Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Update: Both ANZ and TSB reduced fixed homne loan rates today. See details here.
TERM DEPOSIT RATE CHANGES
None here either.
MIXED MESSAGES
NGĀ KARERE PAI
ANZ sees 'mixed messages' in its August truckometer data. The light truck version is 'steady', perhaps losing momentum, the heavy truck version suggests growth is still there.
I PIKI AKE TE TĀMI AHUMONI
INFLATION CLIMBED UPWARDS
The ANZ inflation monitoring came in with their rate rising to +2.8% pa. The ANZ economists say this is as they expected, due to temporary factors. "But with GDP growth expected to soften, we don’t see this persisting into the medium term."
FUEL COSTS BITE HARD
HE UAUA TE UTU O TE HINU
After mis-signaling retail sales in the June quarter, the electronic card transaction data has suffered a bit of a black eye. The April to June monthly data indicated weakish retail sales, but the quarterly June retail sales data was surprisingly strong (even if it was bolstered by higher costs for petrol). Today we got August electronic transaction data. That was surprisingly strong, up +5.8% from August 2017. But again, it is the higher cost of petrol (especially the extra Auckland regional fuel tax) that is pushing these numbers up. So higher retail sales is no longer necessarily a 'good' measure of consumers wanting to spend more. In July, fuel costs rose +11.9% year-on-year, and now in August that are up +12.7%.
HE HIAHIA NUI
A MEDDLING IMPULSE
The Electricity Price Review report was released today. At first glance it appears to be a bit of a beat-up. It found that residential costs hadn't risen since 2015, but most of the increases came before that and during the Clark/Cullen government when electricity was supplied by 100% SOEs! Costs for people with bad credit, or don't or won't shop around, have risen. Apparently this is a bad thing and the-Government-must-do-something. Costs for commercial users have fallen, but for industrial users costs have risen. It seems to describe a market that is finally working, giving price signals based on demand pressures. But the Minister wants to force those 'benefits' on those that don't or won't seek them. One-way price regulation will be a step that undermines the progress.
HELP WANTED
TE HIAHIA ĀWHINA
I don't speak or write te Reo and maybe that is obvious from the headlines above. Please add corrections in the comment section below, and I will update. I would like to get them right. (H/T to ANZ for seeding the idea in their inflation report.)
SWAP RATES UNCHANGED
Swap rates are virually unchanged again today. The UST 10yr is holding at 2.94% and has shows very little volatility over the past 24 hours. But the UST 2yr yield is rising slowly and that has put the UST 2-10 curve down at +22 bps. The Aussie Govt 10yr is at 2.59% (unchanged), the China Govt 10yr is at 3.69% (up another +2 bp), while the NZ Govt 10 yr is at 2.60%, also up another +2 bps. The 90 day bank bill rate is unchanged at 1.89%.
BITCOIN LITTLE CHANGED
The bitcoin price is at US$6,348 and virtually the same as at this time yesterday. And we should also note that after the NY close, gold has tracked lower, now down to US$1,192 in Aussie trading.
NZD BECALMED
The NZD is also little changed at 65.3 USc. On the cross rates we are holding at 91.8 AUc, and softer at 56.3 euro cents. That puts the TWI-5 unchanged at 69.2 and still near is recent lows.
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18 Comments
Fuel Tax Vs Retail Spend ........... round 1 goes to Fuel Tax
Did no one tell these champagne socialists that if you introduce a new tax, that the money to pay that tax has to come from somewhere else, that it was previously used , spent or allocated ?
Or
For every action there is an equal and opposite reaction
Or
For every action you take there is a consequence ...... sometimes unintended or unforeseen ?
Someone should've told the previous lot that stratospheric immigration volumes and perpetuating a housing crisis would have infrastructural consequences down the track, you reckon?
Champagne capitalism, drinking all the wine now and now worrying about the hangover.
Perhaps someone should tell the present lot the same thing.
There haven't been any immigration rules changes since the new lot has taken power.
As to housing, both parties are quite culpable. The prior Labour government did every bit as much damage to housing affordability as the prior National party. Now going on two decades of laizzez faire. Well, not so much in regards to costs of construction... Aucklands council gets a fair bit of blame for the past two decades of insufficient housing growth.
Agree that pressure needs to be put on Labour re immigration, and that Clark's government was at fault too. National was disappointing for having campaigned specifically on the need to address the housing crisis then following that with nine years' of denying any such crisis existed (as well as perpetuating Working for Families and the Accommodation Supplement to exacerbate issues).
Key point was, we're facing the infrastructural consequences of these years of those easy sugar rushes.
I agree but the word you should be using "cronyism", that's what the Nats championed in their tenure. All their policies did was help unproductive businesses push their costs down and gain a larger domestic customer base. They did nothing to reduce barriers to entry for new suppliers, which is the foundation of free market, as the term 'free' suggests.
The fuel cost goes way deeper. I use truck-stop diesel in the SUV (Caltex Zone C pricing), get an 8c discount on that from KiwiFuelCard, and the discounted price has gone from $0.9291 to $1.2890 in the space of a year - Sept 4. 2017 to Aug 28 2018. That's a 38.7% increase....
Truck-stop diesel (assuming a pro-rata price increase to industry and the trucking fraternity especially) is an input to everything from farming to FMCG. That increase is partly core oil price, partly FX rate, and no doubt partly fuel company actions (like running off the end of a particularly good FX hedge deal).
Whatever, it's gonna show up in inflation. A dollar more on the tank fill is a dollar less for everything else: no Magic Munny Tree in non-Gubmint wallets. No Dusty Old Carpet to burrow under and discover Untold Billions beneath, in ordinary folks' lives.
One could even say that kua pakaru hiko raraunga kāri tauwhitinga......
Fuel is a rort perpetrated on individuals and small business by big cartels. And yes Waymad, every dollar they suck out makes New Zealanders that little bit poorer.
It's shocking that ten of thousands of civil servants in Wellington can't get their heads around this.
Currently in Dunedin the headline price for Diesel is $1.75 but in Cromwell you can get it for about 15C cheaper. (both lots more expensive than Waymads)
Clearly the Dunedin price is controlled by a cosy monopoly, and nobody dares step out of line. In Central Otago Allied (really Richardsons) and McKewon's are able to sell it much cheaper, despite hauling over 230 kms from the coast.
I am sure if they tried this in the city, somehow they would have trouble getting supplies. Funny that.
I love the outlook on inflation - it’s at 2.8% but we expect it to drop because growth (or lack there of). But what about wage pressures - nurses, support workers, teachers, police, etc. teachers new deal is 3% * 3. If that is the new standard in the public sector what will inflation be?
Businesses across the Tasman are particularly downbeat about current conditions, bringing the confidence level to a 27-month low.
We’ve depressed wages through unbridled immigration, received subsidies and avoided taxes, gotten the average consumer to tap into their savings to continue buying our goods. What now? We’ve got nothing to look forward to. Sigh!
http://www.abc.net.au/news/2018-09-11/business-confidence-slip-despite-…
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