Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Kiwibank has trimmed its 2 year fixed rate. More here.
TERM DEPOSIT RATE CHANGES
No changes to report here.
IN GOOD HEART
New Zealand exporters surveyed by trade lobby group ExportNZ have found this group in good heart. Exporters were confident in the last 12 months, and this is rising going into 2019 with export markets to get a bigger focus. Australia continues to dominate Kiwi exports, with North America, Europe and Pacific Islands still holding strong trading positions. But the survey records these businesses have a growing ‘concern about increasing costs in New Zealand due to the coming industrial regulation’ and they expect it to be "a major barrier" when it comes to how they manage where they base their production. When asked about dealing with the Kiwi dollar in 2018, 23% have cited this as less manageable than last year, comparing with only 7% of exporters in 2017. Just 13% found the NZ dollar more manageable than last year, with the vast majority (64%) of exporters finding the impacts of the Kiwi dollar to be the same as last year.
MORE SATISFIED
New results from Roy Morgan show that customer satisfaction with banks in New Zealand in the 12 months to September 2018 was 79.1%, an increase from 77.0% in the 12 months to September 2017. The increase was a result of seven of the nine largest banks showing improved satisfaction, with TSB Bank the biggest improver up 5.9% points, followed by The Co-Operative Bank up 4.9% points and Westpac up 3.9% points. (At the same time a Deloitte survey in Australia on trust in banks has confirmed trust in banks is not high. There is not a New Zealand version released yet. But the 2017 version showed significantly higher trust levels here.)
FONTERRA'S AGM
Fonterra will hold its Annual Meeting on Thursday 8 November at 10:30am at its Lichfield site, corner State Highway 1 and Wiltsdown Road, Lichfield.
SOME PROGRESS, SOME NOT
In data released today from ACC claims and WorkSafeNZ records, about 56 people lost their life in workplace accidents per year over the past three years. Most of these tragedies happened in the agriculture sector (18), the transport sector (9), forestry (5), manufacturing (5), construction (4) and fishing (4). These six sectors account for 80% of all work-related fatalities. The overall rate of fatal work accidents is actually below the national target, so progress is being recorded. These 56 events happened among the nation's 2,182,500 full time employees. But there is a broader problem with non-fatal serious injuries. These amounted to 426,000 per year (not a typo) or 16.9 per 100,000 FTEs. This is above the Government target of 14.3/100,000 FTEs. 'Serious' means that, and involves urgent hospitalisation..
NOT IN GOOD HEART
The Shanghai stock exchange has opened more than -1.6% lower in early trading today, and still sinking. That makes the loss over the past week at nearly -4%% and since May 21, the loss has now breached -20%. So, we can now say they are in a bear market. Investors fear bear markets because the trend can get accentuated by fear and contagion. Wall Street however is only in a 'correction' (S&P500 is down -10%). The NZX50 is not even there yet, only down -8.5%, top-to-current. (And just for the record, the Milan Stock Exchange index is down -24% since May, well on its way to recording the Italian financial crisis of 2018.)
SWAP RATES LOWER
Swap rates are down -1 bp across the whole curve today. The UST 10yr yield is up slightly from this morning, now at 3.09%. The UST 2-10 curve is holding at +27 bps. Benchmark bond rates are holding as well. The Aussie Govt 10yr is at 2.59% (unchanged from this morning), the China Govt 10yr is at 3.55% (unchanged), while the NZ Govt 10 yr is at 2.55% and down -2 bps from this morning's open. The 90 day bank bill rate is unchanged at 1.89%.
BITCOIN STUCK
The bitcoin price is now at US$6,425, and still basically unchanged over the past two weeks.
NZD UNCHANGED
The NZD is also unchanged at 65.2 USc. On the cross rates we are also going nowhere at 92 AUc, and 57.3 euro cents. That leaves the TWI-5 at just over 69.7. And just for the record, there was no RBNZ activity in September trying to manipulate our exchange rate. That makes it a full three years since this was last attempted (then, without any success).
This chart is animated here. For previous users, the animation process has been updated and works better now.
Daily exchange rates
Select chart tabs
27 Comments
Yes, the linked article is complaining that Kiwibuild is insufficient. The logical conclusion would be, build more. Without the government building a bunch of houses, the shortage would grow even greater (unless you think the government building X houses displaces > X privately built houses)
Yvil, clickbait. with immigration falling off quite quickly combined with many folk leaving Auckland, the adjustment is taking place to help ease the crisis. The prediction you already subscribed to of a slow slide towards another economic depression will further undermine lofty house prices, elevate unemployment and further reduce immigration. I would have thought this would seem logical.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
That newshub article just shows how the narrative of New Zealand, media and politics has been rigged by the banks. If people want to get a true understanding of why the baby boomers did so well and why the next generation are faced with a lifetime of debt then this is worth a watch. The post war period benefited from the deleveraging that had occurred since the 1929 crash. Since then all we have now is leverage and there comes a limit where people can't pay. We can either follow Australia over the cliff, or the young can take heed, hold back and spare themselves from when the credit growth stops.
If people want to get a true understanding of why the baby boomers did so well and why the next generation are faced with a lifetime of debt then this is worth a watch.
Does Newshub spend any tine dicussing how sacrificing iPhones and smashed avos on toast servings will get the millennials on track?
Yes, indeed. They brilliantly surmised that young folk spending $1,000 on a phone that is also a camera and a personal computer every few years is the problem, rather than an almost million dollar median house price. Brilliant journalism indeed.
Because back in their day, no one had a phone, camera, typewriter or personal computer. Holiday slides magicked their way out of thin air to be inflicted on friends and relatives.
If you did watch that last one....this one rolls onto a number of the issues that could be a really big concern... I get the impression he's a guy that the Aussies have thrown out for talking reality and sadly spent too long not earning enough money in academia (he does know his stuff though). 15 months on and he's been proven very correct... hopefully he got a few shorts in place beforehand.
The article assumes net migration will continue at current pace but we are witnessing the tide turn for Kiwis in NZ as Australia's job market recovers.
Also, business PMI and PSI have been signaling pessimism in hiring intentions for a while now, which after a few months of lag could mean fewer people arriving on work visas and more leaving due to dried up job opportunities. Growing number of Kiwis on jobseeker benefits also points towards a similar trend.
2nd or 3rd time you posted that Yvil.. found something that supports your view and holding on for dear life?
The big problem I have with that, is that its all based on a guess of the number of occupants per house to erive a required number of houses. If that number is low, then the "required" number of houses is high. And if the Auckland White Flight continues you will find that the number is indeed low.
Just thought I'll throw the cat amongst the pigeons to get some reactions, I know how desperate most commenters are for house prices to plummet.
I actually very much agree with you that using occupants/dwelling to assess the housing shortage is a very fickle measure. (i.e. if you count 4 pax/dwelling instead of 3, the whole housing shortage is sorted…)
Stuff hitting the fan - CoreLogic has recorded a fall in prices at the bottom tranche of the Australian property market.
When the bottom end does fall, it tends to point to more persistent weakness in the property market
https://www.abc.net.au/news/2018-10-29/house-price-falls-chart-of-the-d…
https://www.youtube.com/watch?v=KIaXVntqlUE&t=87s
It's not really a surprise and is coming to a town near you. Steve keen warning on Chinese leverage and private debt. In 6 years post 2009 the Chinese had managed to grow the ratio of private debt at a rate that had taken the US 17 years to do in the lead up to the GFC.... (SSE now down 2.34% today)
Fifth Pillar crumbles: why AMP policy-holders’ losses are Resolution’s profits.
https://www.michaelwest.com.au/fifth-pillar-crumbles-why-amp-policy-hol…
Death by a Thousand Cuts
Insurance in a Low InterestEnvironment
https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/financial-s…
Immigration NZ can't handle the volume of fraud being reported - estimated to be between 80-90% of all work visa applications granted;
https://www.stuff.co.nz/national/crime/108136698/immigration-nz-fields-…
"The reality is that if all immigration advisers speak up, 80 to 90 per cent of all applications are wrong, and should not be approved - it is a massive number," he said.
"Most of the industry exists because of fraud. If there was no fraud, many advisers and lawyers would leave the industry [because they wouldn't be needed]."
Is this how we claimed our top position on the corruption perception index? Does our transparency stem from the fact that crimes no tip off is ever investigated. Shameful situation!
Also, the government is actually planning to reduce the residence application processing fees.
Well cutting processing fees would mean less corruption found. That ought to keep us top. Give everyone a pay rise. Meanwhile no change since 2016
https://www.auckland.ac.nz/en/about/news-events-and-notices/news/news-2…
Hopefully Mr Lees-Galloway reads these blogs. Or maybe he just skims until he notices Kate's name. If he is reading this then the solution is simple - put up prices for Visas to cover the costs of investigating. The only contraversial issue is whether INZ should charge universally or adjust to match the more fraudulent countries of origin - maybe waive the fees for the Vatican?
If concerned about higher costs for people from poor countries then he could cap fees to match the $40,000 that a recent immigrant offered his Kiwi boss for a marriage of residency convenience.
https://www.stuff.co.nz/national/crime/108067804/the-big-scam-marriages…
Possibly because they are a bunch of incompetents, perhaps? Why does it cost me $1 per transaction in the US, $6 in Aussie and $29.50 in NZ? I asked them this by email and got the following classic corporate denial:
We are unable to comment on any brokerage fees charged by individual participants and we have no part in determining those fees.
It's not just me that thinks they are pretty useless:
The NZX is a docile organisation that has been asleep at the wheel for a number of decades.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11…
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.