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
TSB has cut its one year fixed rate to 5.69%, well below the main banks. More here. It also appears man=in bank apps are no longer offering large discounts for in-app rollovers. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
TSB also trimmed all its TD rates for terms longer than 1 year (except their 18 month rate). Unity Money have trimmed some key TD rates as well. All updated rates less than 1 year are here, for 1-5 years, they are here.
TAMER, BUT STILL WAY FASTER THAN CPI INFLATION
Household living cost increases slow - but are still higher than official inflation rate. Stats NZ says its household living-cost price indexes show household costs - including interest payments - rose +3.8% in the year to September.
WELL-PLACED TO COPE
The latest RBNZ financial stability report notes banks expect mortgage defaults to rise even as economy recovers. They say strong profitability has helped banks remain resilient during the recession and means they are well-positioned to cope with rising unemployment.
RISK PRICING HERE TO STAY, & INFLUENCE DECISIONS
The same RBNZ financial stability report says risk-based insurance pricing is a continuing trend and high-risk properties will likely see further, faster increases.
CLIMBING MORE, BUT SLOWLY
The ANZ World Commodity Price Index increased +1.4% in October from September as stronger prices were recorded for all major sectors excluding meat and fibre. Year-on-year they are up +12.8%. In New Zealand dollar terms, the index lifted 3.4% from the prior month to be up more than +10%, as the NZD Trade Weighted Index fell by -1.3%.
NZX EQUITY MARKET UPDATES
Check out our quick update of how the NZX is faring today, as at 3pm. AirNZ, Precinct and Hallensteins all rose, balanced out however by falls by a2Milk, Oceania, NZX & Freightways. In addition, we have updated the profiles with the year-end results for Oceania Healthcare (OCA, #39), Investor Property (IPL, #41), and Fonterra (FSF, #40).
BIGGER = BETTER = SAFER ???
We reported the October passenger car sales last Friday, but we should have noted that the share that were SUV's rose to a record high 83.9%, andily higher than the previous high in January. Now only 16% of new car sales are traditional sedans.
IS CASHING UP WISE?
Corporate advisers Northington Partners say Fonterra shareholders could reap as much as $2 per share in cash from a successful asset sell-off. That would be a $3 bln bonanza from the sale of household-name retail brands.
LIMPING ALONG
ANZ said its card activity data shows overall card spending was down -1.2% in October from a year ago, but this annual fall has now stabilised. The types of spending most sensitive to interest rates (housing, durables, discretionary spending) are still experiencing the largest falls. Tourism is also well down versus a year ago, likely reflecting more cautious domestic tourism and business travel, they say.
GAMING FUTURE RATES STILL POPULAR
New data out today from the RBNZ (C71) shows that the enthusiasm of owner-occupiers for fixed rate contracts of 6 months was still high in September at 33% of all new loans, but sharply down from the record 38% in August. One year terms are slipping to 28%, 18 month terms are golding at 14%, two year terms are irrelevant now at just 4%. But the floating rate option is now up to a 20% share, its highest in almost 18 months. More here.
CHINA'S SERVICES SECTOR EXPANDS
The Caixin services PMI for China in October largely mirrored the official version, but recording a better expansion than the official version, in a better-than-expected result.
EYES ON THE RBA
The Reserve Bank of Australia will review its cash rate target and related monetary policy settings at 4:30 mp NZT today. No change to the 4.35% policy rate is expected, but more clarity on how they their options related to persistent inflation pressures will be important. We will update this item after the release.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed again. Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 4.47%. The Australian 10 year bond yield is up +2 bps from this time yesterday at 4.63%. The China 10 year bond rate is little-changed at 2.13%. The NZ Government 10 year bond rate is up +10 bps from this time yesterday, now at 4.63% while the earlier RBNZ fix was at 4.57% and unchanged from yesterday. The UST 10yr yield is now at 4.31% and down -1 bp from yesterday. Their 2yr is down -4 bps at 4.17%, so that curve is now less positive, by +13 bps.
EQUITIES MIXED
The NZX50 is up +0.3% in late Tuesday trade. The ASX200 is down -0.5% in afternoon trade today. Tokyo has opened with a +1.3% partial recovery. Hong Kong is up +0.2% at its open. Shanghai is up +0.6%. Singapore is down -0.1%. Wall Street was down -0.3% on the S&P500 in Monday trade, relatively calm ahead of the US Presidential Election.
OIL FIRMER AGAIN
The oil price is up +US$1 from this morning, just on US$71.50/bbl in the US, and just on US$75/bbl for the international Brent price.
CARBON PRICE FIRM
The carbon price up +50c today, now at $63.50/NZU in light trade. But that is the highest level in almost 8 months, since mid-March. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD EASES SLLIGHTLY
In early Asian trade, gold is down -US$5 from yesterday at this time, now at US$2734/oz.
NZD SOFTISH
The Kiwi dollar is down -20 bps from this time yesterday, now at 59.8 USc. Against the Aussie we are down -10 bps at 90.7 AUc. And against the euro we are also down -10 bps at 55 euro cents. This all means the TWI-5 is down a bit more than -10 bps at just under 68.7.
BITCOIN drops
The bitcoin price has fallen -US$1000 from this time yesterday, down +1.5%, now at US$67,931. Volatility of the past 24 hours has been moderate at just under +/- 2.0%.
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57 Comments
Job losses at KPMG (4% of US audit staff) and Samsung, which is cutting 30% of foundry staff, planning 50% chip line closure by end of 2024.
Ominous.
https://www.wsj.com/articles/kpmg-to-lay-off-4-of-u-s-audit-workforce-t…
https://www.trendforce.com/news/2024/11/01/news-samsung-reportedly-to-s…
They laid off audit staff prior to the 2016 US election too. As they did before the GFC. Could it be 'signaling'?
Let's not forget that the GOP (the political party Trump captured) want's lower taxes for mega rich people. Ergo - less 'auditing' work for KPMG et al. And the sooner GFC 2.0 comes along.
And into a tree. More energy but if it has crumple zones which do their part, no worse than two sedans. But a more common scenario is a glancing blow. Where the high centre of gravity problem comes into play again where it spears off out of control into the scenery.
There is a similar thing with the windscreen pillars. The crash tests showed that a car with super thick pillars performs a bit better, but they don’t care about the fact that they reduce visibility and cause crashes in the first place. Try driving an older Japanese car and the visibility is spectacular.
My apologies.
You are such an expert on so many subjects that I expected you were abreast on the research that clearly shows our vehicle manufacturers are producing vehicles that rich customers love but are dangerous to everyone else, and are unneccessarly damaging to our environment while also increasing taxes on those that don't want heavy and costly vehicles.
Um? No wait. Some people see though you asinine b.s. Quelle surprise.
Save your feigned ignorance for FB. We're not all stupid here.
There are other factors about SUVs such as robustness and ability to handle off road terrain to various degrees. That factor comes into play in such conditions of cyclones, earthquakes & similar challenges that NZ is not short on dealing out. For example during the Canterbury EQs we were able to borrow a medium SUV from family without which we could not access our house. But we were then able to return, secure our property and commence the clean up. So after that the old saloon was gone, replaced by an Escape.
And they are so f'cking heavy they take ages to slow down !!! (to say nothing about how much extra fuel they use - because they are so god damned heavy !!!)
The RBNZ was talking about 'risk based pricing' today. Shame their remit doesn't extend to 'on-the-road' idiocy, ay?
"SUV" is a widely abused acronym and is almost irrelevant nowadays. The Suzuki Ignis is sold as a SUV in NZ despite weighing 940kg (and even lighter in FWD configuration) and being shorter and narrower than a Toyota Yaris.
The term has become a victim of marketing onanism, because "everyone wants a SUV" so why not lift a Yaris by 6-9cm, slap some black plastic on the wheel arches and call it such? Stooges will pay 15%+ more for that kind of pointless fluff!
There is definitely an advantage to having a higher point of ingress and egress to a vehicle, especially for less mobile people, but the majority of the package is overpriced cosmetics tacked onto a run-of-the-mill hatchback.
The size of the ego?
SUV is a great marketing tool and appeals to "keeping up with the Jones'", much like the Ranger. The majority of off road use would be the front lawn.
My parents have a Kia Sportage and it's really just an oversized hatchback. Visibility from a driver perspective is horrible. 'A' pillar reduces view, wing mirrors practically aesthetic only and rear window view useless. Bells and whistles are more a distraction, and overall increases driver complacency.
I've driven numerous vehicles, old school, middle of the road, and newer. I've completed basic driving courses, some on track. Ride a motorcycle and you learn some extra driving skills and awareness.
General Comment : "SUV is a widely abused acronym and is almost irrelevant nowadays."
Um. No. It means a bigger and heavier vehicle that also means the selfish occupants are 'safer' - but everyone else is in more danger!
Prove me wrong. I can wait.
Thanks for waiting but I don't know why a polymath such as yourself requires clarification. I was meaning the term is abused by marketing and industry. I thought that was clear. Did you stop after that first sentence?
I can't be bothered linking but go to Toyota's site and select new cars, then SUVs. See what is classed as an SUV, and will thus be reported as a sale of an SUV.
I've already mentioned the Suzuki Ignis, which Suzuki themselves sell as a SUV. Now try any number of other manufacturers and see what they're selling as SUVs.
And so on. I never disputed the physics of accidents involving greater masses, just pointed out the term has lost its original meaning. Grab a drink of your choosing, kick off your shoes, and have an enjoyable evening.
The SUV term is "almost irrelevant nowadays"? Really.
So you are ignoring the research that because SUVs - of any kind - are so much taller than other vehicles that a) their higher center of gravity makes them less safe, while b) the fact that they're far higher than they need to be obstructs the visibility of other road users, or c) that the higher vehicle can't be as aerodymanic so uses more fuel?
Thanks for the snarky reply. I expect you enjoyed writing it?
But you've just dug your hole deeper.
No I didn't really enjoy writing it, because I can't understand how you missed the thrust of my original post. You've come in hot on this thread tonight, which causes me conflict because you make a lot of excellent comments on many articles but then belittle others who may disagree, or in my case you come out of left field to argue a point I did not make.
You're coming at this from the physics angle, and again I'll say I was not referring to that in my original post. I was referring to how the term SUV had been widened by marketeers and manufacturers to the point it puts a Landcruiser (large 4WD body on frame offroader) in the same category as a Yaris Cross (small unibody hatchback on short stilts). Both count as SUVs in the sales stats yet I'd much rather live in a world full of Yaris Crosses. To be honest I'd rather live in a world full of regular Yarises because the extra height of the Cross affects dynamics, as I'm sure you would agree. Physics!
For the record I would happily see large SUVs and utes banished from the ownership of those who cannot prove they need the excess size and weight. It would make piloting my tiny lightweight roadster much safer and far more enjoyable.
Good post.
And my apologies for coming down hard. Your original comment came across as dismissing SUVs as 'no real problem at all' thanks to a 'mischaracterization' by marketing departments. Other comments concluded likewise. It is great that you also see them as scourge.
You can recognise them by the F*** Y** stencils now and again.
https://www.theguardian.com/environment/2024/nov/04/edinburgh-activists…
...as expected above
Reserve Bank keeps interest rates at 4.35pc for eighth-straight meeting despite lower inflation
https://www.abc.net.au/news/2024-11-05/reserve-bank-rba-rates-on-hold-n…
The lucky country has been riding its luck without a care in the world. Michael Pascoe (a Ponzi cheerleader many years ago who's gone completely about face) says:
The RBA didn’t expect the headline CPI to fall below 3 per cent before the end of the year. Wrong.
The RBA didn’t expect its favoured core inflation measure to hit 3.5 per cent until December. Wrong.
The facts, both the present numbers and the bank’s forecasting errors, mean the Governor’s rhetoric is now out of date.
The quote commonly attributed to John Maynard Keynes applies:
“When the facts change, I change my mind. What do you do, sir?”
https://michaelwest.com.au/falling-inflation-a-compelling-case-for-rba-…
Their most recent inflation figure, 2.8%, was artificially low due to the energy rebates. The next reading could actually rise. NZ in the same boat, petrol tax cut and exchange rate moves, we could also rise at the next CPI. With all the election promises in the US election, there will be continued stimulus there. Our dollar could stay sub 61 for quite a while, driving into inflation. The next 9 months will be interesting, could be choppy.
The Reserve Bank of Australia concedes it failed to predict the recent surge in government spending, as it released new analysis showing Australia has the second-highest underlying inflation rate of any major advanced economy.
Doesn't matter how many pointy heads or fancy pants degrees they have. They can still get it wrong.
https://www.afr.com/policy/economy/rba-we-got-it-wrong-on-government-sp…
"GAMING FUTURE RATES STILL POPULAR"
Gaming? Seriously?
Methinks kiwis might be finally understanding that the average kiwi is being right royally stiffed by the mega rich that control the fundamentals of our economy.
(I might be wrong. Maybe the mega rich are on the side of the overage kiwi?)
Is 'the crown' a single person or family?
Can 'the crown' sell stuff, or buy stuff, without scrutiny?
And can 'the crown' keep their dealings completely secret through tax havens and/or through multiple layers of off shore ownership and cross holding?
And when stuff is owned by 'the crown' ... doesn't that mean they hold it for all Kiwis? And in many cases, protect it for future generations?
To be honest, Grattaway, your comment is nonsensical. But because some plonker (you?) gave it a thumbs up, I thought someone should state the obvious.
Our "prime" minister has been reminded that NZ is not the USA and his "words" will get called out if they are wrong.
Prime Minister apologises after comment about Labour MP's public servant relative
This shows that some in parliament are still adhering to the institutions norma. Good on you Brownlee.
It's important Winston, Seymour and Luxon don't get away with their culture wars crap and are called to adhere to higher standards than the dirtbags they look to for inspiration.
Couldn't agree more. Well done Brownlee - without that kind of bravery, democracy is dead.
Which I think adequately describes our PM, intellectually. It amazes me that out of all the possible people (5 million here, 300 in the US) we get such mediocrities by VOTE.
Heck, we would do better selecting a blind pointer - we blindfold them, put them in an unannounced place at an unannounced time, they point, and we appoint those pointed-to as our leaders. Totally random. Couldn't be worse off than this Houseful.
The only ones there I'd rate, are Stanford and Swarbrick. And how did Simeon Brown not get picked up/stomped by all the supposed checks and balances?
I'm partial to the house being made up of a third each of:
- Constituency MPs (there is merit in local representation)
- List MPs (allows parties to choose highly competent candidates who may not have the charisma to be elected)
- Random selection, like Jury duty (keeps the others honest)
You would need to get the randomly selected on board with your policies. It would be really hard to get extreme stuff across the line and it would also make it hard for donor's interests to be put above sensible solutions.
From having worked on plenty of projects that require public engagements, smaller groups of people who represent diverse interests working together tend to come up with the best solutions. Most people find they have more in common with each other than 'political' and 'ideological' prejudices would imply.
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