A review of things you need to know before you go home on Monday; BNZ offers a TD special; manufacturing data panned, BNZ to offer shared ownership scheme, equities slide again, swaps lower again, NZD holds

A review of things you need to know before you go home on Monday; BNZ offers a TD special; manufacturing data panned, BNZ to offer shared ownership scheme, equities slide again, swaps lower again, NZD holds

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

MORTGAGE RATE CHANGES
No changes to home loan rates today.

TERM DEPOSIT RATE CHANGES
BNZ have launched a 3.45% 'special' for an eight month term. That is a rise of +25 bps.

NOT HELPFUL
Professional analysts weren't impressed with the manufacturing data Stats NZ released today for the September quarter. At first blush this may seem a bit odd as manufacturing sales were up +7.1% year-on-year. But so were inventories and they were higher by a substantial amount with raw materials up +12.3% and finished goods up +11.3%. So a lot of work is going into unsold stocks and that is a worry. Worse, the volume data indicates that those sales values have been spruiked by price increases; sales volumes were actually unchanged year-on-year. You can see why the pros are unimpressed.

HELPFUL?
BNZ announced today that it will be starting a shared home ownership scheme with a "third party" who can take the place of the Bank of Mum & Dad for those who don't have access to that resource. It will launch in 2019 for first home buyers in Auckland as a trial. The idea is that the 'third party' shares in the equity gain as the house value rises, to be bought out over time. All the risks however are for the buyer, and the buyout obligation to the 'third party' is on top of the mortgage payment to the bank. There are no details yet of what the 'third party' requires to participate. These sort of schemes have been running for years in other markets - but implicit is the the underpinning of rising prices.

EQUITIES SLIDING AGAIN
Equity markets are lower again today. The NZX50 is down -0.9%, the ASX200 is -2.0% and Tokyo is down -2.2%. Shanghai has opened down -0.9% in mid-morning trading and Hong Kong is down -1.8%. These results today are building on a long string of prior declines and are not a good sign for Euro or American markets later tonight.

ANOTHER CORPORATE BOND ISSUE COMING
T R Group has mandated CBA and Westpac to engage wholesale debt investors on a potential 5 year New Zealand dollar bond issue, with an expected rating of Baa3.

A KEY CORNER IS WEAK
In a bit of a surprise, total dwelling finance in Australia pipped higher in October from September even though it was unchanged year-on-year. This is masking the dire position that new house builds are in however, down almost -2% month-on-month and down -12% year-on-year. Finance for resales is the thing keeping this market going. The Aussie housing mortgage markets may be in a tough place but almost all of that is because of new-builds.

PLAN NOW
And staying in Australia, the OECD has warned them to prepare for a house-price induced downward spiral that could end their very long run of growth. They say a soft landing is the most likely outcome but the odds for a hard landing, while small, are rising.

SWAP RATES SOFTER
Wholesale swap rates are a little lower today, down -1 bps for two years, down -2 bps for five years, and down -4 bps for ten years. The UST 10yr is now just under 2.84% which is down -2 bps in off-market trading today. The 2-10 curve is holding at just below +14 bps. The 2-5 curve is still negative however. The Aussie Govt 10yr is at 2.43% and down another -1 bp today, the China Govt 10yr is down -2 bps at 3.30%, while the NZ Govt 10 yr is at 2.46%, down -2 bps today. The 90 day bank bill rate is down -1 bp to 1.98%.

BITCOIN EASES
The bitcoin price is now at US$3,512 and down -3% from where we started today.

NZD STABLE
The Kiwi dollar is also little changed and still at 68.7 USc. On the cross rates we are similar at 95.3 AUc and down at 60.2 euro cents. That leaves the TWI-5 at 73.3.

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Source: CoinDesk

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24 Comments

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Highlight new comments in the last hr(s).

Give your new customer all the info. BNZ!
" The idea is that the 'third party' shares in the equity gain (or losses) as the house value rises (or falls)"

..make no mistake, these schemes are not to benefit anyone but the banks. From the same mold of the FHB scheme in Aus. Anything but let the market 'correct'. Who are these banks serving??

"From the year 2000 there has been a strong increase in house price resulting in house prices nearly doubling between 2000 and 2008, well above the CPI or normal investment growth rate. This paper
sets out that the FHBG was a main driver of these increases and attempts to measure by how
much."

file:///C:/Users/jgrac005/Downloads/52-114-1-SM.pdf

You sure that bitcoin reference is correct? Its had a green day - up 3% to 3,610 usd according to coin market cap.com

A boy asked his bitcoin-investing dad for 1 bitcoin for his birthday.
Dad: What? $15,554??? $14,354 is a lot of money! What do you need $16,782 for anyway?

;)

$3532 on bitcointicker.co now

Ah, there they are! You didn't tell us the other day what you were going to do with all that stuff you bought at $3,700 odd. Now's a good time to let us in on the plan? Did you pick up another one or two at $3,297 over the weekend? Just asking for when it hits, well, $zero.

(Do you know why mothers have read "Jack and The Beanstalk" to their children over many centuries? To warn them against schemes such as Bitcoin!)

Actually no, I converted my BTC to some very nice Alt plays thanks - I believe the coin I went into made 23% in a day before I cashed out (but that said I'd be quite happy at my current buy as the NZ exchanges typically have overheated prices - pretty sure I'd be even were I to sell). And no I didn't buy the tip - I dollar cost average - otherwise I would have been quite happy at $3,250 or so. By the way, I did tell you I started buying in 2013 right?

Did you ever stay awake to the second act of Jack and the Beanstalk?

PS - how are your stocks going? Those money and debt machines just keep printing faster and faster and faster....... will be a shame when the music finally stops - there will be a lot of balls in the air to catch. Or are you clever enough like me in invest long term in property? (or gold? - off for a meeting with the NZ Mint on Wednesday - can't wait!).

Don't get too excited. You do know it is not a proper Mint eh? Donald Duck coins don't really count.

A "proper" mint? Ah... those are the ones with giant machines that are allowed to print an infinite amount of money to fund the government's whims yes? Thank god its not one of those!

Houses are outperforming stocks..... again..... big surprise there.

....which stock are you referring to? There is more than one you know.

With the possible exception of blockchain (more about that above), with the current state of the global debt ponzi markets, anything that is not physical (property and precious metals) is simply make believe pixie dust.

My piece of plastic (card or cash) is still more functional than either crypto or gold when it come to actually buying stuff at the local shop.

We are lucky aren't we? Doesn't work so well in about the 40 or so states with collapsing monetary systems - did you hear Venezuela is going full crypto? Just today I heard that the dash coin is now usable at many of their restaurant chains.

How to make a Ponzi Scheme work.
Make it 'complicated' and exclusive ( not for everybody) so that Converts believe they can see something in it that very few other people can; not too complicated, mind, or you'll put people off entry (NB: Blockchain technology has valid uses. Bitcoin isn't one of them). Make it justifiable ( your post above). Get them to swap real assets/cash, or whatever, for what it is 'exclusive'. The more that join in after the initial converts, the better. The Instigators cash out.
Yes, Bitcoin is a protection against financial loss, but not for the Devotees, but for the Instigators - a bit like Amway was decades ago or more recently David Ross, locally.
None of this is new. PT Barnum summed it up beautifully a century or so ago with his "There's a sucker born every minute" quotation - and didn't he nail it!

I'll bear taht in mind if i ever decide to visit Venezuela.. The only place I've actually noticed in my travels that took crypto (bitcoin only I think) was a Vegas casino.

BNZ to launch a shared ownership scheme. The masters of the universe are getting very creative now aren't they! 10 person household mortgage anyone? That'll be next, just look how they're helping everyone out, getting first home buyers into the market!

can't pay your mortgage, don't worry we will convert the interest to equity. Sort of a win win

I can confirm Bank of MAD put in half a million 2 years ago. The upside is that we don't see them that often. On that basis alone I can recommend it.

Is New Zealand going to have a debate on the UN Global Compact on Migration . Has anyone seen it talked about on night time news
https://refugeesmigrants.un.org/migration-compact
Objective 17 of the pact commits the government to “promote independent, objective and quality reporting of media outlets, including internet-based information, including by sensitizing and educating media professionals on migration-related issues and terminology, investing in ethical reporting standards and advertising and stopping allocation of public funding or material support to media outlets that systematically promote intolerance, xenophobia, racism and other forms of discrimination towards migrants, in full respect for the freedom of the media.”

Sounds like freedom...

https://www.cnbc.com/asia-markets/
https://finviz.com/futures_charts.ashx?t=ES&p=m5

Ouchies. A lot of kiwisavers are going to take another smack tonight.

David, do you have any stories in the pipeline on how well the different kiwisaver options have done in the recent volatility?

Cash (Fund) is King.