Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
ICBC cut rates today, including their floating rate. WBS also cut their 1 and 2 year fixed rates. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Investment-grade rated Liberty Financial cut its TD rates hard today, probably a realignment ahead of the upcoming RBNZ Depositor Compensation Scheme which they will no doubt be in. The Police Credit Union also trimmed rates today. China Construction Bank cut TD rates today. All updated rates less than 1 year are here, for 1-5 years, they are here.
CONSENTS, YES. BUT STARTING TO BUILD?
55,000 housing units have been included in the weekend-released Fast-track list. A luxury golf course, a ski resort village, and a new roof for Eden Park are all included in the mega-list of projects to be included in the Fast-track Approvals Bill.
'EXPERTS' DIVIDED
Members of the 'Shadow Board' the NZIER assembled to state views on the Official Cash Rate and agree the OCR will be cut this week, but are mixed over whether it should be a 25-point or 50-point cut.
MISREPRESENTATION AT SCALE
AA Insurance has been ordered to pay a penalty of $6.175 mln for failing to apply multi-policy and membership discounts, as well as guaranteed no claims bonuses. The High Court has also found the misled customers about its multi policy discount offer in marketing material and misrepresented that certain eligible customers would receive its guaranteed no claims bonus for life. Justice O’Gorman said: “Customers are entitled to feel secure that insurance premiums will be charged, and discounts applied, in accordance with policy terms and as represented in marketing material. Customers cannot be expected to double check the precise details of transactions. They are entitled to trust the accuracy of their insurer’s systems and processes.”
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Warehouse & FBU make some recover, Gentrack up, Kathmandu down again. Others trumpet Fast Track approval inclusions.
PACE EASING OFF BUT NOT YET BACK TO 'NORMAL'
The pace of supplier cost increases to Foodstuffs supermarkets has remained static over the last two months, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index showing an average 2.3% increase in what suppliers charged in September 2024, compared to a year earlier. In September 2023 they rose +6.1%. Prior to 2021 prices were rising less than +2% pa.
STAMPEDE SHORT
The stampede to six-month fixed rate mortgages reaches a crescendo. The latest Reserve Bank figures show that around 40% of new lending in August was for six month fixed rate terms.
SIGNS OF MODERATION?
The September update of the Melbourne Institution inflation gauge is suggesting a quicker easing. It was up +0.1% from the prior month and less than the expected +0.3% rise. And it is now up only +2.6% over the past year.
PUNCH TWO DUE
Climate-change denier state Florida is expected to be hit with another hurricane tomorrow. NOAA says "Milton is forecast to intensify rapidly during the next couple of days and become a major hurricane on Monday [EST]." The first punch was Helene. These types of events affect insurers perceptions of risk, worldwide, which in turn affects reinsurance availability and cost, and that flows to retail premiums (and even insurability). This is why "climate change" is both a monetary policy risk, and financial stability risk.
SWAP RATES HOLD, BOND CURVES STEEPER
Wholesale swap rates are probably little-changed today at the short end. Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 4.78%. That is -47 bps below the OCR and its lowest level in ten months. The Australian 10 year bond yield is up +19 bps at 4.25%. The China 10 year bond rate is unchanged at 2.16%, unsurprising given their holiday. The NZ Government 10 year bond rate is up +7 bps from this morning at 4.37%. And the earlier RBNZ fix was at 4.33% and up +3 bps from Friday. The UST 10yr yield is now at 3.84% and up another +5 bps from yesterday. Their 2yr is now at 3.69%, so that curve is still positive by +15 bps.
EQUITIES UP EVERYWHERE, EXCEPT HERE
The NZX50 is down -0.6% in its late Monday trade. The ASX200 is up +0.6% in light trade out of Melbourne only. But Tokyo is taking off, up +2.1% at its open. And Hong Kong is up +0.9% at its open. Shanghai is closed today and be back in business tomorrow. Singapore is trading up +0.4% at its open. Wall Street is showing it will open up +0.8% tomorrow via the S&P500 futures trade.
OIL SOFTISH
The oil price is down -50 USc from this morning at just on US$74/bbl in the US, and now just over US$77.50/bbl for the international Brent price.
CARBON PRICE WAVERS
The carbon price is holding at $63/NZU. Volumes traded are still light and bidding is soft, so the price may not hold up. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD SLIPS
In early Asian trade, gold is down -US$7 from this morning, now at US$2646/oz.
NZD ON HOLD
The Kiwi dollar has held unchanged from this morning's open at 61.6 USc. Against the Aussie we are still at 90.6 AUc. And against the euro we are up a marginal +10 bps at 56.2 euro cents. This all means the TWI-5 is little-changed at 69.7 from this morning.
BITCOIN UP
The bitcoin price is up +1.7% from this morning, now at US$63,803. Volatility of the past 24 hours has been modest at just on +/- 1.7%.
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91 Comments
If that's Michael Hills 'The Hills Residences Limited and The Hills Holdings Limited' that's being fast-tracked in Otago for more golf, I'd have thought it was already well financially supported? Maybe it's just had a few hurdles removed. Like when he painted his house pink, and that wasn't one of the approved colours.
Yes, American investors are in partnership with the Hills for the redevelopment according to this article:
I would think if a major hurricane hits Florida soon, it will swing to the democrats.
Really? I thought Americans were outraged at FEMA's and the federal govt's response while they shower the Ukrainian ruling elite with money.
I guess it all depends what narrative gets the best traction.
Trump has concepts. He didn't promise to do a fix to the Wisconsin dairying after his do- over by the Canadians in his rewritten NAFTA deal. It use to be 1 in three farms were in dairying, by the time 2019 rolled around it was 1 in 10. There are bigger properties but many went to the wall. Look at the comparison of our dairying over that time period and when John Key says Trump will be great for the economy I just sigh.
Many of those Americans want the end of the world and they think God controls the climate just saying.
True. Like many Aotearoans think they will end climate change by driving an EV and adopting the most appropriate groupthink.
In that sense, we're quite similar to America.
Yeap. We have become rather delusional in this country.
to think we are going to save the world even though we do better than pretty much the rest of the world is insane.
seeing charts from the world bank that show how China emits more carbon emissions than the entire western world put together and there emission are still increasing at an exponential rate (as they are still building 2 coal powered plants a week) I would say they have a lot to do with our future climate.
And I haven’t started talking about India.
Yeah that argument doesn’t work because we aren’t building coal power plants.
China doesn’t care about climate change. Their actions show they don’t.
so nothing we do is going to make a difference so what the point of lowering our standards of living?
We are better off building resilience in our infrastructure.
show how China emits more carbon emissions than the entire western world put together
One-third of the world's manufacturing occurs in China, the majority of which ends up in the West.
Meanwhile, our clean-as grid craps itself with only a bunch of paper mills and milk driers connected to it.
Yeah well I was moaning about it 20 years ago. But our CEOs decided they wanted to be even richer.
The rich class decided they want to return to the good old days of lords and peasants.
That’s why in basically every western countries the gap between the rich and poor has exploded in the last 25 years.
my solution to our power problem is the same as it has been for 15 years.
1. subsides domestic and commercial solar installs especially with battery backup. It’s the quickest thing that can be done to take pressure of the grid.
2. Massive penalties are needed for companies who dump water from the lakes to try and affect the wholesale price.
3. Government start building power generation infrastructure and look at buying back the existing infrastructure from power companies. Operate the power industry like telecoms. Government owns the infrastructure with Chorus and sells its use to all the rest which has result in much cheaper broadband prices. The same would work with power.
4. national gas is still needed for decades to come.
I thought it was the Democrats that controlled the weather - well MTG seems to imply they do.......
https://www.rollingstone.com/politics/politics-news/marjorie-taylor-gre…
( I secretly wish God would take them all away).
The joke is that climate is but one facet of a multi-faceted predicament.
Funny how DC 'gets' climate but ignores the rest (there are 9 recognised Planetary Boundaries, we're overshot 6 of them, at least)
As for social reactions - we seem to have a fatal tendency to 'rebuild'. Brownlee and the waste of time that is Chch, being a classic example. .
"Liberty Financial cut its TD rates hard today, probably a realignment ahead of the upcoming RBNZ Depositor Compensation Scheme which they will no doubt be in". The bar seems to be quite low for the Deposit Guarantees scheme, it would be incredibly difficult to assess a company such as Liberty. If there is another financial crisis it could get ugly. As long as no tax payer money is involved. There a quite a few B graders that are going to get this guarantee. I hope all the lessons of 2008 have been taken into account.
There is already a chopper service from the very basic Oamaru Hospital to Dunedin. Quite usual to hear the chopper flying around overhead. So in a emergency you might be okay. But is no official regular shuttle service for outpatients, someone currently does it for koha out of kindness.
Chinese stock market (using the CSI300 Index as benchmark) is up 25% in the last two weeks.
Last year, Western investors pulled out tens of billions of dollars from China.
Despite what people think, if a country just prints money (QE), the value of the currency eventually weakens. The yuan has actually strengthened against USD over the last month.
You do realize that the yuan trades in a very narrow band and is not floating (this would restrict the range in which the yuan can trade) .
https://www.investopedia.com/articles/forex/061015/top-exchange-rates-p….
Yes I do. That is partly why China is classified as a "non-market economy" by the US (we're too cowardly to do the same). The other countries on the blacklist are Vietnam, Russia, North Korea, Belarus, Azerbaijan, Turkmenistan, Uzbekistan, Kyrgyz Republic,Tajikistan
.
That is partly why China is classified as a "non-market economy" by the US (we're too cowardly to do the same).
Cause we've been calling such places "managed" or "planned" economies for decades.
If America wants to make up new terms and still use imperial measurements whatever.
No P. NMEs as defined by the US are subject to higher tariffs, specifically anti-dumping duties when exporting to the U.S., which can hinder their competitiveness in international markets. China could crush Aotearoa by imposing duties on our exports.
Point is hypocritical for the US and the Anglosphere to talk about currency manipulation and monetary hegemony.
That's not defining them, that's how they're reacting to them. Pretty much all of those entities fall under what you'd term a managed economy.
Which as you've suggested, is potentially any economy and currency, because a 100% unadulterated capitalist economy doesn't exist, outside of a handful of states with virtually no government (think Somalia).
There is somewhat of a distinction you can draw between an openly democratic market economy, and the sorts of political systems and economies that exist under your group of nations.
I'd highly recommend you take a trip to both Koreas. It's probably the best current example of how different the two systems can be. Same people, incredibly different outcomes and lives.
No P. NMEs status is determined by the U.S. Department of Commerce for the purposes of antidumping and countervailing duty laws.
https://vn.usembassy.gov/department-of-commerce-final-decision-in-revie…
Yeah, did you read how they establish that
the extensive government involvement in Vietnam’s economy distorts Vietnamese prices and costs and ultimately render them unusable for the purpose of calculating U.S. antidumping duties.
The government is managing the economy. As they are in basically all of those countries (I haven't researched all of the stans).
"Grocery price pressure eases" I noticed a tinned product I buy had a new label, and yet again, it has got smaller (450g to 420g) but the price has remained the same. I understand this 'shrinkage' issue is widespread and in hidden inflation. My procduct is hiding 6.7% inflation. Also a lot of things that went sky high when there were the supply chain issues have remained at that price.
Probably an urban myth, but I remember hearing a story many years ago where somebody negotiated to sell an idea to colgate to increase their sales by 10%.
The solution? Widen the nozzle by 10% and people will keep putting the same length of toothpaste onto the brush.
I see more repent the end of the world is nigh stuff
https://www.rnz.co.nz/news/business/530062/economy-is-cratering-call-fo…
Can anyone actually show that the economy is actually cratering and this is not just hyperbole. I for one don't think it is - just people who didn't do enough planning are coming unstuck. Just saying.
Well now, we have:
- record numbers of people on a main working-age benefit - around 1 in 8 working-age kiwis
- company liquidations in September broke all previous records for the month
- year-on-year job growth is negative for the first time since the GFC and showing little sign of slowing its descent
- the credit growth we rely on to keep our economy ticking over is being overpowered by offshore savings (current account deficit)
- a Govt that is cutting spending into a recession because they seem determined to repeate the mistakes made by the UK in the early 2010s (mistakes that were avoided by Key / English, I should add)
But, other than that, yeah, sure we're all good.
We have a Finance Minister absolutely denying the critical role fiscal policy plays in a struggling economy.
She believes her only job is to tighten public purse strings in favour of loose monetary policy. Her assertion is that lower interest costs will allow households and businesses to divert those "cost savings" to other parts of the economy.
Honestly, what is wrong with you people? Society will always have a spread of the fortunate and unfortunate - we *depend* on that spread economically. We *need* tens of thousands of people to be so desperate for work that they will do the crappy, precarious, unsocial and tedious jobs - jobs that we rely on for everything from aged care to cheap prices at big box retailers. Our economic model relies on high unemployment, and creates high household stress, depressed regions, kids growing up with trauma, violence. The whole thing is *by design*.
So, forgive me for losing it when people say 'people have to learn the hard way'. What are you even talking about? Are you suggesting that people who face crazy odds should all just somehow apply themselves and beat those odds? Like every horse in the race should just, you know, 'win'?
What happened when young people and people with disabilities started to score a few points in 2022 - starting to find work and earn a bit of cash? RBNZ whipped the ladder away and hiked interest rates to the moon because workers were starting to get a bargaining power.
So, the whole point, is that our economic model is screwed and it will only ever work for people born lucky plus a few people that beat the odds. We should do something about the model - not blame the people who get screwed over by it.
There is no alternative is what people say when they benefit from the status quo.
What kind of society leaves more than 12% of the people that want work or more work underutilised on purpose to 'control' the price of labour? The only reason we don't have riots is because people are not told the truth.
What kind of society leaves...
One that has made a business model out of selling permanent residence to those without it so their business can have low-cost labour. Hence, I say stop the sale of PR and if that results in some wage inflation then so be it - let's call it the cost of providing training and experience to those without any.
What happened when young people and people with disabilities started to score a few points in 2022 - starting to find work and earn a bit of cash?
This: Accredited Employer Work Visa | Immigration New Zealand
Immigration, making life harder for those at the bottom since the last century. Higher interest rates didn't whip the rest home, bus driving and retail jobs away from those you speak of.
Refusal to pay for the jobs did: Evidence, witnesses, recordings: Why didn’t INZ act on alleged exploitation? | Stuff "Seemar told investigators how Shaik had asked him for $20,000 for a job, and promised he would get permanent residency and a good wage." "He told me to get a cash job if I wanted to earn more." "When Covid lockdowns began, Seemar says he was given the wage subsidy, but told to return it in full to Shaik." "Seemar says he finally snapped when the company sponsored visas for more staff from India but still wouldn’t give him work.
I guess it depends on how you define 'the economy' and whether or not you think all existing parts of the economy are 'good'. If exports are cratering, then let's talk. However, if it's cafes and retail stores selling throw away products then maybe it's not something to panic about. Let's 'right size' our population for what we produce by cutting immigration.
Well at least we are international news, see below for the state of our navy; and our non-naval resources and skills and crew are atrophied also.
https://gcaptain.com/hmnzs-manawanui-sinking-hard-grounding-fire-and-af…
Good article.
It's not unlikely that the 4 foreigners on board were Australian naval personnel. They've been plugging holes in our navy since the pandemic. I'm grateful nobody was hurt, but I don't see this being the last visit from The F#ck Up Fairy.
For a country with the 9th largest territorial waters in the world we're not doing too well at sea.
The economy is ‘cratering’ says head of Devon Funds, and OCR should be cut 150 BPs by Xmas:
https://www.rnz.co.nz/news/business/530062/economy-is-cratering-call-fo…
Why does the media act like US hurricanes are some sort of anomaly? They occur every year. Some years they cause a lot of damage, yet none have been as destructive as Katrina back in 2005.
2024 Hurricane season predictions
Each year, the NOAA publishes its predictions for that year’s hurricane season. This year, it is predicting an 85 percent chance of “above normal” hurricane activity. Here’s what that actually looks like:
- 17 to 25 named storms, with winds of 39 mph or higher.
- Of those named storms, 8 to 13 are expected to become hurricanes with winds of 74 mph or higher.
- 4 to 7 major hurricanes, which are category 3, 4 or 5 on the Saffir-Simpson Hurricane Wind Scale. Winds can be 111 mph or higher.
https://www.bankrate.com/insurance/homeowners-insurance/when-is-hurrica…
Great breakdown of a bunch of current international affairs on the Prof G cast
https://youtu.be/2qxxZBKsl28?si=a4zE3OWlkaTRRPSY
The breakdown of England's current problems eeriely mimics where NZ is also coming up short, or where we're heading to.
a great listen
regarding UK
- need to decentralize more
- too much innovation in London due to poor travel networks close by
- great education system
regarding US
- diverged from European growth is amazing
- education is horrible
- healthcare inequality, yet wealth beyond belief
- election in US is not about real issues, its about the naritive
"give people in poverty cash" A lovely idealistic idea, give the poor people cash so that they can be less poor, feed themselves etc, who could argue against this virtuous gesture ? Well, I will. Poor people are not good money managers, either because they never had money in the first place, or because they have squandered it. I would advocate to teach poor people to manage money, no matter how little they start off with, rather than give them cash to squander due to lack of skill or knowledge.
It's a bit like saying: "give Yvil some fresh produce so he can cook" It's a stupid idea because Yvil is a poor cook, the only thing that would improve his cooking would be teaching him to cook.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2333898
There's a meta study analysing 201 papers on financial education for poverty reduction - It does nothing. This neolib idea that poverty is a character flaw still won't die though.
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