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
ASB and Westpac both cut key rates. Interestingly ASB also raised its 4 and 5 year fixed rates. More details here. Bank of China also cut all their rates. And Unity Money has essentially matched the main bank rate cards. Co-operative Bank cuts came in late in the day too. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
ASB, Westpac, and the Co-operative Bank also reduced their term deposit offers. Treasury cut it Kiwi Bond rates. Unity Money also cut rates. All updated rates less than 1 year are here, for 1-5 years, they are here.
DIDN'T SELL, WITHDRAWN
The housing market is messy and lacks direction. More than 3000 residential properties a month are being taken off the market.
PPS - GOOD FOR FIVE YEARS, THEN A REVISED RATE
Kiwibank's $275 mln perpetual preference share (PPS) issue will be paying 7.38% p.a. for the first five years. After that, the rate is revised but the margin stays unchanged. These PPS will will count as additional tier 1 capital. As the Final Terms Sheet notes "In a liquidation of Kiwibank it is highly unlikely that there will be surplus assets available for the liquidator to pay any amount to Holders in respect of the PPS."
ENTHUSIASTIC BIDDING FOR HIGHER YIELDS
Investors piled into today's three NZ Government bond issues with 104 bids overall worth $1.261 bln for the $500 mln available. There was a small $25 mlm Inflation Indexed bond offered today too and that got $115 mln in bids. Yields rose, by between +15 and +25 bps. Except the yield for the IIB rose +40 bps. Details here.
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. NZX50 lifts on Tourism Holds & Turners. SkyCity & Oceania dragged.
A FAST-GROWING COHORT
A government release revealed that more than 53,000 people currently live in retirement villages and the industry forecasts that close to 113,000 retirees will be wanting to live in this type of accommodation by 2048. (113,000 people currently live in Lower Hutt as a reference point.) More resident protections are on the way.
STEP ONE
Under pressure from the Government (to improve its returns), Pāmu Farms/Landcorp Farming has confirmed it will start opening pathways to farm ownership. The state-owned farmer is offering various contracts including herd-owning share milking, variable order sharemilking, and contract milking on four of its 44 dairy farms, as a start.
EXPORT SHRINKAGE
Exports from Japan shrank by -1.7% in September from the same month a year ago. It was another bij Japanese data miss because markets had forecast a +0.5% rise. Apart from the pandemic reversals, it was their biggests year-on-year fall since December 2019, and driven by fewer car exports (-9.7%) and machinery exports (-%).It was the first drop since November 2023, with sales of transport equipment declining 7.5%, weighed by motor vehicles (-9.2%) and cars (-9.7%). Also, semiconductor exports fell -10.1%.
WEAK EXPORT GROWTH
Meanwhile Singaporean exports rose +2.7% in September from a year ago, but this too was less than the +9.5% rise expected.
AUSSIE LABOUR MARKET EXPANDS
The Australian September labour market report saw jobs rise by +64,100 (their best since February) and far higher than the +25,000 expected. There was a very good rise in full-time jobs (+51,600) and also a +12,500 rise in part-time roles. Their jobless rate was steady at 4.1%. Along with their relatively high inflation (3.8%) this labour market strength may put the kibosh on a rate cut at the November 5 RBA rate review.
SWAP RATES FALL AGAIN
Wholesale swap rates are probably lower again today still influenced by the CPI result. Our chart below will record the final positions. The 90 day bank bill rate is dowen -3 bps at 4.59%. The Australian 10 year bond yield is up +5 bps at 4.29%. The China 10 year bond rate is down -4 bps at 2.10%. The NZ Government 10 year bond rate is up +1 bp from this time yesterday at 4.46%. And the earlier RBNZ fix was at at 4.38% and down -2 bps from yesterday. The UST 10yr yield is now at 4.03% and unchanged from yesterday. Their 2yr is also holding at 3.94%, so that curve is stays positive by +9 bps.
EQUITIES MOSTLY HIGHER
The NZX50 is now up +0.5% in late Thursday trade. The ASX200 is up +0.8% in afternoon trade. Tokyo is down -0.4% at its Thursday open. Hong Kong is up +1.9% at its open. Shanghai started +0.8% firmer at its open. Singapore is trading also up +0.7%. Wall Street ended its Wednesday session up +0.5% on the S&P500.
OIL ON HOLD
The oil price is unchanged from this time yesterday at just under US$71/bbl in the US, and just under US$75/bbl for the international Brent price.
CARBON PRICE FIRMISH
The carbon price rose marginally today to $63/NZU. But that is its highest level since March 2024. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD AT NEW ATH
In early Asian trade, gold is up +US$16 from this time yesterday, now at US$2682/oz and a new all-time high.
NZD LITTLE-CHANGED
The Kiwi dollar is up +10 bps from this time yesterday at 60.7 USc. Against the Aussie we are unchanged at 90.6 AUc. And against the euro we are up +20 bps at 55.9 euro cents. This all means the TWI-5 is up +10 bps from this time yesterday at 69.2.
BITCOIN'S RISES SLOW
The bitcoin price is up another +0.7% from this time yesterday, now at US$67,745. Volatility of the past 24 hours has been modest at just on +/- 1.2%.
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46 Comments
The difference six years makes
"The latest Crown financial statements have just been published so let’s look at the annual crown financial statements for 2023/24 compared to 2017/18."
"NZers are now paying $800 million a week more in tax than six years ago."
"Now defenders of the indefensible will cry “Covid” but that has minimal impact on income, expenditure or the surplus in 2023/24. "
https://www.kiwiblog.co.nz/2024/10/the_difference_six_years_makes.html
How about migrants who have moved to NZ in the last 6 years for low paying work and are high users of public services?
Why would MBIE collect and analyse data when it is likely it won't suit the woke narrative that migration is beneficial to a country, no matter the details within the policy?
For migrants, many bring their old parents and young children, get public-funded healthcare for the family and send kids to public school.
kknz wears blinkers - quite narrow ones - and thus has a scoping problem.
At this stage in human affairs, all things are going to 'cost more', all charges, rates and taxes will go up more than in the past. Competition during increasing scarcity, coupled with entropy (note Wellington's leaks); nothing more, nothing less.
Black played the last move, therefore black is responsible for the chessboard falling to the floor.
Not.
Prior to the 6th Labour Govt (now known as the "Indefensibles" ) I'd been a 90% Labour voter since Kirk - with similar criticisms.
I've also previously said that National needed to get booted out in 2017 because of their egotistical intransigence & corruption (eg "wadeable rivers) and blatantly compromised candidates (cf Goodfellow). I spent a couple of years prior to 2017 posting on these issues (in other forums).
In 2023 I voted for a colourblind democracy & will continue to do so. Every other issue is relatively minor.
Taking nominal values of tax take in a period of high inflation is only done to wind up their readers. The main thing to take away from the article is crown revenue as a share of the economy increased 2.5%. You could argue for or against that based on your personal ideology, but there is no perfect number.
In general, government surpluses and deficits are more due to movements in markets in NZ and worldwide that are not that much to do with the day to day government business. In general National gets voted in when times are bad (GFC, now) and Labour gets in when people feel more secure in their finances. Governments try to compensate for what is going on in the economy, but are always lagging behind.
The new government is borrowing more than all but the worst year of Covid under Labour, while still slashing thousands of public service jobs, and throwing away billions of dollars cancelling planned projects without alternatives (water/ferries/hospitals), just because. I noticed that wasn't mentioned in the article.
Good news is National has provided us with tax cuts, which equates to $3.7b per year. We did the math before on $4.7b of Super and that came to $90m per week. If my math is mathing, the tax cuts will bring us $70m per week in tax savings.
What are National going to do about the remaining $730m of extra tax we're all paying?
Yes, exactly. You can compare the fiscal, monetary and current account stimulus pretty easily, yet so few people do it. The graph at the link is equally weighted (and therefore crude) but it is pretty obvious that we are in a serious spot here.
Um. No.
With reference to your assertion that "our customers are over stocked" ...
Most of our high-value exports have short shelf lives.
Keep posting the folksie wisdom, Pa1nter. The dumber Kiwis are the better, right?
And no. I will not be engaging with you further.
Just drop comments and run away then.
Just with Wine, Indevin's (largest wine exporter in the country) vats are full. Over COVID, there was a shortage of supply, so many global distributors placed big orders, finally received them, and sell through is drying up. Wine can store for a while apparently. And you're committed to annual harvests, you can't just turn it off like a tap.
Similar thing has gone on with timber. Mills went into overtime, people stocked up, boom, house building and other construction shudders to a halt. Timber also takes a while to go off
The bullwhip effect isn't folksie wisdom. Your view of the world seems to want to ignore reality in favour of magical thinking.
‘Bond market volatility is spiking:
The ICE BofA MOVE Index hit 123.8 points last week, the highest level since January.
The MOVE index, also called the “VIX of bonds” is a metric measuring yield volatility of 2-year, 5-year, 10-year, and 30-year Treasuries.
The index has skyrocketed 38% in just 3 weeks as yields started rising following the Fed's decision to cut rates by 50 bps.
Over this period, the 10-year Treasury yield jumped from 3.64% to 4.10%.
At the same time, the popular bond-tracking ETF, $TLT, fell by 6.8%.
What happened to the "Fed pivot?"
https://x.com/kobeissiletter/status/1846609704455442840?s=46&t=MUwQeKa7…
‘US consumers have almost never been so pessimistic about the future:
Americans' expectations about their financial situation over the next 5 years dropped to the lowest level in 11 years.
Household expectations have fallen in a near straight line has inflation has persisted and unemployment has risen.
At the same time, their current financial situation compared with a year ago fell to near the lowest level since 2011.
Over the last 60 years, such depressed levels have only been seen in recessions.
Consumers believe we are in a recession.’
https://x.com/kobeissiletter/status/1846334792540799196?s=46&t=MUwQeKa7…
So, most kiwis, that actually contribute to NZ Inc., day in and day out ...
... Aren't much different to most people in most countries?
That's what you meant, right? ... Um. ... And no one can join the dots?
With respect, I_O, you continue to miss the big picture. (Hint: debt is but a symptom.)
Just adding data to the picture Chris - if that means I’m missing the bigger picture from your perspective, then that is your view and thank you for sharing your positive opinion of me with everyone.
What is the bigger picture? - please enlighten all the contributors of interest.co.Nz with your superior knowledge of all things big picture.
Currently watching the cricket so may not see your reply tonight but I’m sure everyone else here will greatly appreciate your sharing your extensive knowledge of the big picture.
Would never happen in Aotearoa.
Meta has fired about two dozen staff in Los Angeles for using their $25 meal credits to buy household items including acne pads, wine glasses and laundry detergent.
In one post on anonymous messaging platform Blind, seen by the Financial Times, one former Meta staffer wrote that they had used $US25 credits on items such as toothpaste and tea from the pharmacy Rite Aid, adding: “On days where I would not be eating at the office, like if my husband was cooking or if I was grabbing dinner with friends, I figured I ought not to waste the dinner credit.”
The person, who indicated they had a salary of about $US400,000 at Meta and worked “nights [and] weekends”, wrote they had admitted to the oversight when human resources investigated the practice, before later being unexpectedly fired. “It was almost surreal that this was happening,” the person wrote.
https://www.afr.com/technology/meta-sacks-staff-for-abusing-37-meal-cre….
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