Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes today.
TERM DEPOSIT RATE CHANGES
No changes here either.
A flurry of activity from the Reserve Bank today. Firstly, the prudential regulator issued five "in-principle decisions" as part of its review of bank capital adequacy requirements. These include confirmation that ANZ, ASB, BNZ and Westpac will have to report their risk weighted assets and associated credit ratios calculated using both the internal models approach they currently use, and the standardised approach used by other NZ banks. The central bank also issued a paper detailing the outcomes of its stress testing, alongside the Australian Prudential Regulation Authority, of the big four banks last year. The Reserve Bank says the testing shows the banks' strong profitability would allow them to absorb significant losses without breaching their minimum capital requirements. Talking of bank capital, the Chinese government controlled ICBC NZ has received a capital injection through an issue of just over 88 million shares to its parent. This comes with ICBC NZ having recently disclosed a $10.2 million provision on a $32.8 million loan to failed insurer CBL.
TRADE WARS
President Donald Trump confirmed that the United States would begin collecting tariffs on $34 billion in Chinese goods at 12:01 a.m. Washington D.C. time (0401 GMT) on Friday and warned that subsequent rounds could see tariffs on more than $500 billion of goods, or roughly the total amount that the United States imported from China last year. “You have another 16 (billion dollars) in two weeks, and then, as you know, we have $200 billion in abeyance and then after the $200 billion, we have $300 billion in abeyance. Ok? So we have 50 plus 200 plus almost 300,” Trump told reporters aboard Air Force One.
MORE WOMEN ON PUBLIC BOARDS
Membership of all state sector boards will be evenly represented by women and men by 2021, Minister for Women Julie Anne Genter announced today. "This Government is committed to increasing women in leadership across all boards in New Zealand and we are leading by example. We will ensure half of all directors on state sector boards and committees are women by 2021" said Ms Genter speaking at a Women in Leadership symposium in Auckland. More than 2,600 appointments are made to state sector boards every year. These include large SOEs, conservation boards and community trusts. The Government today released the latest Gender stocktake of state sector boards and committees which shows record high level of women’s participation. As at the end of 2017, women represented 45.7 percent of state sector boards and committees, but Ms Genter said the Government was more ambitious for women than that.
DWELLING AND HOUSEHOLD ESTIMATES
As at 30 June 2018, there were an estimated 1.870 mln private dwellings in New Zealand, up 1.5% for the year. 1.170 mln of these were estimated to be owner occupied, 630,000 were rented and 70,000 were provided free by individuals, private trusts, businesses and government agencies. In comparison to that, there were an estimated 1.747 mln households in New Zealand, up 1.3% for the year. Of these, an estimated 1.093 mln lived in owner occupied dwellings, 589,000 were renting and 66,000 were in dwellings that were provided free.
SPECIAL SCHOOLS
More than $23 million will be invested in rebuilding two special schools in Auckland and Christchurch, Associate Education Minister Tracey Martin announced today. The country's largest special school, Sommerville, which since 2013 has occupied facilities on the former Tamaki Intermediate School site in Panmure, will be rebuilt onsite at a cost of $17 million. A further $6 million will allow the relocation and rebuild of Allenvale Special School in Christchurch to be completed. Minister Martin announced the funding, part of Budget 2018, in a visit to Sommerville today. The special schools announcement is part of the $332 million School Growth Package of new capital spending in Budget 2018. Further announcements about investments in school property will be made in the coming weeks.
SWAP RATES HIGHER
Local swap rates were up +1 bp for the 1 yr term and up +3 bps for the remainder of the curve. The UST 10yr is now at 2.84%, unchanged. The Aussie Govt 10yr is at 2.60, also unchanged, the China Govt 10yr is at 3.53% (unchanged), and the NZ Govt 10 yr is at 2.81%, also unchanged. The 90 day bank bill rate is up +1 bp to 1.98%.
BITCOIN LOWER
The bitcoin price is now at US$6,526 which is -1.6% lower than this time yesterday.
NZD FIRM
The NZD is firm at 67.8 USc. On the cross rate we are at 91.9 AUc and 58.1 euro cents. That has the TWI-5 at 71.2.
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24 Comments
Hi Suraj. I think this needs a re-write as not sure what the lower figures are in comparison to.. is that 2017?
As at 30 June 2018, there were an estimated 1.870 mln private dwellings in New Zealand, up 1.5% for the year. 1.170 mln of these were estimated to be owner occupied, 630,000 were rented and 70,000 were provided free by individuals, private trusts, businesses and government agencies. In comparison to that, there were an estimated 1.747 mln households in New Zealand, up 1.3% for the year. Of these, an estimated 1.093 mln lived in owner occupied dwellings, 589,000 were renting and 66,000 were in dwellings that were provided free.
https://www.stats.govt.nz/topics/households
"A household can be one person who lives alone, or two or more people who live together and share facilities (such as for cooking) in a private dwelling."
Something odd has happened to Iceland’s fisheries. In Icelandic waters, cod numbers have hit a historic high. But rather than taking advantage of this bountiful fishing opportunity, the annual catch has decreased by 45 percent since 1981. Over the same period, the total export value of Icelandic cod products has increased by more than 100 percent. The cause of this peculiar and seemingly contradictory trend is partly explained by Iceland’s Ocean Cluster House or what is commonly referred to as the “Silicon Valley of White Fish.”
Overlooking Reykjavik’s harbor, Ocean Cluster House is home to 120 new marine start-ups, all of which are focused on “100 percent fish utilization.” In other words, they are businesses developing ideas that use fish meat, oil, skin, bones and intestines, to draw value out of produce that would otherwise be trashed. “From one cod we can maybe get $12 for the fillet. But if we use the whole round we can get $3,500 for each cod,” explains Ocean Cluster’s founder, Thor Sigfusson. The “value-added approach challenges the notion that a fish’s primary purpose is a fillet,” he notes.
https://humanprogress.org/article.php?p=1376
Should NZ not try and do similar?
We do. This is the purpose of AgResearch. https://www.agresearch.co.nz/our-science/our-science/
Not sure there would be much of a market for dried cow heads, or cosmetics made from cow oil.
Hmmm., if they've gone from $12 for the cod fillets to $3500 per fish, and cut the catch by 45%, why has the the export value only doubled? $3500/$12 = each fish is "worth" 291 times as much. 291 *0.55% of the old catch volume = 160 times value... where did the other 158 times value go?
Ah, follow a few links (https://www.undercurrentnews.com/2016/11/18/icelands-start-ups-breathe-…) and it turns out they are targeting getting to $80 per cod, from $18. So trying to get 4 times as much value.. not 290x. So just another huge load of deceptive bollocks in the original article. I guess there is a very limited demand for cosmetics made from fish guts that are undoubtedly hugely expensive to get anywhere near the $3500/fish number..
Someone needs to report articles with accuracy, or they just look like they're spinning spin.
The Icelandic cod are at 40-year highs, not historic ones. They are roughly 1/3 of what they were after WW2.
"As a consequence the largest buyer of meal and oil from Iceland is Norway, where it is used to feed salmon".
So there's your upper return. Salmon minus....
Dr copper is sick
https://finviz.com/futures_charts.ashx?p=d1&t=HG
"The Reserve Bank says the testing shows the banks' strong profitability would allow them to absorb significant losses without breaching their minimum capital requirements"
If only banks could make more money they could then survive the next down turn... didn't they make billions last year? Oh yeah they gave it all out in bonuses. lets hope they get NZ even more in debt next year so the poor sods can make even more.
Subtracting # of households from # of private dwellings seems to suggest that 123,000 dwellings in NZ are empty - or that too simplistic?
If 'private dwellings' doesn't include Housing NZ and council flats, then the figure would be more.
Just a question - is that level of vacancy what we would normally expect, or are there a lot of people just sitting on property?
This trade / tariff war – am I missing something, there is an odd and somewhat bizarre air of complacency about it all.
The economic well-being of the world has the potential to soon become frighteningly unstable – but markets are carrying on as though it’s business as usual.
No black swans sighted as yet – but the breeding grounds are certainly fertile.
Do be careful.
It could be said that hedge funds and derivative funds really drive a large percentage of the market – from those players comes the volatility – I would think pension funds participate in, but don’t drive the market.
You would think it ends there -but it just gets so much more complicated that it's difficult to comprehend.
Try coming to terms with a synthetic CDO.
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