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 today. But expect a flood of reactions to tomorrow's OCR rate cut, starting with floating rates. And other banks will probably take the opportunity to inch down some fixed rates, starting with matching BNZ's carded advantage for the 6 month rate. All to be revealed tomorrow. Update: ANZ has moved early. See the changes here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Kiwibank took -20 bps off its six month rate, taking it down to 5.25% to match its main rivals. Tomorrow expect all savings account rates to fall with the OCR. Update: ANZ also trimmed its term deposit rates. All updated rates less than 1 year are here, for 1-5 years, they are here.
RATES & HOUSE PRICES DISCONNECT?
The ASB housing confidence survey shows concerns about the economy are weighing on people's expectations for increases in house prices. Despite expectations of further interest rate cuts at a record high, people aren't so confident that is going to translate into rising house prices.
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. NZX50 drops -0.8% as Serko, Kathmandu, Warehouse Group, and Infratil decline; Gentrack soars +22% on full-year results.
BAD DEBT STRESS
Heartland said that its car loans and loans to asset finance sectors are struggling, with company liquidations hitting forestry and transport customers hard. They are having to build provisions for doubtful and bad debts faster now.
RBNZ DASHBOARD UPDATED
The RBNZ released its September 2024 Dashboard data update today. We will have more on what this shows later. Our Key Bank Metrics tool, which uses this data, is updated here.
NIM CIRCUS CONTINUES
The RBNZ Dashboard revealed what each bank reports to it is their net interest margin. The main banks also issue commentary (including testimony to the Parliamentary Banking Inquiry) where they discuss their NIMs. NIMs are an important metric on bank profitability. But what they say publicly, and what they tell the RBNZ can, for some banks, be quite different. Claiming a low NIM is a claim that "we aren't too profitable". These variances annoy us, especially those 'claimed' by ASB and Westpac.
| NIM reporting variances | Self | per RBNZ | ||||
| reported | Dashboard | |||||
| 30-Sep-24 | ||||||
| ANZ | Sep-24 | 2.57 | 2.4 | |||
| ASB | Jun-24 | 2.23 | 2.4 | |||
| BNZ | Sep-24 | 2.37 | 2.4 | |||
| Kiwibank | Jun-24 | 2.38 | 2.3 | |||
| Westpac | Sep-24 | 2.17 | 2.5 | |||
KIWISAVER ASSETS
Kiwisaver assets rose +21.6% at the end of September from a year ago, through the combination of growing contributions and 'good' returns. There is a clear shift by fund managers to build their offshore exposure. NZ-based fund assets now represent 'only' 41.3% or all funds invested, down from 43.7% this time last year. NZ-based funds grew only 14.8% in the year, while offshore-based funds rose +26.8%.
INVESTMENTS OUTGUN HOME LOANS
KiwiSaver assets aren't the only funds under management. In total they now exceed $300 bln ($307.1 bln) but the fastest growing portion is the KiwiSaver portion. The rest ($184.5 bln) grew by 'only' +11.6% in the past year. To put these volumes into perspective, total funds under management now represent 84% of all mortgages (for example), compared with 75.5% at this time last year.
VALE NIKKI KAYE
Ex- Auckland Central MP and National Party minister Nikki Kaye has died of breast cancer. She won the seat off Judith Tizard in 2008 to become the first National MP in Auckland Central, ending the left’s 90-year reign. She held the seat until her retirement from politics at the 2020 election. She was at one point the deputy leader of the party.
SWAP RATES DOWN AGAIN
Wholesale swap rates are probably lower again today at the short end, higher at the long end. Our chart below will record the final positions. Yesterday the 90 day bank bill rate was down another -6 bps to 4.32% and today it probably held at that lower level, ready for tomorrow's OCR decision. (Please note that the RBNZ is delaying the release of this data by one day, due to rights issues with the source, the NZFMA.) The Australian 10 year bond yield is -7 bps lower from this time yesterday to 4.47%. The China 10 year bond rate is down -2 bps at 2.06%. The NZ Government 10 year bond rate is down -6 bps at 4.59% while the yesterday's RBNZ fix was 4.50% and down -10 bps. The UST 10yr yield is now at 4.28% and down another -7 bps. Their 2yr is down at 4.27%, so that positive curve has returned but only to +1 bp.
EQUITIES MOSTLY LOWER
The NZX50 has dropped further (from the 3pm review above), now down -1.2% and weakening. The ASX200 is down -0.4% in afternoon trade. Tokyo is down -1.5% at their open. Hong Kong is little-changed at its open and Shanghai is up a minor +0.1%. Singapore is starting down -0.5%. Wall Street ended its Monday session up +0.3% on the S&P500.
OIL DROPS
The oil price is down -US$2 from this time yesterday, now at US$69/bbl in the US, and at just on US$73/bbl for the international Brent price.
CARBON PRICE FIRMS
The carbon price rose slightly today after yesterday's fall. It is trading back at US$63.50/NZU today. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD MUCH LOWER
In early Asian trade, gold is down -US$75 from this time yesterday, now at US$2625/oz.
NZD FALLS
The Kiwi dollar is back down -40 bps from this time yesterday, now at 58.2 USc. Against the Aussie we are up +30 bps at 90 AUc. And against the euro we are down -30 bps at 55.7 euro cents. This all means the TWI-5 is now at 67.8 and down -30 bps.
BITCOIN RETREATS
The bitcoin price has fallen -2.5% from this time yesterday, now at US$94,838. Volatility of the past 24 hours has been high at just over +/- 3.3%.
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27 Comments
The stock performance of Mitsubishi UFJ Financial Group (MUFG) has beaten Bank Of America over the past five years and 210% growth with a dividend of 3.29%.
Absolutely trounced CBA and ANZ. But Japanese banks are supposed to be basket cases and Aotearoa / Aussie banks the spring by which the eternal Ponzi thrives.
What am I missing?
I had a Kiwi flatmate in Sydney, who knew his horses enough to identify them training without colours/numbers, in a Randwick pre-dawn. Trouble was, he was a compulsive gambler.
I wondered if - without the compulsion - I could 'win' by using his knowledge. Turned out I couldn't. I stopped there and haven't been to a track in 45 years.
But I noticed something, watching. The bookies would off-load onto the Tote, just before a race. If you just sat and watched the Tote in the last minute (it paid to be in the queue just behind the runners) you could work out what to bet on, by watching the odds shorten. That, of course, relied on the bookies getting it right, no shenanigans, etc etc.
Still, I gave myself a kitty ($100 in 1979) and left the arena -$20. Another in the circle swore he was always ahead - until he got a monthly TAB account. Which was always in arrears.... Dispassion of thought is a goodly discipline to master.
Anything I bet on is immediately doomed. Except once in Hong Kong in the early 80s at the track in the New Territories my hosts at the club introduced me to a member of the board. Not named Jardine but nevertheless a descendant in a Saville Row Suit and of a perfect Oxford accent. We had a good conversation and I noted Lester Piggott was making a guest appearance. Yes I was told and he wouldn’t come all this way to be an also ran would he was the reply, and likely to avoid that, the first race would be worth paying attention to. So in the final straight the horses parted like Moses unto the the Red Sea and Piggott and horse shot through the gap to win by half a length. My HK$100 became HK$350. My Chinese hosts were amazed. You see they bet on something like number chosen from the first sign of the first daughter divided by the sum of the phase of the sun and the moon. Likely though thereon, they have still won more than me.
82% of Americans say it's a bad time to buy a house in late 2024 (University of Michigan Consumer Sentiment Survey).
This is the most pessimistic homebuyers have ever been about the housing market (peaked at 88% in mid-2024) since this data has been collected from 1978.
Sentiment readings are even worse than the early 1980s when mortgage rates were 18%. Back then, it was a peak of 79% who said bad time to buy.
Wait, there's more: This figure is up from 12% trough, which is an incredible 50% increase in those believing it is a good time to buy!
Green shoots appearing, spring has arrived, more sold under the hammer, FOOP has turned into FOMO, prices will double every 7 years...!!
Solar Zero is in Receivership. That’s pretty big news that send a strong signal about both the economy, electricity prices and solar prices.
BlackRock are the owners. Guessing they over-paid, growth had come off, and they probably have some expensive debt to refinance.
Capitalism doesn't work on renewable energy - not enough margin to support growth.
But fossil energy is leaving us, so capitalism is dead anyway.
And we need to get onto renewables - more accurately rebuildables - while we still can. In that sense, theirs was a brave attempt to go where we have to, fudging two incompatible concepts (growth and sustainability).
I am going solar in 2025, its a great time to secure cheap panels... I am doing it so I have power security.
I will put it in myself and switch my shed over to solar (where my main freezers live, and also spur off the pool pumps and spa pool).
We cook mainly on gas, and our water heating is already solar so you just have to run the glycol pump in summer for free hot water.
I am looking at 10-15 kw
Blackrock pulls pin on Solar Zero,and puts it into liquidation.
https://www.scoop.co.nz/stories/BU2411/S00373/solarzero-limited-in-liqu…
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