting Beijing’s claims to the disputed South China Sea has sparked online anger in Vietnam, prompting calls for the visitors to be deported. The shirts featured a map of China and its so-called nine-dash line – the sea boundary found on some 1940s-era maps which Beijing says proves its claim to most of the waterway, despite claims from Vietnam and other nations to their adjacent seas.

BENCHMARK INTEREST RATES JUMP
Local swap rates rose strongly and steeply today following Wall Street higher. The two year is up +2 bps, the five year is up +3 bps, and the ten year is up +5 bps. On Wall Street, the UST 10yr yield rose in trading to 3.09% but has since fallen back to 3.06%, a +6 bps gain on the day. The Aussie Govt 10 yr is now at 2.87% (up +5 bps). The China 10 yr is at 3.73%, unchanged. And the NZ Govt 10 yr is up +8 bps at 2.83%. The 90 day bank bill rate is unchanged at 2.01%.

BITCOIN DUMPED
The bitcoin price is at US$8,165 which is a -5.9% drop from this time yesterday.

NZ DOLLAR UNCHANGED
The NZD sunk from yesterday on a strengthening USD, but within the past hour the greenback has been bid down sharply on revived tensions in Korea. The NZD is now at 68.7 US. We are a little stronger against the Aussie at 92.1 AUc, and at 58.1 euro cents. That has the TWI-5 at 71.6 and little change overall from this time yesterday.

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USD 
NZD
End of day UTC
Source: CoinDesk

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8 Comments

It isn't much of a secret for Saudi to root for higher oil prices when, the market index decides the fate of a) 75% of government revenue, b) 90% of export earnings, c) 45% of national GDP, d) trillions of dollars in infrastructure investment projects, and e) the IPO valuation (and long-term survival) of their largest company.

Pump and dump, pretty much the way modern markets work isn't it?

Although similar percentage gains in employment across all 5 skill levels; smaller absolute gains in skilled and high-skilled employment due to low base effect.

Fantastic opinion piece from an Auckland real estate agent in Granny Herald.

But then the real estate market has gone dead. New Zealand has gone to sleep in the housing market. Homeowners feeling wealthy and optimistic because of their increasing property equity are upgrading their cars and heading off on overseas holidays. Housing listings are the lowest they've been in my 55 years in real estate. And I've seen more property cycles come and go over my career than many of you have had hot dinners.

Yes, of course the over-inflated Auckland property market needed a cooling-off period to bring some sanity back into the situation, but this . . . this is something else. We have a perfect storm, folks. Buckle up.

https://www.nzherald.co.nz/index.cfm?objectid=12051090&ref=twitter

"'Pension mountain' needed by older tenants.

Tenants who will still be paying rent when they retire will need a pension pot of up to £445,000 to avoid falling living standards, research suggests."

www.bbc.co.uk/news/business-44125837

Between a Rock and a Hard Place.

And this! "Tax on pensioners proposed to heal inter-generational divide"

"A £10,000 payment should be given to the young and pensioners taxed more, a new report into inter-generational fairness in the UK suggests.

The research and policy organisation, the Resolution Foundation, says these radical moves are needed to better fund the NHS and maintain social cohesion.

Its chairman, Lord Willetts, said the contract between young and old had "broken down".

Without action, young people would become "increasingly angry", he said."

http://www.bbc.co.uk/news/business-44029808

Can't resist, DC. Looking at the NIWA map, showing Blue over most of soggy ol' Godzone, I keep hearing Geoffrey Palmer warbling "irreducibly pluvial"....