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
The Cooperative Bank has reduced fixed rates by between -10 and -20 bps for fixed terms 2 years and longer. All rates are here. Update: ANZ has cut most fixed rates, effective tomorrow. More details here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Unity Money cut call its TD rates. All updated rates less than 1 year are here, for 1-5 years, they are here. Update: ANZ has cut all its TD rates for terms of 6 months and longer.
NET MIGRATION GAIN STILL POSITIVE
NZ has highest monthly net migration gain since February. Large numbers of students pushed the monthly net migration gain to more than 5,000 in July. Interestingly, the departures of citizens seems to be fading in these latest numbers.
TOURISM AT MODEST LEVELS
Currently the international tourism sector is running at modest levels. Overseas visitor arrivals were 221,800 in July, an increase of 8,000 from the July 2023 month. The biggest changes were in arrivals from Australia (up +11,400), China (up +10,000) and the United States (down -13,100). Half of all visitors were from Australia (compared with the same in July 2019, pre-pandemic). 12% were from China, 7% were from the United States, and 3% were from the United Kingdom. Most of these 2024 proportions were the same as pre-pandemic - although in July 2019 the levels were 15% higher. We are getting "slow tourism" naturally. Separately, Australians are travelling more and Bali and New Zealand (in that order) are again their most popular destinations.
DAIRY PRICES HOLD HIGH
The overnight dairy Pulse auction saw SMP dart higher than expected to US$2800/tonne, its highest level since February 2023. The WMP component however slightly undershot expectations at US$3438/tonne, but holding its level of four weeks ago. It is not a serious weakness in a series of auction events where the WMP price has been a little volatile.
GENERATION CONSOLIDATION
Contact (CEN, #8) has agreed to take over Infratil-controlled Manawa Energy (MNW, #24) in a $2 bln power generation linkup. Manawa shareholders to be offered a mix of cash and Contact shares in a deal that brings two of the larger NZX listed companies together. Together, they will have revenues of $3.5 bln, making it larger than Mercury (MCY, #5).
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Manawa leaps, Contact drops, Infratil laughing, Kathmandu extends horror run.
TRYING TO BE A FAST PAYER
The Government is improving its payment times for invoices from suppliers. And it is reporting this performance quarterly now. More than 95% of invoices were paid within 10 working days, up from 93.6% in the previous quarter. 21 agencies are paying more than 95% of their invoices within 10 working days. They say this number will improve given the current momentum with key suppliers to Government becoming eInvoicing enabled.
BACK TO NORMAL?
Foodstuffs suppliers won only a +2.3% rise in prices they charged the supermarket chain in August. That is the least since late 2021.
AI SPREADS IN GOVT USAGE
Callaghan Innovation and the Whāriki Maori Business Network is to develop a multilingual GovGPT AI chatbot pilot project with an unnamed technology provider. This is an extension of an extending trend to use AI in various ways (read article for existing uses).
SUBSIDISED BUT STILL LOWER SALES
China's August vehicle sales were soft. They were 2.45 mln units in the month, -5.0% lower than for August 2023. And this was despite a Beijing program to boost this key domestic market. 1.1 mln of the sold units (45%) were EVs or hybrids. In July, sales were -5.4% lower that a year ago. Without the support, you have to wonder what levels they would be at.
SWAP RATES HOLD AGAIN
Wholesale swap rates are probably little-changed today, maybe softer. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 5.11%. The Australian 10 year bond yield is down -5 bps at 3.91%. The China 10 year bond rate is holding at 2.13%. The NZ Government 10 year bond rate is down -5 bps at 4.22% and the earlier RBNZ fix was at 4.18% and down -1 bp from yesterday. The UST 10yr yield is down -8 bps at 3.63%. Their 2yr is now at 3.59%, so that curve is now positive by +4 bps.
EQUITIES QUITE MIXED
The NZX50 is little-changed in its late Wednesday trade. The ASX200 is down -0.2% in afternoon trade. Tokyo has opened its Wednesday trade down -0.8% at its open. Hong Kong is down -1.3% and Shanghai has opened down -0.8%. Singapore is up +0.5% at its open. Wall Street rose today with the S&P500 up +0.4%.
OIL DROPS
The oil price is down -US$2.50 from this time yesterday at just on US$66/bbl in the US, and now at US$69.50/bbl for the international Brent price.
CARBON PRICE STILL IN NARROW BAND
The carbon price is at $61.40/NZU, still in its new narrow band and only the smallest dip today. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD UP
In early Asian trade, gold is up +US$16 at US$2519/oz.
NZD MARGINALLY FIRMER
The Kiwi dollar is up +10 bps from this time yesterday, now at 61.5 USc. Against the Aussie we are up +20 bps at 92.4 AUc. And against the euro we are up +10 bps at 55.7 euro cents. This all means the TWI-5 is +10 bps higher at 69.4.
BITCOIN FIRM
The bitcoin price is up +0.5% from this time yesterday, now at US$57,084. Volatility of the past 24 hours has been modest at just on +/- 1.4%.
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82 Comments
‘Why did the S&P 500 total return lag T-bills from 1929-1947, 1968-1985, and 2000-2013?
Why did it lag Treasury bonds from 1929-1950, 1968-1987, and both 1998-2020 and 2007-2020?
Answer: Extreme starting valuations. Yellow bubbles.
Not a timing tool. Not a forecast, Just FYI.’
https://x.com/hussmanjp/status/1833577629389045837?s=46&t=MUwQeKa7MkEJ7…
Lynn Alden's September newsletter is super interesting.
Securities and Exchange Commission Chair Gary Gensler caught out last night adding comments to a speech to be given about not scaring the people about an imminent crisis. These comments were inadvertently included in a document uploaded to the SEC's website. The document soon made it to X and the SEC scurried to have the document revised.
You would think that an organization of this size and importance would understand how to protect themselves better.
SNP500 futures are really not liking the debate.
Mind you, CPI is tomorrow for the USA with a 2.5% forecast. Might come in lower.
At this point USA are officially into the "sweet spot" for inflation. Will be fascinating if inflation just keeps going lower and lower while the economy dries up
He explains that this 65 % , actually only means a 1 or 2 % lead in some states. It's based on the dems not getting an expected swing after their convention. He removes the swing correction and they are neck and neck. But fair to say Trump is doing better than he expected.
Yeah watched the whole debate live. Trumps train of thought is not good. Basically showing his narrow mindedness, comes with age I guess.
The only bright moment was at the end when he pointed out that Harris promised a lot but had achieved very little as Vice President.
The funny part for me was when he claimed that while he was President he created the best economy in the history of the World.
I couldn't stop laughing when he screamed out in desperation:
They're eating people's pets!!!!
I'm still laughing now - just recalling it. It's hilarious; when someone tells him he's wrong - he just has to double-down; and his follow-up claim is even more desperate than the statement that he got corrected on in the first place.
The RBA wants Aussies to be poorer. The reborn Michael Pascoe writes.
For mine, the real headline was that the RBA wants Australians to be poorer; to have a lower standard of living than they currently have. Think about that – average Australian living standards have been going backwards for two years, but the RBA thinks they’re still too high and wants them down.
That is what follows from the Governor’s answer to a question about the preceding day’s pitiful GDP growth numbers – COVID aside, the weakest growth since the early 1990s recession. Hugh Riminton asked why the bank wasn’t softening its interest rate predictions, given that household consumption had come in significantly lower than the RBA forecast.
https://michaelwest.com.au/the-reserve-bank-of-australia-really-does-wa…
classic media upholding journalistic integrity through non-bias ...
Of course all the false / misleading claims to be checked are Trumps ...
https://www.stuff.co.nz/world-news/350411750/trump-v-harris-debate-fact…
While I agree in principle with that statement, I do think a lot of Kiwis have started to take American politics way too seriously in recent years.
I see friends - none of whom can vote in US elections - talking about "their" team (Democrats, or sometimes Republicans).
FWIW I think they're both garbage. If given the choice, I would have voted for brain worm man Kennedy but it's a shame to see him throw his weight in behind Trump, if only because having some form of notable third party candidate is good IMO.
You can't convince me that Harris - who was catastrophically unpopular when she ran against Biden in the primaries - is suddenly the second coming, as the media would have me believe. I suspect if she claimed she could heal the sick and walk on water it wouldn't be challenged. The largest you-know-what polishing exercise in human history at this point.
Trump ... well need I say more. I actually thought he was kind of fun and exciting in 2016 (I remember the memes being off the charts) and he brought a new kind of energy that was refreshing in a world of endlessly boring politicians. Of course he turned out to be a bit of a flop, a naughty boy in many respects, and is a complete husk of 2016 Trump at this point.
Why are Kiwis debating on who should be winning an American election?
There could be quite severe global and local consequences if he gets in again - and we believe what he says about retribution. Don't forget, he would have immunity from criminal prosecution for any acts taken in fulfilling his presidential role, thanks to the Supreme Court.
Which means he/they (his new administration) have a 'list' and it extends to journalists, bloggers, election workers, political opponents, civil servants, judges, educators , celebrities- you name it Anyone who had a microphone and a following and opposed him or made fun of him in any way - the retribution won't be via the courts - it'll be door knocking/capture and straight to the gulag.
Why is that a problem for us? Well, all these folks who know who they are will be seeking political asylum en masse - and we'll be a destination that punches above our weight. But we have an extradition treaty with the US - and they'll want their political prisoners back based on some Trumped-up (uncanny pun) charge. And what do we do? Refuse to deport them - and we're an enemy (and an easy one to pick off, for sure).
Make no mistake - Trump admires dictators for a reason He's said he'll be a dictator on Day 1 only - and I suspect that's to issue the 'list' of warrants for arrest.
This is a good global ranking index to study up on;
https://www.globalfirepower.com/countries-listing.php
Directly quoting his post on it;
He continued, “Please beware that this legal exposure extends to Lawyers, Political Operatives, Donors, Illegal Voters, & Corrupt Election Officials. Those involved in unscrupulous behavior will be sought out, caught, and prosecuted at levels, unfortunately, never seen before in our Country.”
The threat was one of the most wide-ranging he has made running for president after his 2020 defeat — going beyond threatening old foes and issuing warnings to those involved with the current election.
https://www.nbcnews.com/politics/donald-trump/trump-warns-prison-senten…
I can never understand why people do not take him at his word.
https://www.youtube.com/watch?v=PRpfNJMpHcc
Is it because they think he's a buffoon or a joke?
USA & UK politics is always a healthy reminder that no matter how how bad NZ politicians (of any main party) are, they're usually a big step up from the leaders of the free world.
Scary isn't it.
Our village mentality has some +ves as well as -ves: there was a time not so long ago when any NZ politician who got too far up their own ego's would have been given a reality check on the street & in the historically responsible MSM the next day.
This coalition is copying and doubling down on the failed Tory policies that brought the UK to it's knees. I'm not sure what you mean we're not as bad as the UK, not yet, the coalition is doing it's hardest to stoke culture wars which end in .... you guessed it UK and US style politics.
I thought the same about the UK, but worth noting that the new PM Starmer (and to some extent Sunak in Opposition) seem to have firmly turned a corner on the country's decent into 'Post-Truth Politics'.
Hopefully NZ can ditch the current ideological-driven populist aspects of our current Government - before too much damage is done.
Irrelevant anyway.
Taytay is yesterday's news. It's all about Sabrina Carpenter now, Chappell Roan if you're a bit more alt-y in your tastes. Check the charts, and the vibes on social media - you know it to be true ... RIP James Earl Jones.
She'll have to dump the football star boyfriend soon to get back to #1.
TBH I wouldn't be surprised if she made the endorsement just for some guaranteed headline coverage.
Source: My wife, who is a huge Taytay fan, and also the teenybopper girls she teaches at school.
Not a hater btw, I went to her concert and it was excellent. One of the all-time greats in live performance, and I won't be told otherwise.
I confess that I have never knowingly listened to any TS songs in my life. Most of my musical tastes ended last century (I'm 70 next year).
Although I've been listening to some good a cappella this year (Home free) & also enjoyed Disturbed & Imagine Dragons a few years ago
That's what I thought too, until I went to the concert (as my wife didn't want to 'play favourites' with her friends so it was easier to take me).
I am telling you now, even if you'd never heard a single one of her songs you'd have a blast - and I've been to plenty of the old greats from Bruce Springsteen, to Elton John, to the Stones and beyond.
Great stage show, musicians, dancers, backing singers etc and she is a consummate professional and very talented performer (even if many of the songs are a bit meh lyrical content-wise)... I wouldn't have believed it until I saw it and heard it myself.
Don't think her endorsement means much politically, I'd imagine most of her biggest fans - based off anecdotal observation at her concert - don't have the vote yet lol.
Regarding the cat eating…
Have you seen this video currently circulating?
https://x.com/kamilijj/status/1833406485235204397?s=46&t=MUwQeKa7MkEJ7r…
(honestly difficult to tell fact from fiction these days)
That body cam footage is of an American born woman in Canton, Ohio - not Springfield and not an immigrant from Haiti;
https://en.wikipedia.org/wiki/Springfield,_Ohio,_cat-eating_hoax?fbclid…
a 27-year-old woman was arrested in August 2024 in Canton, Ohio on charges that she killed and ate a cat. She was US-born, not an immigrant. Neither had any connection to Haiti or Springfield. In a third case, police received a report that Haitians stole geese. According to police, they found no evidence and no geese.
Which exactly? I looked up unemployment and can see the spike she was referring to. Mostly because of covid I expect, but still not a lie.
Now hordes of illegal immigrants stealing and eating peoples cats and dogs is something he supposedly saw mentioned on TV, so I guess that is technically factual from that perspective. But you kind of expect a bit more from a grown adult who wants to be the USA president.
European Commission unexpectedly wins its 14.2 billion euro tax case against Apple and Ireland before EU's highest court.
https://edition.cnn.com/2024/09/10/tech/europe-ruling-apple-tax-google-…
Watercare is under fire for keeping a $20 million deal with Waikato-Tainui under wraps.
It’s been revealed the Auckland Council-controlled water provider last year signed up to paying $1 million a year, for two decades.
https://www.kiwiblog.co.nz/2024/09/no_one_owns_water_but_someone_makes_…
https://thespinoff.co.nz/wellington/10-09-2024/the-mystery-of-the-kille…
A good laugh but sad too
Someone decides to commute to work by bike and gets squirted by a passer by for no reason other than they are riding a bike, and making no difference to said persons travel or day? Petty. Your mate will likely one day have a rage when one pushes back and smacks the back of their vehicle leaving a mark or dent as a result.
It seems that Australia’s construction sector has been inundated with suits, rather than tradies, which has bloated the workforce and contributed to lower productivity.
“The rapid rise in the number of professional workers that are now required to deliver projects across the country is at odds with the number of workers ‘on the tools’”, RLB’s Oceania director of research, Domenic Schiafone, noted last month.
“In 2003, professional workers accounted for 28% of the construction workforce. By 2023, this had risen to 38%.”
I suspect a similar issue in NZ; too many people want jobs working out what other people should do, and not enough people to actually do it.
With the irony being the quality of plans and project management has declined markedly over the past two decades.
Plans and specs are terrible. There's a lot of cut and pasting going on out there, many products are being spec'd that aren't fit for purpose, and one page on a plan can contradict another.
Even worse when it's a retrofit of an existing building, it's pretty obvious in cases where the designer/architect hasn't even been to the site to check out what's already there.
Hard to put a finger on any one cause.
Sometimes I feel like the ease of communications may contribute. Back in the day, I'd have to physically go to an architect/project manager's office and physically uplift plans (or they'd get mailed). And printing plans was expensive. And they were often hand drawn. So they were sort of set in stone to an extent.
Now we can whip around emails, RFIs and variations at the speed of light, it's almost like a plan is now a rough draft that gets worked out on the fly, with less due diligence being applied before the plans are even tendered. It's not uncommon to get 10+ plan revisions these days. And the whole process wastes so much more time and money, for a dubious result.
I think ‘computerisation’ of design hasn’t helped. It’s supposed to reduce error but I am not convinced. As you allude to, technology has made things ‘easier’ but that breeds laziness and shallow thinking.
Nothing like manual design, in my view. You think differently with pencil.
But then I am a dinosaur and apparently AI is going to wipe out architecture as a profession…
I'm a firm believer that many of the project managers and office types need to go through a cadetship process where they spend a couple of years in the field and on the tools. Even better would be to "promote from the ranks" and give them a year-on, year-off contract through uni. Hell, I'm going back to school in my 30s and 15yrs on the ground has got me job offers already.
I'd say the default model of going to uni straight out of school for most normal kids is broken, however many young people don't see another option. We have a unusual respect for manual labour in this country but it's not enough when wages flatline and assets keep rising.
Fundamentally though, and I've said it before on here, is that decreasing social mobility in society leads to stupid people in top jobs. Sadly we have an emergent class system where the flows of wealth and opportunity are increasingly determined by how much debt your dad took on rather than your ability, talent and industriousness.
Agreed. You cannot do any of this without some level of practical experience. There's people making project programmes now who don't even know the basic sequence of events in building something.
Yeah, let's have a plumber install a bathroom while the flooring is going in.
Fundamentally though, and I've said it before on here, is that decreasing social mobility in society leads to stupid people in top jobs.
Is this based on a certain requirement for diversity targets at the top of corporates? wondering if you also need a skirt and be able to perform a Karakia at the start of a concrete pour like you do a corporate management meeting?
I'm a firm believer that many of the project managers and office types need to go through a cadetship process where they spend a couple of years in the field and on the tools.
Isn't this how it used to be done? Both of my parents are Quantity Surveyors and they both went through a fairly long cadetship rather than university. Now to get the same job you need a four-year degree which I imagine is quite a bit less hands-on than a cadetship was.
Is the Polish foreign minister the most impressive politician in the world?
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