• A review of things you need to know before you go home on Monday; more TD rate cuts; Barfoot sales slump; TPP now a big deal; Dashboard updated, swaps rise; NZD stable, & more

    Here are the main things you need to know before you leave work today.

    LANGUAGE RATE CHANGES

    no changes to be reported today.

    TERMINAL DEPOSIT RATE CHANGES

    Kiwibank today reduced some term deposit fees. You can follow all the many recent movements here. February sales fell in AUCKLAND Barfoot & Thomson’s sales in February fell -29% compared to the same month last year. In 474, its sales volumes were the lowest we have seen in February and the lowest of any month since December 2008. (Our record goes back to 2001.) Average prices fell -3.2% in relation to January and average selling prices fell -1%. Sales volume was lower in February than January in five of the past six years and this year is no exception. Sales volumes in March are generally about + 70% higher than the average for January and February. So this sets a test for March 2019 in 960. If it reaches that level, it will be the lowest month in March in nine years. The March average over the past decade is a sales level of 1,210 transactions across the Barfoots residential network.

    TPP NOW A BIG DEAL FOR OUR TRADE

    Statsitcs NZ today pointed out that bidirectional trade with TPP countries represents almost a third of trade and is almost touching $ 50 billion / year. By comparison, China, our single largest non-TPP trading partner, accounts for only 20% of our total two-way trade. New Zealand’s three main trading partners – China, Australia and the EU – accounted for almost half of total trade with the rest of the world. Total exports of goods and services were $ 82.3 billion, an increase of + 6.8% over 2017, while total imports were of $ 80.8 billion, an increase of + 11.6% compared to 2017. Also interesting is that 70% of our trade with the EU is with countries other than the United Kingdom. (We will discuss more about this separately, soon.) PANEL UPDATE Now, we’ve updated the data for the RBNZ Panel on our Key Bank Metrics tool, now covering four quarters of 2018.

    TRUMP BUMP?

    The stock markets opened today today strongly.

    New Zealand and Australia are up about +0.7% while they are also enthusiastic in Hong Kong (up +0.2% in early trade), Tokyo (+0.8%) and Shanghai (+1.3%). Expectations are high that the US President will cave in his trade negotiations with China, accept a deal from China to buy more soybeans, and declare victory.

    FALLING AWAY
    We all know that Aussie building approvals are declining and that is because of a slump in the apartment market. January data out today shows that in the year to January, apartment building approvals are down -18% and more than -50% on a January-2019 vs January 2018 basis. But also worrying for them is that house approvals are starting to slip as well and now taking 12-month-on-12-month data into negative territory too. For all that, the industry in Australia saw green shoots in the data, noting it wasn’t as bad as for December. Good luck with that.

    SWAP RATES FIRM
    Local swap rates are firmer today by about +1 bps, except at the long end where they are up +4 bps. The UST 10yr yield is up +3 bps at 2.72%. Their 2-10 curve is higher at +20 bps while their 1-5 curve remains inverted at -3 bps. The Aussie Govt 10yr is up +4 bps to 2.15%, the China Govt 10yr is up +2 bps at 3.21%, while the NZ Govt 10 yr is up +1 bp so far today to 2.21%. The 90 day bank bill rate is unchanged at 1.89%.

    BITCOIN UNCHANGED
    The bitcoin price is unchanged from this time on Friday at US$3,802.

    NZD LITTLE CHANGED
    The NZD remains at 68.1 USc. And we are little-changed against the Aussie at 96.1 AUc, and at 59.9 euro cents. That leaves the TWI-5 at 72.6.

    This chart is animated here. For previous users, the animation process has been updated and works better now.


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