Here are the key things you need to know before you leave work today:
MORTGAGE RATE CHANGES
There were no changes today.
TERM DEPOSIT RATE CHANGES
FE Investments has launched a 5.18% ‘special’ one year offer in time for Chinese New Year. That involves a +18 bps rise from its prior rate. At the same time it has trimmed back all its longer rate offers. RaboDirect also cut rates for all terms, from -5 to -20 bps (the larger cuts were at the shorter end).
NEW YEAR, NEW CONFIDENCE I
ANZ reported that its Roy Morgan survey of consumer confidence lifted in January, breaking a run of three consecutive declines. Consumers are feeling good. Both the current and future conditions indexes increased. The current conditions index is at the highest levels since 2007. The stabilisation in the housing market and the fact uncertainty surrounding the election has waned have perhaps cleared the path for a strong labour market to support consumer sentiment.
NEW YEAR, NEW CONFIDENCE II
Car sales bounced back strongly in January. They were up +6.4% to 10,797 and the strongest growth in seven months. 58.5% were SUVs. Commercial vehicle sales were up almost +10% from the same month a year ago.
AUCKLAND BUCKS A DOWNWARD TREND
New dwelling consents are down in Waikato, Bay of Plenty and Canterbury, up in Auckland and Wellington in December 2017 compared with December 2016. In fact, Auckland bucked the national trend with apartments and house consents up over the period.
Non-housing consents issued in December were worth $485 mln in December. Infometrics reported that over the quarter, the value of non-residential building consents was up +5.7% from a year earlier, but this lift was driven by a strong increase in alterations and additions consents, with the value for new building down -5.1% over the same period. “Looking ahead, we anticipate further growth in non-residential building consents as firms expand to accommodate demand from the growing population.”
RECORD VISITORS ARRIVE
For the first time ever we welcomed more than half a million visitor arrivals in one month. The new record is 513,349, +3.9% more than for December 2016. December is traditionally the peak travel month due to the Christmas and New Year holiday period. As Stats NZ observed, “The half million overseas visitors arriving in December is roughly equivalent to 55 Boeing 787 Dreamliners at full capacity landing every day during the month. The high point of the December month’s travel was the week leading up to Christmas, when 142,000 visitors arrived.” Large growth came from the USA which sent an additional +38,700 visitors. The UK was next with an additional +28,300. About +9,000 additional visitors arrived from each of Germany, China, Hong Kong and Korea. In terms of absolute numbers however, no-one comes close to the 1,472,000 visitors from Australia and that grew by +63,000.
MIGRATION LEVELS OFF HIGH
Net migration fell by nearly -7% in December 2017 compared to the same month the previous year but the annual net migration level is still up at +70,000. Interestingly, the December data shows a noticeable rise in the number of migrants heading for Hamilton, Tauranga and Wellington. Despite that, in 2017 more than 50% (+51.6%) settled in Auckland and that was up from 48.6% in 2016.
BENCHMARK INTEREST RATES RISING
Swap rates are rising today at the longer end. The two year is unchanged, but the five year is up +2 bps and the ten year is up +3 bps. Meanwhile the UST 10 yr has risen strongly this afternoon and is now at 2.78%, up +5 bps from this time yesterday. The Aussie 10 yr is at 2.81%, down -1 bp on yesterday. The Chinese 10 yr is at unchanged 3.95%, and the Kiwi 10 yr bond is 2.99, up +4 bps from yesterday. The 90 day bank bill rate is unchanged.
BITCOIN BELOW US$9,000
Bitcoin is now at US$8,640 in a major move down. That is a loss of US$1,450 in a day or a -14.3% drop. Ouch. In the good-old-days in mid December, this price was north of US$19,000.
NZ DOLLAR LITTLE CHANGED
After a run up over 74 USc the NZ dollar is now down at 73.7 USc – the same as it was at this time yesterday. The Kiwi is up to 92 AUc, and at 59 euro cents. This puts the TWI-5 at 74.4.