Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes today.
TERM DEPOSIT RATE CHANGES
Kiwibank has trimmed -5 bps off its nine month rate, and added +5 bps to its one year term deposit rate.
SOFTENING US UP FOR A SOFTER RESULT ...
This is the week we get the big first quarter economic outcome data. The balance of payments result on Wednesday is expected to be a tiny surplus (as opposed to a -$2.7 bln deficit last quarter). But economists seem united in thinking that the GDP result will show weaker growth that in any quarter in 2017. No-one seems optimistic it will be an improvement. Basically, if it comes in at +2.9% growth or lower, it will justify the sagging business confident readings that have been recorded all year. There only seems a downside at present. (The Q2-2017 growth was +3.0%, Q3-2018 was +3.5%, Q4-2017 was +3.2%.)
... BUT AN UPTURN MAY BE AT HAND
But there is a lot to like in May’s Performance of Services Index from Business NZ. First, the headline reading edged up to 57.3 from 56.4 in April. This indicates the service sector is not only expanding at a solid rate, but has even accelerated a little. Second, new orders surged higher to a very strong 65.8, a reading only bettered four times in the past 10 years. However, we can overstate the improvement in words; better to take a look at our charts to gain a fuller perspective.
GREEN HOPE
Auckland Council has today opened its NZ$200 mln 5 year, unsubordinated, fixed rate "green bonds". They should pay investors the five year swap rate plus 0.47%, which on today's rate would yield 3.14%. The money will be used for the "financing or refinancing of existing and/or planned projects and assets that deliver positive environmental outcomes". Hopefully these will earn a positive return, and more positive than 3.14%. Did we say, hopefully? In any case, they are backed by the Council's ability to levy rates.
TURNING AWAY FROM US?
The latest Aussie tourism data shows that travel from Australia to New Zealand declined by -3.3% in April from a year ago. But the timing of Easter might have something to do with that.
POPULATION WATCH
Just extrapolation by us, but we must now be very close indeed to our population hitting 4.9 mln. If it hasn't already there will only be 1000 of so in it. It was 4,871,300 as at March 31, 2018.
MORE MONEY TO RESOLVE CLAIMS OF A 'STAFFING CRISIS'
Nurses have rejected a pay offer of +9% over 15 months and have voted to strike. That is about +$5,100 per year for a nurse on a mid range pay level and +$10,000 after two years. The Labour Government has expressed disappointment. Current nurse pay is here. Interestingly, the current deal doesn't actually expire intil the end of August. And the NZNO took a negotiated agreement to its members who have rejected it. The NZNO negotiators seem to have lost the confidence of its members. All increases will flow through to all allied health workers.
BENCHMARK INTEREST RATES SOFT
Local swap rates are little changed although the five and ten year durations are -1 bp lower. The UST 10yr is now at 2.91%, down -1 bps from where Wall Street ended on Saturday. The Aussie Govt 10yr is at 2.67, also down -1 bp, the China Govt 10yr is at 3.65% (up +2 bps), and the NZ Govt 10 yr is at 2.94%, unchanged. The 90 day bank bill rate is up another +2 bp to 2.02%.
BITCOIN LOWER
The bitcoin price is now at US$6,422 and down -2.6% from this time on Friday.
NZD LITTLE CHANGED OVERALL
The NZD is little changed at 69.3 USc. And we are little changed against the Aussie at 93.1 AUc and at 59.8 euro cents compared with this on Friday. That has the TWI-5 at 72.7.
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Daily exchange rates
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13 Comments
Yes, the interest rate is exactly equal to cpi but you will pay tax on the income anyway. Was it the Productivity Commission who pointed this out, or some other august body? A simple change to this would help reduce our desperate need to flog our assets to others, yet the chances of that happening seem remote.
The nurses should peg their claim to the teachers. They have been equal in the past so they should say to the government "what ever you settle with the teachers is what we demand" Go ahead and tell the nurses that they are worth less than them. As things stand at the moment after the aged care workers settlement, anybody off the street can do a few weeks course and go straight into a higher salary than a newly 3 year degree graduated nurse with a large student loan.
9 years of that hard line with the Nats and that is why we are in this mess.
Watch what happens with the teachers however. The Labour government will go and give them a larger settlement than the Nurses and increase the disparity further. I think that the nurses are at the point that they have lost all their patience and good will. Further the NZNO has not served them well and been far too compliant and I would suspect that a lot of nurses are at the point of losing their patience with them also. The NZNO might have a lot of trouble getting nurses to accept anything other than a very substantial pay rise.
The government should be looking to Britain to see what is happening. Brexit has resulted in nurses leaving the country in droves. They are in total disarray and and the whole public health system is at the point of collapse. Similarly their nursing training facilities. If they are not already then they will soon be desperately poaching our staff so extra pay will be required to head off droves of nurses leaving NZ and heading to the UK.
they can head off in droves all they like - as when they get there they will quickly turn around and head back twice as fast - that grass is pure brown field ! and there are a lot of UK trained nurses heading out here at the double - desperate for a way out - and who wont see the house prices anywhere but central auckland as an issue - and a 45min commute - as working on their doorstep!
I have been here 12 years- work at a senior level in health - i commute 45 mins each way and still think its like being on holiday
75K at five years experience + penals for evenings and weekends - not like shops garages food industry drivers and the many other industries who also have to work mixed hours - 5 weeks annual leave in DHB's
It could be better - but its not that bad - and there are a lot of people who would take 2k one off, 3% today 3% more in 6 months and another 3% a year later -
the majority of those who put labour in wont see anythign like it - Nurses would do well to say yes before they start to lose public support -
its a good deal
Oops, slip of the lip from Judith Collins
Yukky
https://www.newshub.co.nz/home/politics/2018/06/judith-collins-apologis…
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