A review of things you need to know before you go home on Wednesday; house prices ease, Westpac sees lower mortgage rates & higher prices, Fonterra changes top, swaps stable, NZD firms

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

MORTGAGE RATE CHANGES
No changes today.

TERM DEPOSIT RATE CHANGES
Christian Savings changed rates today.

HOUSE PRICES EASE, ESPECIALLY IN AUCKLAND
Despite REINZ's headline (which some other media ran with), house prices were generally softer in July compared to June, but sales volumes are holding up. In Auckland the median house price is now lower that it was a year ago, and lower still from the level two years ago. In Northland, Nelson and Marlborough, all three regions recorded record high median house prices. But sales volumes in these places didn't pick up.

'VIGOROUS Q1 2019'
But looking ahead, Westpac has changed its forecasting tune, now saying that house price growth will start to accelerate again in 2019. The reason? it fingers the RBNZ's new low-rate guidance which it sees pushing down two year mortgage rates by -20 bps.

REASSESSING
Fonterra has stopped looking for a Theo Spierings replacement via an international search and made an internal interim appointment. Miles Hurrell is the new boss. With a new chairman and a new CEO in quick succession, it is reassessing how it wants to move the dairy giant forward.

A REAL GAIN, JUST
In Australia, wages data out today shows the pace of growth quickened marginally over the June quarter, but remains subdued by historical standards. Wages are up +2.1% 2.4% in the year to June. Prices are up +2.1% in the same year. (The equivalent NZ data is +3.3% and +1.5%.)

THE BLEEDING RESTARTS
The stock market bleeding has intensified in Asia trading today. Tokyo is down -0.4%, Hong Kong is down -1.3% (a -4.5% fall in a week), and Shanghai is down -1.0% (a -4.7% fall since the beginning of August), all in mid morning session trading. Meanwhile, both the ASX and the NZX are holding minor gains in afternoon trading.

DOWN THE LIST
New Zealand universities ranked poorly in a new global survey. Aussie institutions did better with six in the top 100.

NEW REGIONAL SURGE
In China, pent-up demand for house (apartment) buying is surging, and prices are up sharply especially in third-tier cities. Prices are up the most ever in some of these places. But in the main centres, the gains were more muted.

SWAP RATES STABLE
Wholesale swap rates are little changed across the curve today today. The UST 10yr is a little firmer at 2.89%, up +1 bp from this time yesterday while their 2-10 curve is marginally lower at just under +26 bps. The Aussie Govt 10yr is at 2.57% (down -2 bps today), the China Govt 10yr is at 3.59% (unchanged), while the NZ Govt 10 yr is now at 2.61%, also unchanged. The 90 day bank bill rate is unchanged too at 1.90%.

BITCOIN RECOVERS
The bitcoin price is now at US$6,273 and up +4.9% from this time yesterday.

NZD SOFTISH
The NZD is softening just slightly against the greenback. We are at 65.5 USc. On the cross rates we are marginally firmer at 90.8 AUc and the euro is at 57.8 euro cents. That puts the TWI-5 at 69.9.

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USD 
NZD
End of day UTC
Source: CoinDesk

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17 Comments

The Australian wage growth is at 2.1%, David.

woops. Thank you.

What is happening in parliament Now : 3rd reading of Overseas Investment Bill Live

https://www.parliament.nz/en/watch-parliament/

Did it pass the 3rd reading?

63 to 57. Passed.

Next step?

Your name!

Interests Oil and petrol chart is going exponential. Auckland not withstanding the fuel levy up 25 percent on the year. Anyone suggesting no downstream effects with the continued surge in price .

There's not a good and not a service which isn't traceable to fossil energy. But it's a bit late to worry about that:

https://srsroccoreport.com/the-coming-breakdown-of-u-s-global-markets-ex...

" From this point onwards retrieving the present financial fiat system is no longer doable"

Heck, I could'a written that...... :).

powerdownkiwi,

Based on what that report anticipates,can I assume that you have,or are in the process of, selling all your existing investments to hold gold and silver?
Do you hold them as gold and silver coins and if so,presumably in safe custody? i am really curious about doomsday scenarios and as i hope to be around in 2020,perhaps we can revisit this at that time.

Universities falling down the 'likes':

The fallacy of 'edumication' as the Path Forward is neatly skewered by this Atlantic Monthly article. RTWT.....

It is entirely possible to get a good education at the many schools that don’t count as “good” in our brand-obsessed system. But the “bad” ones really are bad for you. For those who made the mistake of being born to the wrong parents, our society offers a kind of virtual education system. It has places that look like colleges—but aren’t really. It has debt—and that, unfortunately, is real. The people who enter into this class hologram do not collect a college premium; they wind up in something more like indentured servitude.

Australian politicians and central bankers maintain that with the economy approaching full employment, wage growth is around the corner.
So has been the case for a very long time. First, a workforce with 12-15% people underemployed, I’d hardly call that anywhere close to full employment. I guess “around the corner” is a term thrown around to waffle one’s way through the next election and remain in power. It is serving the LNP coalition well.
Second, 100k more people on work visas and 70k more on student visa this year than the previous when the economy has created 180k full-time jobs in the same period should be ringing alarm bells. I’d hardly call that a well-functioning migration system.

Great to see the big teacher protest on Queen Street today. These are the people along with nurses, doctors, police etc that are essential to a well functioning society. Not speculative business interests, property speculators, foreign scammers etc. here’s hoping they get what they deserve.

It's the cost of housing that's making them poor

Its almost like people get punished for trying to earn an honest living and positively influencing the lives’ of others, be it as nurses, policemen, community workers or teachers.
Those poor nurses and teachers who appear on talk shows and morning radio say workers don’t seem to get the fair share of social rewards in public service anymore and they regret not going to law school or studying business at university. Congrats to us NZers, we are gradually Americanising ourselves!

Rarely do I disagree with you Advisor and it is a small disagreement, but we're doing far better than the Yanks..

We've democratically voted in a government that is taking action in office following the vote of the majority and actually delivering on that promise.. The Yanks, Brits et al have voted on other events recently where their politicians are now failing to deliver on what was decided by the majority... It appears that Jacinda's team have teeth, and conviction and will follow through on the promises they made to the majority.

The situation they've been left with dictates that they can't do everything at once, but it is a very good sign that democracy is functioning as it should..

I saw one guy on Facebook asking where to send the invoice because he had to stay at home with the kids for the day due to the teacher strike.

Be a Dad for once.