A review of things you need to know before you go home on Monday; Heartland trims TD rates, PSI jobs contract, Harcourts finds soft prices, Shipley faces court, more bond issues, swaps firm, NZD stable

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

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
No changes here either, but we missed reporting on Friday that Heartland Bank lowered all its term deposit rates by between -5 and -20 bps across the board.

PSI SIGNALS CONCERNS
The last three months have brought the slowest expansion of our services sector since late 2012. Today's release of the August data confirms that. New orders are lowish but not at the bottom of the recent range. But more worryingly, the employment data is very low - the second month out of three recording a contraction, and the lowest since coming out of the GFC in 2012. On top of the 'stalling' employment data from factories, this is not data that should be ignored. The BusinessNZ analysis is here.

RACING PAST US
The number of visitors to Australia from China in the year to July has knocked the number from New Zealand out of 'first place'. There were 1.373 mln Kiwi visitors to the Lucky Country in the year to July, up +1.4% from the previous year. There were 1.425 mln Chinese visitors to Australia in the same period and that grew +10.6% from the previous year.

FLAT-LINING
Data from real estate agency Harcourts shows they sold more homes in August but average prices were down in some centres including Auckland, Wellington and Christchurch. Their CEO picks 'an upturn shortly. Harcourts average Auckland price dropped to lowest level in 2 years, consistent with recent REINZ data.

MORE & FASTER
New data shows that of the 1,373,457 customers who can access ultra fast broadband by a fibre connection, 44% have done so. There are also indications that more customers are choosing faster connections.

DIRECTOR'S RESPONSIBILITY
Former Prime Minister Jenny Shipley (and NZ's first female PM) was in court today defending a claim Mainzeal Construction traded while insolvent. She was its chairman at the time it folded. Liquidators hope the directors' professional liability insurance will allow them to recover up to $75 mln for creditors, many of them unpaid subcontractors. But the case is as much about the standards of governance and care owed by company directors towards the company and creditors as the monetary claim.

CORPORATE BOND RUSH
Swelling household bank deposits are attracting corporate interest, looking for cheaper funding than from bank loans. Property For Industry (PFI is seeking up to $100 mln in a new unrated seven year bonds with a minimum interest rate of 4.15%. And Summerset Group has raised $125 mln of seven year bonds, and these yielded 4.20% pa.

DRYING OUT QUICKLY
A quick check of the soil moisture map below shows an early Spring that is dryer than normal, nationwide. However, the Soputhern Oscillation Index is not yet pointing to either a La Nina, or El Nino pattern developing.

SWAP RATES STEEPER
Swap rates rose and steepened today with rates to three years up +1 bp and longer rates up +2 bps. The UST 10yr is up at 3.00%. The UST 2-10 curve still just above +21 bps. The Aussie Govt 10yr is at 2.63% (up +2 bps), the China Govt 10yr is at 3.67% (down -1 bp), while the NZ Govt 10 yr is at 2.60%, and up +2 bps. The 90 day bank bill rate is unchanged at 1.88%.

BITCOIN LITTLE CHANGED
The bitcoin price is little changed at US$6,512.

NZD STABLE
The NZD is now at 65.5 USc. On the cross rates we are unchanged at 91.6 AUc, and at 56.3 euro cents. That puts the TWI-5 at 69.4.

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12 Comments

Another confirmation of a lack of confidence going forward. They just keep adding up don't they? Never mind, spring is here. There's nothing like a bit of sunshine to lift the spirits.

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Jenny Shipley. What a piece of work. I thought she was on the China Construction Bank's list of political "enablers."

Will we ever know exactly what Shipley knew ?

If anything she should have known better .

And the stock of unsold houses in New Zealand (trademe listings) has risen to 31,308.

More from Martin North, now suggesting that Australia could become the next Ireland with falls in house prices of up to 40%.

https://www.youtube.com/watch?v=BcMS1zL0GbE

House prices to drop due to foreign buyer ban!
https://www.tvnz.co.nz/one-news/new-zealand/foreign-buyer-ban-impact-kiw...
But we were told the foreign buyers had had no effect. 3% of buyers apparently.

The media has been riddled with contradictions on foreign buyers.
Just this morning, Simon said in an interview that foreign capital has always been critical for NZ’s prosperity, so he’d like to repeal the ban. He then said the ban was meaningless as foreign investment made up 3% of the NZ property market.
Which one is it, Simon? Is foreign house buying critical for our future prosperity or a meaningless 3%?

I've said it before and I'll say it again, Westpac will be the first to go cap in hand to a government for funding. There is so much confusion coming out of their press releases both here and in Australia that it does not bode well. They are also the most exposed lender in Australia.

https://www.cnbc.com/2018/09/17/standard-life-aberdeen-weighs-in-on-us-c...
At the end he says:
"China's very clever at getting you in and probably making sure you don't make too much money," he said.
Does Fonterra read this stuff?

Just had a sale of in-law's house (Christchurch sausage flat front unit) confirmed. 14 days on the market, gross sale price 105% of a 2017 RV. Counted ourselves lucky....

This is interesting.

https://www.stuff.co.nz/business/107143385/policies-restrict-access-to-b...

I note the line:

'Over recent years, many buyers have been able to get a foot on the property ladder by using their parents' properties as security. In March it was estimated that half of all buyers had their parents' help, and up to 90 per cent in some parts of Auckland.'

If there has been a systemic change in practice it will impact the market.

Cheers Hardly - I saw that earlier and couldn't help but comment.

It's just another form of 'debt stacking' and is little different to what many of our commentators will have been doing with Buy-to-let financing, re-financing and financing again. It's another sign that the banks are quickly turning 'risk-off' and questioning the value of the assets against which they have previously made loans. It's a shame that it didn't happen 5 years ago, but everyone was having so much fun at the time!