Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report again today.
TERM DEPOSIT RATE CHANGES
None here either.
PET PROJECT
Almost half of the $750 mln allocated for new funding of national capital projects in the 2018 Budget will be spent on upgrading just one set of Auckland hospitals (ADHB). And relatively little for either the Waitemata DHB (the country's largest) or the Counties Manukau DHB (Middlemore and South Auckland). Everyone else has to share the remaining $450 mln. Incidentally, that takes our tally of outstanding or planned large Auckland capital projects to $65.8 bln. See the list here.
A FREEBIE FOR AUCKLAND
Nationwide taxpayers are to fund the Auckland Harbour Bridget SkyPath project, with the whole $67 mln cost to be funded by central Government funding via the NZTA. It will be open in 2021.
FEE-FOR-NO-SERVICE CLAIM
Vodafone has been caught in a fee-for-no-service claim by the Commerce Commission who have filed court charges over the matter. It involves a Vodafone practice of charging for a full calendar month of final costs even though a termination date mid month was agreed.
SURGE FOR SAFETY
Lower yields are flowing through faster now for NZGB bond tenders. Today's $150 mln tender for 2025s (about a 7 year term) was funded with investors getting just 2.23%. That compares with 2.44% for the same bond just one month ago and 2.77% in the equivalent February 2018 tender. Despite the lower return, this issue was wildly popular being covered with offers 5.2 times and only 12 of the 46 bids received were successful.
NO MORE ACCELERATION
Ratings agency Moody's is getting a little cautions when it looks ahead at global growth prospects. They say "Growth prospects for many of the G-20 economies remain solid, but there are indications that the synchronous acceleration of growth heading into 2018 is now giving way to diverging trends. The near term global outlook for most advanced economies is broadly resilient, in contrast to the weakening of some developing economies in the face of emerging headwinds from rising US trade protectionism, tightening external liquidity conditions and elevated oil prices. We expect the G-20 countries to grow 3.3% in 2018 and 3.1% in 2019. The advanced economies will grow 2.3% in 2018 and 2.0% in 2019, while G-20 emerging markets will remain the growth drivers, at 5.1% in both 2018 and 2019."
ENORMOUS TOURIST SURGE
Mainland Chinese tourists made more than 71.3 mln trips outside their country in the first half of the year, a +15% surge year on year, taking advantage of easier visa approvals and more direct international flights connecting with lower-tier Chinese cities. Tourist numbers from China to New Zealand rose +17% over the same period amounting to 230,000 trips. That makes our share just 0.3% of this enormous flood.
RE-JIGGED NAFTA CLOSE
The US Administration is signaling that a US-Mexico agreement on NAFTA is close, and a handshake deal might be announced tomorrow. Then it is up to Canada to assess whether it is good enough for them.
SWAP RATES LOWER
Wholesale swap rates are down -1 bp for durations of 2 to 10 years. The UST 10yr is still at 2.82%, down -1 bp. The US 2-10 curve has now fallen just +22 bps, another 11 year low. The Aussie Govt 10yr is at 2.53% (down -1 bp), the China Govt 10yr is at 3.65% (also down -1 bp), while the NZ Govt 10 yr is now at 2.61%, unchanged. The 90 day bank bill rate is also unchanged at 1.91%.
BITCOIN RETREATS
The bitcoin price is back down at US$6,392 a -4.7% fall from this time yesterday.
NZD SOFTER
The NZD is a softer today against the USD at 66.7 USc. On the cross rates we are marginally firmer at 91.5 AUc as they work though their political leadership crisis, and 57.7 euro cents. That puts the TWI-5 at 70.5.
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13 Comments
Fantastic news for QEII Trust covenants. https://qeiinationaltrust.org.nz/qeiisupremecourtvictory/
Here in the Hutt we have the River Trail - a bike/walk path that goes the length of the river from Upper Hutt to the river mouth. Over a million folks use it annually, and as it gets improved it becomes more and more a commuter node. It's a path of the people, by the people, for the people - given it is all local rates that pay for it. :-).
I don't know Auckland but SkyPath might just be that sort of infrastructure with that kind of usage. But AKLers being AKLers the wider community would not have wanted to pay. Prior to amalgamation, you might have seen North Shore City Council and Auckland City Council doing it as a joint venture - now that there is a Super City, it's too big a place to get that kind of common-interest project off the ground. Nobody is interested in anyone else's commute or anyone else's commons.
Personally, I hate to chip in the bucks for a skypath but a bit more decongestion in Auckland should have a ripple effect on productivity gains for the nation as a whole. The city's activities makes up 38% of our economy.
All I am saying is of all the taxpayer-funded projects that have been approved by this coalition government, this certainly still has some utility and isn't all money down the drain.
The city consumes processed parts of the planet, emits a waste-stream and is not maintainable in present form.
If you need to think that's '38% of the economy', good luck to you.
Productivity gains - as I've mentioned before, are either a move in the direction of slave-labour incomes, or they're energy efficiencies. The vast majority in Auckland - as elsewhere - don't 'produce' anything at all. On the energy/work/processed resource consumption/excretion flow, they are parasitic.
I agree the city isn’t exactly an economic wonder even at country level, just a mishmash of mainly low and semi skilled service providers in a bunch of unplanned urban zones.
The place remains the gateway to the nation for low skilled workers arriving from less fortunate countries. These workers and the businesses that employ them have successfully crowded out their productive counterparts, some to the regions but most to other countries.
2017 Commentary from Michael Reddell on NZ’s high immigration rate: It’s the firms in the non-tradeable sectors who are benefiting most from mass immigration: firms servicing the domestic economy, doing things like developing fast-food franchises and building houses. There’s this really important distinction between the tradeable and non-tradeable sectors. The bit that’s competing with the rest of the world – the tradeable sector, the basis of our long-term prosperity – has been badly affected. We’ve skewed the whole economy towards meeting the domestic needs of the country. Per-capita output in the tradeables sector hasn’t increased for 15 years now.
$67Million!!! Or (in the bank) about $5k per day above inflation, $200/hour in perpetuity.
That would pay for a 24hr bus service or ferry that can be replaced with much cheaper autonomous in a few years given simplicity of route.
And how do you spend $67million on a 1km long walkway? $67k per meter for Allahs sake! It doesn't need windows, And it only needs to be 3m wide with a divider given likely tiny traffic. Fire the architects with their ridiculously overpriced 'vision', go strictly utilitarian treadplate-on-steel frame and you could get it designed and fabricated in China or any number of shipyards for less than 10% that price and just lift it up and bolt it in place.
Anyone think this isn't going on here?
https://www.afr.com/real-estate/chinese-buyer-bought-a-house-on-a-housi…
Summary: Shady Chinese real estate company with offices in PRC and Australia has been advertising services of getting money out of China in order to buy real estate in Australia, but somebody from the Shenzhen office has stolen all the deposits he was supposed to be laundering and is now on the lam.
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