NZSX50 - Good News!

[bull....]

hilarious ASB drops 4bp of there mortgage rates after a .5% cut to the ocr lol guess there wanting even more record profits next year. wont stimulate the housing market any that small cut lol

[Filthy]

hilarious ASB drops 4bp of there mortgage rates after a .5% cut to the ocr lol guess there wanting even more record profits next year. wont stimulate the housing market any that small cut lol

will be waiting for another bank to blink first, then they will all follow.
agree though mate, its not all going to be passed on is it! lol

[enzed staffy]

sadly the effects will be passed on in an unbalanced fashion to the banks benefits - the term deposit rates will almost certainly be cut promptly, mortgage rates.....?not so much

[dobby41]

hilarious ASB drops 4bp of there mortgage rates after a .5% cut to the ocr lol guess there wanting even more record profits next year. wont stimulate the housing market any that small cut lol

How much did they drop their deposit rates?
The OCR doesn't really drive long term mortgage rates.

[bull....]

How much did they drop their deposit rates?
The OCR doesn't really drive long term mortgage rates.

correct to a degree the ocr can more directly influence short term lending but also swap rates and these swap rates are what drive longer term lending. swap rates have dropped heaps in the last week in anticipation of lower interest rates. thats why i laugh at the measly 4bp reduction in 2 yr rate by asb when swap rates have dropped by massively more than this.

[percy]

Think margin.
Bank borrows at 4% and lends at 6% their margin is 50%.
So for every $1 mil they borrow they make gross $200,000 which would cover overheads and produce a healthy profit.
Should they borrow at @ 2% and still lend at 50% margin their !mil borrowed would only produce $100,000 to cover overheads etc.
Most overheads are fixed,staff,rents etc,so it is harder for them to reduce what they charge you,[so they can stay in business].
That is why higher interest rates work in their favour.

[yabster]

sounds like you hold a few banking stocks Percy....

[percy]

sounds like you hold a few banking stocks Percy....

No.Just a lot of HGH and TRA.
Figures are the same for finance companies.

[bull....]

swap rates in NZ had massive falls yesterday. I wouldnt believe banks saying fixed rates wernt dropped because it was priced in as some are saying in the media , what a load of crock the re action in the bond and swap markets means traders were not pricing it in therefore the banks are increasing there margins by not passing on the cuts.
the ocr cut will do little to stimulate demand in the economy mainly because if banks dont pass on the cuts there no more money in peoples pockets and with 80% of people odd on fixed rates a big drop from over the top rates in floating is going to do jack s..t to help the economy.

So I am thinking negative rates are coming because its a worldwide race to the bottom at the moment by some central banks ( look at the huge drop in global rates tonight , massive) and nz being so exposed to this is not really going to be able to do much to stop the impact coming. bit like a stock trend short term doenst change the long term trend the only thing to help nz in the long run is fiscal and i wouldnt rely on the govt coming to the rescue because by the time the working group has finished there conclusions it will be too late lol.

get your income why you can

[bull....]

from rock star economy to rates near zero nz economy flops

https://www.bloomberg.com/news/artic...d=premium-asia