Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes again today.
TERM DEPOSIT RATE CHANGES
None here either.
Our "current account deficit for the March 2018 quarter was $3 billion", Stats NZ said today. Or so their headline shouts. But a closer look at the data, the actual data, shows a +$182 mln surplus (yes, surplus, not a typo). And that is a better result than markets were expecting. All very confusing. It turns out the -$3 bln deficit is the seasonally adjusted number, not the actual number. Still confused? I am too. To get rid of the issue of seasonal adjustment, the current account deficit in the year to March 2018 was -$7.9 bln and that is up from -$7.2 bln in the same year to March 2017. So yes, it is a deterioration but a relatively minor one. As a percent of GDP, the current account deficit has gone from -2.7% of GDP to -2.8%. Sorry Stats NZ, I'm going with the actual numbers and for the March quarter they actually look quite positive. A -$0.4 bln goods deficit, a +$3.1 bln services surplus, and a -$2.6 bln primary & secondary account balance. In addition the capital account balance was an inconsequential -$26 mln deficit. The Financial accounts were +$126 mln surplus with marginally more foreign investment in here (+$1.9 bln) than New Zealanders invested overseas (-$1.8 bln). None of this needed a headline of a -$3 bln deficit.
HOLDING THE LINE
At the same time, Stats NZ released its International Investment Position (IIP) data. That shows we owe the rest of the world -$408.5 bln which is only $10.6 bln more than in March 2017 (up 2.7%). Meanwhile, New Zealand assets held offshore are $252.4 bln, and that is +$7.5 bln more than in March 2017 (up 3.1%). The net deterioration is a movement of only -$3.1 bln in a year, and a net liability of $156.1 bln. (And our net exposure to financial derivatives went positive in the year.)
MINING ON THE RISE (IN VALUE AT LEAST)
Another snippet from the balance of payments data is the gold export data. In the year to March 2018, we exported $556 mln of gold and that was the most since 2013.
CONSUMER CONFIDENCE DOWN
Consumer confidence is slipping. According to the latest Westpac-MM quarterly survey, (which mirrors the ANZ-Roy Morgan monthly survey), consumers are feeling less upbeat these days.
ONLINE JOB ADS OFF THEIR HIGHS
And reinforcing the slipping consumer confidence, MBIE's job ads survey slipped too. But to be fair it was at a record high in April, and is still +4% higher than May 2017.
FARM SALES HANG IN THERE
Farm sales were probably stronger in May than many were expecting. There were 159 sales in May and that is nowhere near the falloff that some in the rural real estate industry are claiming. (PGG Wrightson, Bayleys.) Still, the May 2018 volume is almost -8% lower than May 2017. Apart from in Otago and Southland, there is no evidence that dairy farm prices/ha are falling either.
SHAKING OFF A PUMMELING
After taking a thrashing yesterday, Asian stock market indexes have generally stopped falling, holding their lower levels. But Shanghai is down another -0.5% in early trade. Both the ASX and NZX are up today.
Australian households received, on average, AU$76 more a week in government benefits – both cash and in kind – than they paid in extra taxes in 2015-16, an Australian Bureau of Statistics report released today has found.
BENCHMARK INTEREST RATES MIXED
Local swap rates are essentially unchanged. Any movement so far today has been on the firm side - the 10 yr is up +1 bps. The UST 10yr is now at 2.90%, back up +2 bps. The Aussie Govt 10yr is at 2.64, up +1 bp, the China Govt 10yr is at 3.60% (down -4 bps), and the NZ Govt 10 yr is at 2.92%, up +4 bps. The 90 day bank bill rate is down -1 bp to 2.01%.
The bitcoin price is now at US$6,601 which is a bit more than -$100 lower or -1.7% lower than at this time yesterday.
NZD LITTLE CHANGED YET AGAIN
The NZD is a little higher this afternoon than where we opened this morning, but down from this time yesterday at 69.1 USc. We are little changed against the Aussie at 93.5 AUc and at 59.7 euro cents. That has the TWI-5 still at 72.7.
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