Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report.
TERM DEPOSIT RATE CHANGES
No changes here either.
A QUIET MARKET
Major Auckland realtor, Barfoot & Thompson has reported that sales volumes were subdued in July but prices held their ground, and unsold inventory was the highest for a July since 2011.
New Zealand car sales data for July is out and that shows another strong month. More than 8,000 cars sold in July which was the highest July since 1985. 65.7% of all cars sold were SUVs, second only to the June proportion. Commercial vehicle sales were an all-time record for a July. (Used import registration data will come early next week.)
TAME JOBS OUTLOOK
Looking past an unusual jump in healthcare ads, the ANZ job ad monitoring shows a flat jobs environment, suggesting that our unemployment rate will hold steady at 4.5%.
NO SIGN OF CREDIT STRESS
The most direct assessment of personal credit stress is our bankruptcy data – and that is not yet showing any evidence at all of rising bankruptcies or No Asset Procedures. The long-term down trend of these credit stress markers is still in place, maybe surprising some gloomsters. Even more remarkable is the continuing sharper decline on a per capita basis. Perhaps we should look at the rise in overall household debt, now at $268 bln and up +5.8%, on a population adjusted basis. In the past year our population has risen +2.0%, so that puts the nominal increase in overall household debt at just +3.8%, and on a ‘real’ basis, just +2.3% pa.
PER CAPITA REAL DEBT GROWTH
In fact, since the start of 2009 on an inflation and population-adjusted basis, household debt has only increased by +14.5% (or about +0.5% per year). Since 2015, the rise on that basis has picked up up to +4.0% pa.
A2 Milk has increased its shareholding in Synlait Milk from 9.1% to 17.4%.
A BETTER SYSTEM
The IRD is promoting legislation allowing them to refund taxpayers who they think have had too much deducted during the year. They say this will involve about 750,000 people. They will do it for free. (It may also seriously crimp the style of the commercial tax refund companies who charge a substantial fee for their services.) But there is a downside – the same system identifies those who owe money, and the new system will automatically seek recovery of those underpayments – which they say could be as many as 110,000 people.
SWAP RATES SOFT
Local swap rates are dowen -1 across the board. The UST 10yr is holding steady at 2.99%. The Aussie Govt 10yr is at 2.74 and unchanged today, the China Govt 10yr is at 3.49% down -2 bps, while the NZ Govt 10 yr is at 2.83%, down -1 bp. The 90 day bank bill rate has also shed -1 bp and is now at 1.90%.
The bitcoin price is now at US$7,342 and down -4.5% from this time yesterday.
NZD LOWER BUT STILL IN RANGE
The NZD is noticeably lower at 67.3 USc. We are also a little lower on the cross rates at 91.4 AUc, and the euro at 58.1 euro cents. That leaves the TWI-5 at 71 which puts it at about the same level were were at one month ago. Since mid April our currency is -5.2% lower so that downward trend has stopped on a TWI basis.
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