Here are the key things you need to know before you leave work today.
GOOD AUSSIE DATA
Today Australian GDP data was released for Q1 2014 and it showed growth at +3.5% year-on-year and +1.1% for the quarter. This was better than expected and came despite inventory drag. For us, it is having the effect of raising the AUD, so the NZD is slipping against it, and being marked down against the USD also.
FAST WORK
Retail chain PostiePlus only went into voluntary administration yesterday, but today PwC has announced they may have a deal to sell it to an overseas retail group. No word on who that is yet. They say it could be about 4 weeks yet to wrap up a final deal.
CHRISTCHURCH HOUSING REBUILD MOMENTUM
Nick Smith is out today touting progress with the residential side of the rebuild. Today he focused on the Housing NZ progress and noted the surge of consents for repairs and new housing overall. he reckons that by 2016 the pre-quake levels of housing will be all restored.
BUILDING ACTIVITY AT 11 YEAR HIGH
Nationally, building activity surged 16% over the March quarter, a much stronger than expected catch-up after some surprisingly flat outturns over 2013. The post-quake rebuild in Canterbury continues to power ahead, and housing construction has also risen strongly in Auckland. The surge reported today may well mean economists will need to raise their Q1 and Q2 GDP forecasts.
NO RETAIL RATE CHANGES TODAY
Not even a small one.
FOCUS ON RBNZ REGULATORY OPTIONS
The banking regulator said it is looking at debt servicing limits in future, otherwise known as mortgage caps. They first mentioned this option more than a year ago but it has gotten some 'news' traction today. Banks won't like the implication and they will be joined by the NZ Initiative and the Labour Party based on today's reactions. Odd bedfellows. To be 'affordable' borrowers need to borrow what they can't save, seems to be the message by RBNZ's critics.
NZ COMMODITY PRICES SLIP
Today's announcement of the May ANZ commodity price index saw it fall 2.2%, but although the decline was led by both dairy and forestry (as expected), there were seven sub-categories that actually rose. Dairy might grab the headlines but its not all one-way traffic - in May at least.
WHOLESALE RATES
Wholesale swap rates were up across the board today in a clear firming of a positive yield trend. Short rates are up only 1 or 2 bps, whereas long rates are up as much as 4 bps for the 5 yr and 6 bps for the 10yr term. The 90 day bank bill rate is up today and now at 3.43%.
OUR CURRENCY
The NZ dollar started out today lower and got pushed even lower when the good Aussie GDP data came out. Late this afternoon, the USD is at 84.1 USc, the Aussie is now at 90.9 AUc. The TWI is at 78.8.
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