90 seconds at 9 am: GOP retreats

90 seconds at 9 am: ASB raises 2yr mortgage rate; equity markets strong; US housing improves; Republicans retreat on debt limit; NZ$1 = US$0.836, TWI - 75.3

21st Jan 13, 8:48am by David Chaston

Here's my summary of the key news overnight in 90 seconds at 9 am, including news that today is a public holiday in Wellington. However, that has not stopped ASB from changing mortgage rates.

It has raised its two year fixed rate 20 bps to 5.45% while cutting three, four and five year rates. This has flattened their mortgage rate curve and they now have the lowest difference between one and five year mortgage rates in almost four years.

We have been seeing a gradual rise in wholesale swap rates since November and these increases have been across the curve.

Now is a good time for homeowners to assess their floating rate mortgages as it seems that fixed rate mortgages are starting their expected rise.

In the US, with earnings momentum on the rise, the S&P 500 seems to have few hurdles ahead as it continues to power higher, its all-time high not too far away. It closed last week at a fresh five-year high on strong housing and labour market data and a string of earnings that beat expectations.

American home resales are expected to have risen 0.6% in December when data is released on Wednesday. Pending home sales contracts, which lead actual sales by a month or two, hit a 30 month high in November. And their new home sales report at the end of this week is expected to show a 2.1% increase.

American markets seem completely desensitised to the endless budget battles going on in Washington.

However there was a surprising development on that front; House Republican leaders proposed a three-month extension of the federal debt limit, a significant shift in Republican strategy, and an easing of immediate tension.

There is no major data released in New Zealand this week, and with the regulators on holiday in Wellington we can expect a normal, uninterupted and productive business day!

The New Zealand dollar starts today at 83.6 USc, 79.7 AUc, and the TWI is at 75.3.

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8 Comments

by powerdownkiwi | 21st Jan 13, 10:54am 1358718889

An introduction by a man who claims you can have "sustainable economic growth"?

(an RNZ news-clip, if I recall).

You'd have done better finding someone who knew that was an impossibility, and who was aware of just how far along the continuum we are.

Which might have lead you to examine what it is that underwrites incomes. Which might have lead you to understand that the ratios of yore are history.

http://www.peakprosperity.com/blog/80506/really-really-big-picture

Have a good year, Hugh. I'f you're serious about affordable housing, drop by sometime.

by Wolly | 21st Jan 13, 9:50am 1358715014

"An Air NZ flight from London to Auckland in April and returning in May, booked from Flight Centre in the UK, cost .. - $1620 on the currency exchange rate at the time.

The equivalent flight from Auckland to London on the same days, booked through Flight Centre in New Zealand, cost $3189." herald

by Stephen Hulme | 21st Jan 13, 10:12am 1358716378

Yep, we think of ourselves as bozos and hence we treat each other as such. - I stopped flying out of NZ the last time I arrived, which was 1998, to avoid such humiliation. Why would you willingly pass the money to racketeers?

by steven | 21st Jan 13, 11:49am 1358722147

The costs have as far as I know always been seasonal so this looks "normal" Last time I went to the UK for Xmas I had to fly before 15th Dec or pay many hundred's extra....So flying into winter is heavily discounted, into summer slammed.

regards

by Andrewj | 21st Jan 13, 1:27pm 1358728074

I San Fran to NZ return, 13 hours each way $2k us

San Fran to Santiago Chile return, same flight times, price $ 900 .us incl taxes.

San Fran to Buenos Aires return, 13.5 hours Price $900 us Incl taxes

by Roger Witherspoon | 21st Jan 13, 10:02am 1358715723

Yer gotta larf aven't you eh? Or else you would cry.

We now find out that we are anti big business like Coke, according to the ex boss of Coke. Not just cos they prey on the weak but because NZ is the dearest country to buy, wait for it, Coke.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=108…

by Wolly | 21st Jan 13, 10:07am 1358716067

Don Brash's light bulb has gone out...was it ever more that 10 watts!

"The Government should turn a blind eye to illegal migrants working in Christchurch's rebuild because the city needs all hands on deck, former high-profile politician Don Brash says." press

by Stephen Hulme | 21st Jan 13, 10:40am 1358718039

Did Brash not state that potential workers should line up outside the Kerikeri Post Office for inspection to be eligible to work on kiwifruit orchards like his own?

Where and when do these ex-civil servants develop their illusions of grandeur? - and yet remain so stupid they allow ideology to stand in the way of workers earning enough to pay the taxes necessary to fund their gold plated NZ Government Superannuation Fund pension plans.