What happened Wednesday

Economy / news

A review of things you need to know before you sign off on Wednesday; dairy prices dip, lighter hospo regulation coming, new option for rich immigrants, copper price hits record high, swaps stable, NZX dips, NZD soft, & more

9th Sep 26, 3:59pm by David Chaston

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 RATE CHANGES
TSB said its floating mortgage rate will rise +25 bps to mirror the OCR. All current mortgage rates are here. And note, you can compare mortgage offers with our unique calculator that takes into account other costs and cashback incentives, here.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here today either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

SLIGHTLY SOFTER PRICES
The overnight Pulse dairy auction brought slightly softer prices except for WMP which was little-changed. The dips in the other commodities were cushioned by the lower NZD.

LOWER STANDARDS ON THE WAY
The Ministry for Regulation has issued a report that claims to have identified a number of areas that need to be 'simplified'. Among them are pullbacks on food safety because that are "not always effective, efficient, or proportionate to risk". Among the food recommendations (page 52) are to require less record-keeping, make the time between assessment reviews longer (like two+ years), and remove the requirement for regular licensing.

ANOTHER OPTION
The Government has opened a build to rent option for wealthy investor immigrants who will be able to meet their visa investment obligations by investing in approved managed funds for build-to-rent developments. More build-to-rent options will add renting capacity, but usually at high rents to enable the yield math to work.

NZX50 MARGINALLY LOWER
As at 3pm, the overall NZX50 index is down -0.1% today. It is up +0.3% for the past 5 trading sessions. It is up +5.7% from six months ago. From a year ago it is now up +4.3%. Market heavyweight F&P Healthcare is up +0.2% so far today. Kathmandu, Napier Port, Stride Property and SkyTV gain, while Gentrack, SkyCity casino, Serko and Scales retreat.

A SHARP DROP IN PORK PRICES KEEPS A LID ON CHINESE INFLATION
China's August CPI inflation rate came in very low again at +0.8% from a year ago, although a bit higher than for July, and marginally higher than expected. Food prices actually fell -0.6% on the same year-on-year basis, but within that beef prices were up +5.3% and lamb prices up +6.3%. Dairy products were -1.4% lower however, along with prices for port, alcohol, and vegetables. Medical services, communications services, and fuel were all up like elsewhere.

NOT INSULATED
Meanwhile, China's August producer prices rose faster, up +3.8% from a year ago - so the July easing was essentially reversed. Industrial prices were up +5.8% with some metals and fuel components up more than +20% from a year ago. So key components of their export-oriented industries are under the cost pump.

A FIVE YEAR HIGH
The Japanese business sentiment index for manufacturers known as the Reuters Tankan index rose to its highest reading since December 2021, and before that, 2018, in a show of rising confidence. This survey predates the official Tankan survey which isn't due until October 1, 2026.

A VERY PRECIOUS SEMI-PRECIOUS METAL
Overnight the copper price pushed up to a new all-time record, just shy of US$15,000/tonne (NZ$25.50/kg). It has dipped marginally in the hours that have followed, but that is nothing more than its regular volatility. The trend is still strongly up. (But chartists might sense that it will top out at US$15,500/tonne before establishing a new trend.) Homeowners with copper spouting might be nervous.

THE POINTLESSNESS OF STARTING A TARIFF WAR
Trump has taken exception to Canada reacting and retaliating to his tariffs on them. He says he will hit Canada with more and higher tariffs. Central to the new American actions will be dairy products.

FAREWELL
LIV Golf has filed for bankruptcy, owing millions to all and sundry, including the players who chased the outsized money on the circuit. (LIV Gold was also championed by Trump at his courses.) But backers Saudi Arabia decided it was going no-where, especially as crowds and viewers yawned, so they stopped shoveling money into it.

SWAPS IN FIRM HOLD
Wholesale swap rates will likely be marginally firmer today. Keep an eye on our chart below which will record the final positions closer to 5pm. The RBNZ 90 day rate was unchanged at 3.06% on Tuesday. Today, the Australian 10 year bond yield is down -2 bps at 5.20%. The China 10 year bond rate is also unchanged at 1.68%. The Japanese 10 year bond is down -1 bp at 2.88%. The NZ Government 10 year bond rate is now at 4.82% and up +2 bp from yesterday at this time. (The RBNZ 10 year rate is 'prior day' and was down -2 bps to 4.76% on Tuesday.) And the UST 10yr yield is now at 4.80%, and up +1 bp from this time yesterday.

EQUITIES MIXED AGAIN
The NZX50 is now down -0.1% from yesterday's close. The ASX200 has opened down -0.2%. Tokyo has opened up +0.3%. But the KOSPI has risen +1.5% at its open today. However Hong Kong has opened down -0.2% while Shanghai is up +0.2% at its open. Singapore is down -0.6% in early Wednesday trade today. Wall Street was lower at -0.6% on the S&P500 and the Nasdaq was down -0.3%..

OIL PRICES ALMOST AT US$100/bbl
American oil prices are higher from this time yesterday with the WTI benchmark up US$2 to just over US$94.50/bbl, while the international Brent price is up the same at just under US$99.50/bbl.

CARBON PRICE FALLS -10%
There have been many large trades reported so far today and the price is now -$5 lower at $45/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD DIPS
In early Asian trade, gold is down -US$47/oz from yesterday, now at US$4378/oz. Silver is holding at US$66.50/oz.

NZD SOFT
The Kiwi dollar is down -10 bps from this time yesterday, now at 58.6 USc. Against the Aussie we are down -30 bps at 81.1 AUc. Against the euro we also down -10 bps at 50.4 euro cents. This all means the TWI-5 is now just on 61.8 and down -10 bps from yesterday.

BITCOIN STABLE
The bitcoin price is now at US$78,607 and down -0.4% from yesterday at this time. Volatility has been low, at just on +/- 0.7%.

HOW THE GLOBAL ECONOMIC FORCES AFFECT US
If you want to catch up on what happened last night, try our Economy Watch podcast, here.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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48 Comments

by Phoenix (FKA JC) | 9th Sep 26, 4:19pm 1788927584

LIV Golf has filed for bankruptcy, owing millions to all and sundry, including the players who chased the outsized money on the circuit.

Bit of irony here. Alissa Heinerscheid was the director of marketing for Bud Light, when the dreadful brand campaign / repositioning destroyed brand sales and equity. Heinerscheid was touted as a wunderkind of brand management and marketing before she was dropped after the fiasco.

She later joined LIV Golf where her remit focused on the league’s team business, branded content, and then team operations/strategy. Another failure for Heinerscheid.

The Orange Swan would be horrified to know she was on the LIV team, but he was likely unaware. Also interesting that a "champion of woke" had no bones about going to work for a Trump-associated organization.

by IT GUY | 9th Sep 26, 7:02pm 1788937355

She should have relaunched - "Bud in the can", ironically she sort of did, just in a different tone. Tone is very important in marketing.

https://youtu.be/b994hRcizU4 banned bud ad.

by Palmtree08 | 9th Sep 26, 7:05pm 1788937517

"filed for bankruptcy". Perfect fit for team Orange.

by powerdownkiwi | 9th Sep 26, 4:18pm 1788927534

20 years ago, my oldest son asked what I'd advise him to store his income as?

I told him a shipping container full of physical copper, was as likely a bet and as tradeable a useful resource, as I could think of.

Too obvious.

by Ahuhyeah | 9th Sep 26, 4:34pm 1788928485

Better then even chance it would have been stolen in the 20 year period based on the ingenuity or the meth addicts metal thieves I have seen locally. Some of the theft is incredibly brazen. But then addiction will do that.

Would it have been insured?

by printer8 | 9th Sep 26, 4:51pm 1788929489

Yes. Copper spouting stolen from old Napier Hospital four (plus) storied building. Believed to have been at night by thieves who must have had no fear and steel balls.

by powerdownkiwi | 9th Sep 26, 4:52pm 1788929534

You jest, surely?

A physical hedge against the physical future, vs proxy?

by Let me be Frank | 9th Sep 26, 5:53pm 1788933201

You assume there will be a functioning market for said copper should your son need to trade it.

In the end there will be only one currency.....ability.

by powerdownkiwi | 9th Sep 26, 6:10pm 1788934226

No.

A demand for what pipes water - a physical demand.

Ability can't do much without stuff (mind you, he was brought up to be capable, that way). I see where you're going though - I suspect few would know a crox if they fell over one.

by Let me be Frank | 9th Sep 26, 6:37pm 1788935824

it will not be the resource per se that is valuable, it will be the ability to apply the (crucially) available resources...education??

How do we survive /thrive as a community given the resources available (now and into the future)?...that may include trade, if possible.

by powerdownkiwi | 9th Sep 26, 6:33pm 1788935587

More and more.

I teach such

by Yvil | 9th Sep 26, 6:46pm 1788936394

Because of your total inability to consider any other opinion than your own, you should not be a teacher.

by Let me be Frank | 9th Sep 26, 6:56pm 1788936986

PDK may be intransigent but I would suggest his basic theorem is correct....annoying as it may be.

by Zachary Smith | 9th Sep 26, 7:11pm 1788937897

Shares beat copper over the last 20 years.

by Let me be Frank | 9th Sep 26, 7:12pm 1788937953

lol...measured in what?

by Zachary Smith | 9th Sep 26, 8:36pm 1788942971

Value.

by Let me be Frank | 9th Sep 26, 9:00pm 1788944440

Value measured how?

by Zachary Smith | 9th Sep 26, 9:45pm 1788947154

It's pretty easy to understand. Not exact figures but, in dollars, 100k worth of copper in 2006 can now be sold for around 200k while 100k of S&P 500 shares in 2006 can now be sold for 800k if you reinvested the dividends.

by Let me be Frank | 9th Sep 26, 10:28pm 1788949727

Dollars....what is a dollar worth?...you cant eat them, I guess you can burn them or wipe your arse in a pinch...assuming theyre not digital.

Again, as stated previously you need a functioning market to trade your shares/copper

by Norm | 10th Sep 26, 12:50am 1788958229

You could buy copper with it.

by Zachary Smith | 10th Sep 26, 7:42am 1788982929

Exactly. A normal person would have purchased the 2006 copper hoard using dollars too.

by Norm | 10th Sep 26, 6:11am 1788977518

Yes but now you can buy 4 times more. My comments are more said in jest though...

by Zachary Smith | 10th Sep 26, 7:35am 1788982505

I often have a good chuckle when I read my comments too. The copper question is interesting to ponder. In a post apocalyptic world I reckon horses and steel will be the commodities to have. À la Planet of the Apes.

by Foxglove | 9th Sep 26, 7:27pm 1788938865

Young granddaughter now first year Law at Otago. Avid reader, encyclopediac memory for detail. No ambition to be a lawyer. Instead the degree chosen to develop, research, precedent, discovery, comprehension and expression of all thereof. Already that is leaning towards medical avenues. I interpret that by a line of questions I got starting with something like - what was being used before penicillin and petrochemicals. Suggests to me at least, that our world is soon going to need minds capable of exploring well beyond the status quo, and that included historical abilities that were either disregarded or left undeveloped.

by Palmtree08 | 9th Sep 26, 6:59pm 1788937195

"encyclopediac memory" I think we know where those genes came from Foxy. ;-)

by Foxglove | 9th Sep 26, 7:26pm 1788938777

Thank you, flattery will get you everywhere. Well she certainly is my front runner out of four which I have to be very careful to conceal. I am still ahead though. I can still out flank her on Catch - 22, but if she finds time to have another go at it, likely she will catch up.

by Foxglove | 9th Sep 26, 6:03pm 1788933839

And then! The clever coppers capably copped the copper culprits. Just joking!

by IT GUY | 9th Sep 26, 7:04pm 1788937446

collectors edition shot guns....

and ammo?

by JimboJones | 9th Sep 26, 6:20pm 1788934809

Yet cash has been tradable for the 20 years since.

by Zachary Smith | 9th Sep 26, 7:17pm 1788938277

Shares too, and they did better than copper as an investment. Copper sometimes drops in value; −25% in 2008, −50%+ from 2011–2016.

by Palmtree08 | 9th Sep 26, 6:57pm 1788937055

"Don't worry, if it's ever important, we can make copper out of other metals." Julian Simon

by Zachary Smith | 9th Sep 26, 7:15pm 1788938143

Copper is abundant. Known reserves exceed 5,000 million tons and we are finding more all the time.

by Let me be Frank | 9th Sep 26, 7:20pm 1788938404

"This graphic illustrates how copper production costs have evolved for major companies from 2019 to 2023. Costs has risen sharply for most major producers due to factors like inflation, declining ore grades, and rising input costs. Notably, fuel prices surged by 350%, and sulfuric acid costs increased by over 600% in top-producing nations like Chile (source)."

https://www.miningvisuals.com/post/rising-costs-of-mining-copper

Ya think?

by Zachary Smith | 9th Sep 26, 8:33pm 1788942834

It's an economic challenge rather than a geological one. Also, copper is very recyclable. Practically infinitely so. There really isn't a major problem to see here.

by profile | 9th Sep 26, 8:42pm 1788943339

No, you're wrong. According to the 1972 Limits to Growth, praise be, copper completely ran out in 2022.

"Copper, with a 36-year lifetime at the present usage

rate, would actually last only 21 years at the present rate of

growth, and 48 years if reserves are multiplied by five. It is

clear that the present exponentially growing usage rates greatly

diminish the length of time that wide-scale economic growth

can be based on these raw materials."

https://collections.dartmouth.edu/content/deliver/inline/meadows/pdf/me…

by profile | 9th Sep 26, 8:38pm 1788943099

Not to mention finding abundant reserves of fibre optic cables.

by Phoenix (FKA JC) | 9th Sep 26, 5:20pm 1788931208

One of Aussie's biggest private credit funds Metrics is struggling to find buyer for giant residential construction site in Sydney after the project developer defaulted on a $270m loan.

No, this is not Bathla. Australia YMCI, a developer owned primarily by the provincial government of Yunnan in China, bought the mega site from Goodman for $660 million in 2016. It had ambitions to build a 3000-apartment precinct, but completed only 421, which have been plagued by quality issues.

The contagion is spreading. And even KPMG has its dirty mitts involved.

https://archive.ph/xJjHO#selection-2083.0-2083.272

by IT GUY | 9th Sep 26, 7:07pm 1788937679

Metrics has blamed KPMG for the slow finalisation of the accounts, but people briefed on the matter who requested anonymity to speak freely said auditors had been dissatisfied with the information provided by the private credit firm late last month and refused to sign off on the figures.

Clearly, with recent events, KPMG hands could be seen by some as tainted, so instead of saying "these accounts are bullshit" they delayed signing them, perhaps Allen's where busy doing an internal review of the integrity of the data in the accounts.

"Do you like dawgs?"

by Phoenix (FKA JC) | 9th Sep 26, 8:06pm 1788941167

Their excuse was the relevant auditor passed away.

I'm not making that up.

by IT GUY | 9th Sep 26, 10:08pm 1788948509

Oh dear Proper F,.ked then

KPMG is the gift that keeps giving

by interesting1234 | 10th Sep 26, 8:48am 1788986932

Please share the insider reddit thread with burner accounts if one comes up. The Du Val one was priceless hearing the inside scoop of the real goings on.

by Palmtree08 | 9th Sep 26, 6:50pm 1788936656

"Homeowners with copper spouting might be nervous."

Better get a back up generator as power lines get stripped. A lock on the hot water cupboard might also be wise.

by IT GUY | 9th Sep 26, 7:09pm 1788937747

Top 10 Non-Perishable Survival Foods

White Rice: Lasts 25 to 30 years when stored in airtight containers or Mylar bags with oxygen absorbers. It provides an affordable and stable source of carbohydrates. [1, 2, 3]
Honey: Lasts indefinitely due to its natural antimicrobial properties and low moisture content. It serves as an instant energy source and sweetener. [1, 2]
Dried Beans and Lentils: Store for 25 to 30 years in proper airtight packaging. They deliver essential plant-based protein and dietary fiber. [1, 2, 3]
Salt: Lasts forever without spoiling. It is vital for electrolyte balance and food preservation. [1, 2]
White Sugar: Keeps indefinitely if kept dry and free from moisture. It provides high-calorie energy and aids in canning or preserving. [1, 2]
Rolled Oats: Last up to 30 years when sealed correctly away from moisture. They offer a hearty, fiber-rich breakfast carbohydrate. [1, 2]
Dried Pasta: Stores safely for 10 to 30 years in dry, dark environments. It is calorie-dense and easy to boil. [1]
Powdered Milk: Lasts up to 20 years or more if kept oxygen-free. It supplies crucial calcium and dairy nutrients when fresh milk is unavailable. [1, 2]
Canned Meats and Fish: Tuna, chicken, and canned meats like Spam last past their printed best-by dates (often safe indefinitely if the can is undamaged), providing immediate ready-to-eat protein. [1, 2, 3]
Distilled Vinegar: Maintains high acidity and a stable shelf life indefinitely. It works well for pickling, cleaning, and flavoring. [1, 2]

by IT GUY | 9th Sep 26, 7:10pm 1788937805

I would add brewers yeast and freeze high alpha hops

by JimboJones | 9th Sep 26, 7:58pm 1788940686

If you're the only person in the country with booze, reckon you'll get to drink it?

by interesting1234 | 10th Sep 26, 8:52am 1788987148

Share it of course, when you have the skill to make more.

by interesting1234 | 10th Sep 26, 8:52am 1788987124

You can nigh on infinitely recycle yeast each batch I suppose, and maybe a few rhizomes of Nectaron, Nelson Sauvin, Motueka and Riwaka would be a saviour long term.

by AN Other | 10th Sep 26, 8:54am 1788987277

You might want to store small quantities in individual bags rather than everything in a couple of giant bags that get contaminated with air/moisture 1 year into the 30 year life.