Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report.
TERM DEPOSIT RATE CHANGES
No changes here either.
A QUIET MARKET
Major Auckland realtor, Barfoot & Thompson has reported that sales volumes were subdued in July but prices held their ground, and unsold inventory was the highest for a July since 2011.
PRIORITY SPENDING
New Zealand car sales data for July is out and that shows another strong month. More than 8,000 cars sold in July which was the highest July since 1985. 65.7% of all cars sold were SUVs, second only to the June proportion. Commercial vehicle sales were an all-time record for a July. (Used import registration data will come early next week.)
TAME JOBS OUTLOOK
Looking past an unusual jump in healthcare ads, the ANZ job ad monitoring shows a flat jobs environment, suggesting that our unemployment rate will hold steady at 4.5%.
NO SIGN OF CREDIT STRESS
The most direct assessment of personal credit stress is our bankruptcy data - and that is not yet showing any evidence at all of rising bankruptcies or No Asset Procedures. The long-term down trend of these credit stress markers is still in place, maybe surprising some gloomsters. Even more remarkable is the continuing sharper decline on a per capita basis. Perhaps we should look at the rise in overall household debt, now at $268 bln and up +5.8%, on a population adjusted basis. In the past year our population has risen +2.0%, so that puts the nominal increase in overall household debt at just +3.8%, and on a 'real' basis, just +2.3% pa.
PER CAPITA REAL DEBT GROWTH
In fact, since the start of 2009 on an inflation and population-adjusted basis, household debt has only increased by +14.5% (or about +0.5% per year). Since 2015, the rise on that basis has picked up up to +4.0% pa.
SNUGGLING UP
A2 Milk has increased its shareholding in Synlait Milk from 9.1% to 17.4%.
A BETTER SYSTEM
The IRD is promoting legislation allowing them to refund taxpayers who they think have had too much deducted during the year. They say this will involve about 750,000 people. They will do it for free. (It may also seriously crimp the style of the commercial tax refund companies who charge a substantial fee for their services.) But there is a downside - the same system identifies those who owe money, and the new system will automatically seek recovery of those underpayments - which they say could be as many as 110,000 people.
SWAP RATES SOFT
Local swap rates are dowen -1 across the board. The UST 10yr is holding steady at 2.99%. The Aussie Govt 10yr is at 2.74 and unchanged today, the China Govt 10yr is at 3.49% down -2 bps, while the NZ Govt 10 yr is at 2.83%, down -1 bp. The 90 day bank bill rate has also shed -1 bp and is now at 1.90%.
BITCOIN LOWER
The bitcoin price is now at US$7,342 and down -4.5% from this time yesterday.
NZD LOWER BUT STILL IN RANGE
The NZD is noticeably lower at 67.3 USc. We are also a little lower on the cross rates at 91.4 AUc, and the euro at 58.1 euro cents. That leaves the TWI-5 at 71 which puts it at about the same level were were at one month ago. Since mid April our currency is -5.2% lower so that downward trend has stopped on a TWI basis.
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12 Comments
TWI - 72.93, Treasury BEFU assumption 'around 75'
WTI - 69.06 Treasury BEFU assumption 'around 60'
Interesting statistics on US land use.
Here's How America Uses Its Land
https://www.bloomberg.com/graphics/2018-us-land-use/
41% of land revolves around livestock. That's a lot.
No wonder there's a huge "beef-mountain" in the US.
Should beef-farmers in NZ worry.
Bloody knew it.. First Kiwibuild homes are Papakura.
Copy'n'paste from the email:
Next steps to a KiwiBuild home
Thank you for registering your interest in KiwiBuild, just like thousands of other Kiwis who want to buy an affordable home of their own.
Later this month, you'll be able to take the next steps towards owning a home through the online 'pre-qualification' process. This will help us determine if you are eligible to enter a KiwiBuild ballot.
Once the pre-qualification stage opens, you'll be given plenty of time to get your documentation together before the ballot opens for the first KiwiBuild homes.
Remember, KiwiBuild is about the Government working with the private sector to build modest, starter homes for New Zealanders. It's a long-term project and we'll keep you informed every step of the way.
Some of you have been in touch and we thought it would be a good idea to share some of the more commonly asked questions.
1. Where are the first homes being built?
The first homes are under construction in Papakura, South Auckland and will be balloted later this year. If this is an area you are interested in, you might want to think about preparing the documentation to pre-qualify. In the coming months, we'll let you know about further KiwiBuild projects in Auckland and other regions, and we'll keep you up-to-date when more homes become available.
Remember, there is no advantage in rushing to pre-qualify for a KiwiBuild home. The best option is to wait until we announce a ballot that you're interested in, and then you can begin the pre-qualification stage.
2. Do I need a deposit and pre-approval for a mortgage to buy a KiwiBuild home?
Yes. Buying a KiwiBuild home is similar to buying a home on the open market and you will need to go through the same process as any first home buyer. You'll need to prove to a mortgage provider that you can afford a mortgage and have enough money saved for a deposit. Everyone's financial circumstances are different, so we recommend you seek financial advice about what might suit you best.
3. How many properties are there in the first ballot?
The first ballot will have a relatively limited number of homes. These will be the first KiwiBuild homes built, but more homes will be available later this year and early in 2019. Remember, KiwiBuild is a ten year project and homes will be built throughout this period.
4. What will I need to do to complete the pre-qualification process?
The pre-qualification application process will ask you for some documentation including:
Proof from Inland Revenue (IRD) that your income is below the KiwiBuild limit
A copy of your passport or citizenship/residency documents
Proof of pre-approved finance from a mortgage provider
A signed declaration, witnessed by a Justice of the Peace or lawyer, that states you are providing true and accurate information to be assessed by KiwiBuild5. How long will my pre-qualification remain valid for?
It's valid for six months from the date you pre-qualify. We will send you a reminder to update your details two weeks before they expire. Once again, our advice is to complete the pre-qualification stage only when you have identified a KiwiBuild home you want to buy.
If you'd like more information about KiwiBuild you can visit the KiwiBuild website or view The Pathway to Home Ownership.
since the start of 2009 on an inflation and population-adjusted basis, household debt has only increased by +14.5% (or about +0.5% per year).
Difficult to compare households with per capita, but looking at https://tradingeconomics.com/new-zealand/gdp-per-capita it looks like GDP per capita has gone up 12.2% in the same period.
Here is history repeating itself. The number of IO loans both here and in Aussie are scary. IO loans will be to Australia what teaser rates were to the US housing crisis.
The other video was more interesting.. the productivity commission report into Australian banking and financial services sector.
Bobster, from here on in, love to be a fly on the wall in some of those bank boardrooms. An oil embargo could even set things off; https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12100…
There's potential triggers popping up all over the show!
I get the feeling that report is all good stuff but it will be put straight into the bin. The banks will fight tooth and nail to prevent any obligation to act in the next interests of the customer, they are there to flog products and get as much money out of the customer as they can. They may have more luck with the mortgage broker reforms.
they'll try, thats for sure. The other one that was interesting was the recommendation about credit carc interchange fees. That would hurt the banks hugely, with out the interchange fees the whole case for the premium credit cards with the various rewards schemes falls over. no more $150/year fees on credit cards, or charging retailers 2% and paying 1% out in rewards on billions of dollars a month
With China open and everywhere else closed, someone began heavily selling UST futures so that by the time Europe opened yields were uniformly rising. The final bigger leap came in the final 30 minutes before US markets started up. By 9:30 am, the 10s were at 3.011%.
Trump reflation? Technical selling?
http://www.alhambrapartners.com/2018/08/03/what-was-that-tuesday-night-…
Risk reduction before the weekend is prudent and remains standard operating procedure. Especially when news such as the PBOC raising reserve requirements on FX forwards well after the close of their official trading day could be sprung out of the blue when no one was paying attention.
Who would have thought that at 9 a.m. London time, when the on-shore yuan found a bank suddenly willing to aggressively buy the currency, that it was something everyone needed to think about? At the time it felt like that was the time-marker signaling the de facto end of the trading day rather than a recast of how things might go.
https://www.zerohedge.com/news/2018-08-03/and-just-pboc-changed-your-day
1. China owns just 6.8% of US Treasuries. Absorbed in days by market.
2. China’s entire gold holdings are less than 0.2% & would be less than 1% of money supply.
3. Yuan is used in less than 4% of global transactions. Impossible with capital controls
4. https://www.dlacalle.com/en/nuclear-option-china-has-already-lost-a-pos… …
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