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
No changes to report today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here either. All updated rates less than 1 year are here, for 1-5 years, they are here.
FEWER JOBS ADVERTISED
Job ads on SEEK fell for the third consecutive month in October. They say the labour market remains ‘challenging’ as job ad volumes continue to decline,
FOODSTUFFS ARE APPEALING THE COMCOM REJECTION
Chris Quinn, Foodstuffs CEO said the boards of both its North Island and South Island cooperatives have decided to appeal the ComCom rejection of their proposed merger.
FACTS = 0, FEELINGS 'WHATEVER'
A Research NZ survey carried out for the RBNZ shows that households think inflation is currently running at 6.0% ! the same as in June and September. So perceptions aren't being shaken. And when asked about their estimates one, two and five year ahead, these were also little changed, although the one-year-ahead household 'guess' slipped from 3.5% in September to 3.0% currently. They supplied no accounting for the mental gymnastics of how or why they would fall from 6% now to 3% in one year. People are amazingly bad with numbers, and amazingly unaware of the data around them. I suppose that is what you get in the fact-free world some live in. Anyway, here is a less jaundiced view of these survey results, that assumes crowds have wisdom.
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Turners Automotive, Meridian Energy, Auckland Airport, and Investore Property show gains, while Kathmandu, Serko, Tower, and Freightways record the biggest declines
EYES ON DAIRY PRICES
There is another GDT dairy auction event tonight. Recent Pulse and full diary auctions have delivered rising prices. And the futures market pricing suggests that further increases are anticipated in tomorrow's event. SMP could be up +2.5% from the prior Pulse event a week ago, up almost +5% from the last full auction. WMP could be up +1% from the prior Pulse event, up +3.5% from the last full auction. Rises like this would take SMP up +14% from a year ago, or WMP up almost +27%. An increased flow like this will give upside to the farm gate payout forecasts. And underpin a recovery for the whole economy.
CASH SURGE IN
September data released today by the US Treasury shows a huge inflow of foreign funds into the US. There was +US$341 bln of private net flows in the month, plus another +US$57 bln by "official" (government) transactions. This is easily the largest single monthly inflow ever. (For reference, the US Federal Government deficit averaged -US$153 bln monthly in the year to September.)
SWAP RATES SOFTISH
Wholesale swap rates are probably a tad lower today. Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 4.42%. The Australian 10 year bond yield is down -4 bps from this time yesterday at 4.62%. The China 10 year bond rate is down -1 bp to just on 2.09%. The NZ Government 10 year bond rate is down -4 bps at 4.76% while the earlier RBNZ fix was at 4.72% and down -3 bps from yesterday. The UST 10yr yield is now at 4.41% and down -3 bps. Their 2yr is down -2 bps to 4.28%, so that curve is still positive by about +13 bps.
EQUITIES MOSTLY FIRMER
The NZX50 is up +0.4% in late Tuesday trade. The ASX200 is up a strong +1.1% in afternoon trade today. Tokyo has opened with a +0.4% firming. And Hong Kong is up the same +0.4% at its open but Shanghai is down -0.1%. Singapore is up +0.5%. Wall Street closed its Monday session with a +0.4% gain.
OIL RISES
The oil price is up +US$2 from this time yesterday, now at US$69/bbl in the US, and at just over US$73/bbl for the international Brent price.
CARBON PRICE ON HOLD
The carbon price is on holiday today because there doesn't appear to be any trades, holding at $63.80/NZU. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD UP AGAIN
In early Asian trade, gold is up +US$30 from this time yesterday, now at US$2616/oz.
NZD FIRMS MARGINALLY
The Kiwi dollar is up +20 bps from yesterday, now at 58.9 USc. Against the Aussie we are down -10 bps at 90.5 AUc. And against the euro we are unchanged at 55.6 euro cents. This all means the TWI-5 is still at 68.5.
BITCOIN LITTLE-CHANGED AGAIN
The bitcoin price has risen +0.2% from this time yesterday, now at US$91,007. Volatility of the past 24 hours has been modest also at just under +/- 1.8%.
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45 Comments
A bit harsh on the inflation survey, I feel. After all, many things are running at 6% or more - rates, insurances. Some people might also consider the higher mortgage repayments they have been lumbered with this year as significant ‘inflation’ (at least in terms of household outgoings)
Who gives a rat's arse what the official statistics say - it's all about the "vibe" of whether you feel you are doing better/worse.
As long as rates, insurance, telephone bills, medical bills etc keep climbing and the average pleb feels worse off than they used to, that's all that matters.
I talk to my friends/family/colleagues and most everybody is feeling the pinch. As Metallica said, 'Nothing Else Matters'.
harsh indeed,
"They supplied no accounting for the mental gymnastics of how or why they would fall from 6% now to 3% in one year. People are amazingly bad with numbers, and amazingly unaware of the data around them."
inflation actually went from 6 to 3.3 between June 23 and June 24, not far off what people are guessing, even if they do not realise that we already there
A big issue is people hear the RBNZ's 'CPI' which is quoted ad nauseum by government and media (and neither really understand it).
But what really matters - because this is what people actually see - is the HLPI.
Should one look - even for a moment - at the HLPI, it is impossible to conclude that the RBNZ is in anyway 'independent'.
Or put more bluntly ... it appears that they exist for the benefit of offshore banks and their major shareholders. We're only consequently because we can be fleeced.
Non tradeable (aka "domestic") inflation is what people actually feel on an everyday basis. Not the stuff that goes into the CPI like iphones with new cameras, or the price of overseas hotels. And non-tradeable inflation is still running hot at 4.9% so the "crowd" are not far off the mark. Certainly closer to reality than the "official" (and rather meaningless) statistic of 2.7%.
Agreed.
It partly depends on peoples memories coupled with their conclusions which can be objective ones. Which if their memories are good and their intelligence sufficient, that's OK.
But could also be subjective: influenced by what is heard/ read. Not so good. Because the media has an unwarranted influence above and beyond what it should have. Influence because each individual news item never provides a broad/ logical assessment of all the relevant facts. There seems to be a narrative which needs to be pushed.
Do economists understand inflation outside of their textbooks and theory? They tell the plebs and media how it's meant to work.
CPI inflation bad, asset inflation good. One influences the other. Supply and demand is a crock of shit when you see how it works in reality.
"People are amazingly bad with numbers, and amazingly unaware of the data around them. I suppose that is what you get in the fact-free world some live in"
I suspect that the disconnect is not the general public, who look at their outgoings on a weekly basis, but rather the statisticians who constantly produce the lie of averages, not to mention the 'weighted' CPI numbers.
Fact free?...maybe, but who is making the judgement?
There are many who are demanding that we don't have a say. Don't want us to express our views. Not with violence yet, but say the wrong thing in the wrong place, like the civil service, there are people employed there to ruin your life.
But I am going to express my view in the select committee. Viva democracy.
Probably the biggest protest in generations, but yeah, nobody showed up.
You think the NZ public would be equipped to navigate the nuances of the differences between interpretations of the treaty, decades of precedence and interpretations given by legal experts and Maori cultural experts, historians etc, to be able to make an informed choice?
Or do you think a referendum would just divide people by race and white people would win anyway, because they are the current majority?
Haven't read either side of the Treaty or the Bill. That said I take it it's accepted the Maori side (a language that never had the written word) and Pommy side don't quite say the same thing.
So some sort of chat to work out what's the right unified path seems worthwhile. Otherwise recently arrived Saffa and Indian fleeing racial oppression in their home country will pack their bags and head west to join the growing number of kiwi kids in Straya.
Take that forward, if there are no workers left paying tax for settlements, will it really matter what it said?
Since there was no written language, the Treaty was orally explained to the chiefs. One big point of contention is whether Maori knew they were ceding sovereignty.
The following link was posted by another commentator on the previous article provides written notes/minutes of the various chief's views on the Treaty from within the Waitangi tent. Some were against the Treaty as they felt like they lost authority, others were for the treaty and welcomed the Governor to be their "father", "judge", "peacemaker".
These written accounts were deemed credible enough for Maori to use as evidence to win a lands case against the crown in 2014.
https://www.bassettbrashandhide.com/post/dr-lawrie-knight-fact-checking…
For those that have never heard of the Theory of Reflexivity - try googling it.
"Reflexivity is a theory that positive feedback loops between expectations and economic fundamentals can cause price trends that substantially and persistently deviate from equilibrium prices. "
For the TLDR crowd - people think stuff into being
To be fair, most people equate inflation with their living costs, which include debt-servicing costs. This is measured best in the Household Living Costs Price Index, which was 4% in Q3. However, if you live in Hastings, Taupo, Napier, Dunedin, Timaru and you're dealing with rent rises of 6% to 12% per year (Taupo on 12%), rocketing insurance bills, double-digit rate hikes, and flat wages, I think you can be forgiven for thinking inflation is 6%.
Also worth remembering that folks got used to real wage growth between 2013 and 2021 - not any more.
Oh dear. Do you need me to explain how price baskets work? A weighting is attached to individual items in the basket based on averages. So, interest payments, on average, make up just over 6% of household expenditure. Insurance and Local Govt Rates are about 4% each. Household rent is 25.8%. Cigarettes and tobacco are about 3%. Does everyone pay rent? Does everyone have a mortgage? Does everyone smoke? No, of course not.
So, when you ask a representative sample of people what they think inflation is, well over a third are going to have debt-servicing costs. Another third (some overlap) will have rents to pay. Some will be smokers on pensions in flood-prone houses facing unaffordable insurance increases. Hell, they might even live in towns where rates have gone up by more than 10%.
The point here is that all of these costs are in the mix - so you would expect a representative sample of people to reflect them in their perception of inflation.
Yep
And let’s not forget that while Unemployment isn’t high, we have:
- some low income workers getting fewer hours of work
- some workers on reduced hours (9 day fortnights)
- some workers getting much lower bonuses or no bonuses (when I was working for a consultancy many years ago getting a 10 or 15k bonus meant a lot)
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