Here are the key things you need to know before you leave work today.
TODAY'S RATE CHANGE
HSBC today came roaring back into the mortgage market today with three hot 'specials', all for 5.85% - if you are a 'Premier' customer. The new rate applies to fixed offers of 1, 2 and 3 years. The three year one is especially competitive.
HELP FOR NORTHLAND FARMERS
Both BNZ and ANZ have announced discounted interest rates for Northland farmers suffering through their flood conditions.
CONSUMER PRICE RISES TAME
Today's CPI inflation data came in almost exactly as the RBNZ had assumed. There are no surprises here. It was only in two groups that we see any pressures - central and local government charges (+3.6%) and housing and household utilities (+3.4%). Otherwise the overall +1.6% pa reflects most items. However, the low number does raise the question about whether the RBNZ will actually follow through with an OCR increase next week.
HANGOVER ?
Has the 'rock star' economy overdosed on white powder? While you could hardly call it 'carnage', todays data certainly gives the sense things have been taken to excess and we may be about to 'pay' with some withdrawal symptoms. ANZ now sees a possible 'sub $6' Fonterra payout. Others see a sharp deterioration in our just-improved current account.
CHINA DATA IMPRESSES MARKETS
Today's data dump from China for June has impressed, mainly because most measures came in as expected and there was relief there weren't any surprises. Q2 GDP was at +7.4%, retail is holding up strongly at +12.4%, and industrial production came in at +9.2%, better than the expected +9.0%. The US dollar rose sharply on the releases because it is the US economy's demand that is driving the Chinese gains. The NZ dollar fell back relatively.
MORTGAGE APPROVALS WEAKER AGAIN
Actually, these approval volumes are now at their lowest (for a regular non-holiday week) since September 2011. We are not too far away from calling the trend a 'slump'. Values are holding up better, but it only the expensive end of the market that is keeping in mortgage industry going. Prices might be grabbing the headlines, but volumes are are eroding seriously.
WHOLESALE RATES
Wholesale swap rates fell sharply across the board today with the two and three year terms down -9 bps, one and four years down -7 bps and five years down -6 bps. The 90 day bank bill rate was down another -1 bp late in the day at 3.66%.
OUR CURRENCY
The NZ dollar has fallen sharply today and is now at 86.9 USc, more than 100 bps lower than this time yesterday. The combination of the poor dairy prices, the CPI, and the unexpectedly good China data all saw it tumble. It is also down at 93.2 AUc. The TWI is at 80.9
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