Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
No changes to report today.
TERM DEPOSIT/SAVINGS RATE CHANGES
None today here either.
IMMIGRANT INFLOWS KEEP THE PRESSURE ON
As universally expected, the RBNZ's November Monetary Policy Review did not change the Official Cash rate. But it did deliver a hawkish surprise. That caused the NZD to rise (after an earlier fall), and for the benchmark bond rates to rise. See updated changes below. ("Immigration" and "population" got 68 mentions in the main MPS document.)
FHBs RETICENT
Fewer first home buyers are taking out low equity loans. First home buyers remain active but are staying cautious on price.
TSB PROFIT UNDER PRESSURE
The half-year profit fell for TSB as revenue dropped and loan impairments rose. Their interim profit is down -35% on those factors.
ANOTHER BANK BOND
ICBC is raising $50 mln via a NZD bond issue, adding to an existing June 2026 Floating Rate Note. It has been priced at %, being 1.15% above the 3 month FRA settlement rate.
CO-OPERATIVE BANK INTERIM PROFIT FALLS
The Co-operative Bank's unaudited net profit after tax for the six months to September fell $4.3 million, or 43%, to $5.6 million as income fell and expenses rose. Net operating income dropped $840,000, or 2%, to $51 million, and operating expenses rose $4 million, or 11%, to $41.4 million. Between March and September deposits grew $119 million, or 4%, to $2.95 billion, and gross lending rose $138 million, or 5%, to $3.04 billion. Co-op Bank's impaired assets increased $987,000, or 28%, to $4.5 million.
AUSSIE INFLATION FALLS FASTER< BUT STILL HIGH
Australia releases a monthly inflation indicator, and the release today was for October with a 4.9% rate. That is down from 5.6% in September and well below the expected 5.2% rate.
SWAPS JUMP
Wholesale swap rates have probably fallen today. Immediately after the MPS, the 2 year swap was up +12 bps. The 10 year swap was up +9 bps. However, the key reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is unchanged at 5.62% and now just +12 bps above the OCR. The Australian 10 year bond yield is down another -12 bps from this time yesterday to 4.37%. The China 10 year bond rate is little-changed at 2.71%. And the NZ Government 10 year bond rate is down -2 bps at 5.04%, while the earlier RBNZ fixing was at 4.97% which was down -1 bp today (but before the MPS). The UST 10 year yield is now at 4.28% and down -12 bps from yesterday. The UST 2yr is now at 4.70% so that key curve inversion is lower at -42 bps.
EQUITIES RISE
The NZX50 is up another +0.5% in late trade today. The ASX200 is up +0.4% in afternoon trade. Tokyo has opened unchanged. Hong Kong is down a sharp -1.2% at their open. Shanghai is down -0.2%. Singapore has opened up +0.4%. Earlier today on Wall Street, the S&P500 closed up a minor +0.1%.
GOLD HIGHER
In early Asian trade, gold is now at US$2047/oz and up +US$32 from yesterday. Earlier it closed at US$2041/oz in New York and earlier still also at US$2026/oz in London.
NZD JUMPS
The Kiwi dollar is sharply higher, up +1¼c to just under 62 USc. It hasn't been this high since July 21. Against the Aussie we jumped as well, up +¾c to 93.1 AUc. Against the euro we are also up +¾c to 56.3 euro cents. That means the TWI-5 is at 70.3 and up +60 bps.
BITCOIN FIRMS IN USD
The bitcoin price has moved back up today, now at US$38,016 and +2.2% higher than this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.1%.
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35 Comments
I hope Mr Orr knows what he is doing.
The last six months he rushed to build an 18.5 billion dollar currency intervention capacity to prop up the kiwi. And now suddenly he seems to think different.
I am not sure if there is a strong correlation between population and inflation in literature. May be I am wrong.
If however there is a recession coming then he might regret going higher. There is more risk here than reward.
Edit: Bitcoin lower in NZD 😆
Another big sign of the imminent construction slump:
https://www.nzherald.co.nz/business/ryman-healthcare-cites-challenging-…
Yeah but that’s a daily event in Wellington. My definition of an economic soft landing is “not as bad as everyone expected”, not “everything is rosy”. The soft landing is not meant to be a good landing, its a binary between moderate or bad.
I’d say NZ had a soft landing after the GFC, you’d say moderate.
RIP to the mighty Charlie Munger. We all love his and Buffet's reference to the ol' "rat poison."
Indirectly they both owned more BTC than most people. Munger's stake in BRK is about 0.73% and BRK owns about 12.9% of Bank of America. BoA owns about 1.76% of MicroStrategy, which owns 158400 BTC. So Munger owned an estimated 2.625 BTC.
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