Here are the key things you need to know before you leave work today:
MORTGAGE RATE CHANGES
The week is ending with no changes.
TERM DEPOSIT RATE CHANGES
FE Investments have reduced all their rate offers by -20 bps.
CONSTRUCTION BACKLOG GROWING
A new crane count finds that two-thirds of all New Zealand construction cranes are now operating in Auckland with most focused on an expanding project list in the central city.
The number of new homes consented in February fell year-on-year and the annual growth rate is slowing. There is a clear switch away from single family home in Auckland to smaller units.
MUM & DAD PROPERTY INVESTORS TARGETED
IRD has released a ‘ring-fencing’ paper. Revenue Minister encourages feedback on proposal to ensure investors can’t offset losses on property investments against other income.
We missed it earlier, but have now updated our dairy payout page to reflect Westland’s February payout forecast reduction to $6.10-$6.40/kgMS.
GROWING FAST, BUT NOT QUITE AS FAST
At $1.6 bln, the value of building consents issued in February for buildings other than residential was up an impressive +11.7% over February 2017. But this sector can have volatile month-by-month outcomes, so for the year to February 2018, the rise is 9.9% compared with the same period a year earlier. But that growth rate does seem it be moderating a little.
Westpac’s quarterly employment confidence report reveals a small improvement from a good level. Perceptions of earnings growth and job security strengthened over the last quarter. However, job opportunities were seen to be a bit thinner on the ground. – Earnings growth has yet to show a clear upward trend, even as the labour market has tightened in recent years.
ANOTHER REGISTERED BANK
There are now 26 registered banks in New Zealand. The latest is the Bank of China which was registered here today.
ROUGHLY IN BALANCE
The total value of loans outstanding in New Zealand owed to all registered banks is $431.3 bln, according to the RBNZ S10 data release today for February. That is +5.2% more than the same month a year ago. The total value of customer deposits at these same banks is $326.4 bln (or 75.7% of those loans) which is up +6.5% from the same month a year ago. Basically deposits are growing faster than loans on a % basis but on a dollar basis loans grew by +$21.5 bln in the year while customer deposits grew by +$20.0 bln. Shareholder investment grew by +$4.1 bln, but shareholders only have 7.9% of their own money supporting all bank assets (on this basis that makes these banks leveraged 12.7 times).
WHERE THE DEBT IS
As at February, there were $245.8 bln on housing loans outstanding, and these grew by +5.6% in the year. Other personal finance debt grew +8.0% in the same time frame, while business debt grew by +5.3% and rural debt grew by just +2.3%.
The $150 mln NZGovt Apr-2033 bonds tendered today brought its lowest yield since October 2016 of 3.14%. The bidding was strong with the coverage ratio of 2.4 times. (The lowest yield this Apr-2033 bond tender has ever achieved was 2.563% on July 28, 2016.)
BENCHMARK INTEREST RATES TURN UP
Local wholesale swap rates have risen today. The 2 year is unchanged but the five year is up +2 bps, and the ten year is also up +2 bps. The UST 10yr yield is up +1 bp to 2.79%. The Aussie Govt 10 yr is down a massive -10 bps to 2.59%. The China 10 yr is down -2 bps at 3.75% and the NZ Govt 10 yr is down -1 bp at 2.76%. The 90 day bank bill rate is up +1 bp at 1.96%.
The bitcoin price is now at US$7,935, a loss of -1.6% from this time yesterday.
NZ DOLLAR SLIPS ON USD GAIN
The NZD is down -¾c on the day to just on 72 USc. On the cross rates we are holding at 94.1 AUc and at 58.5 euro cents. That puts the TWI-5 at 73.4.
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