Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
BNZ, ASB and TSB all raised fixed home loan rates today. More here.
TERM DEPOSIT RATE CHANGES
ASB also raised term deposit rates by between +5 bps (for 90 days) and +40 bps (for 3 and 4 years).
THE 90% FRAMEWORK
The Government released its new traffic light framework and it has been generally praised by the business community for the clarity if offers. Others aren't so sure. It is a plan for when a 90% vaccination target is reached (or what happens if they aren't). It offers more support for businesses and low-income earners in the interim.
BANKERS THINK IT WILL GET TOUGHER
An update to the RBNZ survey of banks shows that loan demand for mortgages was strong in September but nowhere near as strong as it was six months prior. The same survey shows bankers expect loan demand to wither in the next six months. (C60) The same survey shows bankers think credit availability has weakened and will also get much weaker in the next six months, for home loans. But these same bankers are much more upbeat about their corporate and agricultural market prospects. Interestingly, they see regulatory changes as highly negative, and perceptions of risk retreating. But they also see clients balance sheets improving noticeably.
RARE SHRINKAGE
Auckland's population fell to 1.716 mln in the year to June (even if it was only a tiny slip), and for the first time "ever", or since records began. The Super City joins the West Coast and Southland as New Zealand's only regions with declining populations. (The first New Zealand census was taken in 1851.)
PACKAGING UP PERSONAL LOANS
Harmoney's Australian business has just securitised AU$105 mln of their personal loan book there. Moody's as given 66% of it their top Aaa rating, and 85% of it an investment grade rating.
JAPAN IMPROVES
Japan got some inflation in September, a turnaround from the deflation it had in August. Its factories and services sector are both expanding in October, according to a widely-watched survey, and that is a good improvement too.
NEVER GRANDE
Evergrande is in even bigger trouble, and maybe even in its death throes. In statements filed at the Hong Kong Stock Exchange where it is listed, it said its effort to sell a key division to generate funds had failed, and it also said it may now not be able to meet its financial obligations. Investors left holding its shares are seeing their value tumble now that a trading halt has ended.
A TON-PLUS TODAY
There are 129 new community cases of COVID-19 to report today; 120 in Auckland and nine in Waikato. As at 10am, 64 of these cases are linked - including 30 household contacts - and 65 remain unlinked.
AUSSIE PANDEMIC UPDATE
In Australia Delta cases in Victoria have risen to 2189 cases reported there today, and so no real improvement again. There are now 23,230 active cases in the state and there were another 16 deaths yesterday. In NSW there were another 345 new community cases reported today with 5,037 active locally acquired cases which is lower, and they had five deaths yesterday. Queensland is reporting one new case. The ACT has 13 new cases. Overall in Australia, more than 71% of eligible Aussies are fully vaccinated, plus 15% have now had one shot so far. In contrast, there were five new cases in New Zealand at the border, and 129 new community cases. Now 85.8% of Kiwis nationally aged 12 and over have had at lease one vaccination, and the Australian rate is now also at 85.8% of all 16 year olds and older.
GOLD HOLDS
In early Asian trading, gold is holding little-changed from this time yesterday, now at US$1786/oz.
EQUITIES QUIET AT END TO CAP A GOOD WEEK
The NZX50 is marginally firmer late in its session, but only up +0.1%. For the week it is heading for a +1.0% gain. The ASX200 is flat in early Friday afternoon trade, and heading for a +0.7% weekly rise. The very large Tokyo market has opened today up +0.2% in morning trade but is facing a -1.1% weekly retreat. Hong Kong has opened up +0.4% and heading for a stellar +3.7% weekly rise, but Shanghai has opened up +0.1% in their opening trade and if that holds it will have a +0.8% weekly gain. The S&P500 started out limp, but ended stronger at the end of its Thursday session, up +0.3%. For the first four days of the week it is up +1.7%.
SWAP & BONDS RATES STEEPEN FURTHER
We don't have today's closing swap rates yet. They probably flat-lined. The 90 day bank bill rate is unchanged at 0.74% as markets work out the pace of coming OCR rises. The Australian Govt ten year benchmark rate is now at 1.83% and down -1 bp from where we were this time yesterday. The China Govt 10yr is now at 2.99% and down -3 bps. The New Zealand Govt 10 year rate is now at 2.44% and unchanged. That leaves them just above the earlier RBNZ fix for that 10yr rate at 2.43% (+6 bps). The US Govt ten year is up +3 bps from this time yesterday at 1.69%.
NZ DOLLAR FIRMER AGAIN
The Kiwi dollar is up again, now to 72.6 USc and a further +50 bps gain in a day. Against the Aussie we are firmer at 96 AUc. Against the euro we are slightly lower to 61.6 euro cents. The TWI-5 is now at 75.1 and still well above the top of the 72-74 range we have been in for most of the past eleven months.
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BITCOIN SLIPS
The bitcoin price is now at US$62,763 -2.7% lower than this time yesterday. Volatility in the past 24 hours has been high at just over +/- 3.7%.
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25 Comments
The same survey shows bankers think credit availability has weakened and will also get much weaker in the next six months, for home loans. But these same bankers are much more upbeat about their corporate and agricultural market prospects.
This is a maybe until regulated bank risk weighted cost of capital is not so favourable for the purchase of residential mortgage promissory notes and government debt. Moreover legislation must be enacted to put an end to bank liens on mortgaged residential property to encourage unsecured loans to GDP qualifying enterprises. Or:
I and others have urged a policy of land taxation in order to collect the land’s rising site value, so that it will not be pledged to banks for mortgage credit to further inflate china’s housing prices. - Link
This NZ COVID timeline shows how the NZ Govt has become so risk averse.
https://www.nzdoctor.co.nz/timeline-coronavirus
"Harmoney's Australian business has just securitised AU$105 mln of their personal loan book there. Moody's has given 66% of it their top Aaa rating, and 85% of it an investment grade rating."
Really? Aaa rating? Is Moody's mad? When did this company make a profit to justify such a high ratings? At least with a bank, they are consistently making profits which enables them to save for a rainy day if things turn sour...
The dialogues around ol' ratty (BTC) been getting a good thumping. Regardless, I found last night's flash crash on exchanges (from $8400 to as low as under $4000) to be amusing.
https://www.forbes.com/sites/billybambrough/2021/10/21/binance-ceo-issu…
I don't have much time for Judith usually, but good on her here, totally support her sentiment and views on this:
https://www.nzherald.co.nz/nz/covid-19-delta-outbreak-tearful-national-…
Tears & fears! Sadly NZ’s dilemma is compounding. Case numbers will continue to rise regardless of either restrictions or vaccines. The government’s policy is desperation to hope these two measures will slow its advance sufficiently to resist hospitalisations blowing out. Talk backs though, and similar social media, already full of those with family that are missing out on elective surgery and worse. So in fact it is already happening. That though is the key, the barometer if you like, watch for the daily numbers in hospital through covid.
Amen to that.
But business was in trouble before Covid:
https://www.academia.edu/36305451/Peak_Industrial_Output_and_the_Limits…
Today was the day Labour sent our smartest and wealthiest offshore.
Anyone young with no children/house and anyone with a skillset in demand/even wealthy will be lured with job offers and the chance to live without being held hostage with no end in sight will now be looking very hard at other countries and thinking lets do this.
Even Tasmania has just announced they will open Dec 15th to covid hotspots.
Our government needs to understand that the majority want to open back up and if not I fear we will see many normal law abiding citizens starting to question why not and we may see major protets/riots.
I know I will join in if this game of charades keeps going.
New Zealand: First dose 70.9% and second dose 56.5% of total population
Australia: First dose 72.2% and second dose 58.2% of total population.
Given the stage of the pandemic we are at it seems Australia is pulling ahead, not so much through vaccination, but they are far closer to living with Covid-19. They are on a convergent strategy with the rest of the world but we are still at sixes and sevens about what to do and when.
I do note UK cases picking up again into winter which is a reminder for us that reopening into summer is the optimum strategy.
Edit to add: Somewhat unfortunate to release a system based on traffic lights after Squid Game was released on Netflix.
Squishy, I don't think those 'world in data' figures are right.
If you look at the NZ govt page and the AUS govt page, they are giving these figures.
NZ - 86% first dose (aged 12 and over)
NZ- 69% second dose (aged 12 and over)
AUS - 86% first dose (aged 16 and over)
AUS- 72% second dose (aged 16 and over)
So since our eligable population is quite a bit bigger than theirs (as a % of total population), we are well ahead of them in first dose now.
Its been interesting to see the amount of vitriol at the government. They're just our represented decision makers and representatives. This should all be pretty procedural, we need a vaccinated populace to open up.
If you're not vaccinated, get vaccinated. If you are vaccinated, divert some energy into encouraging an unvaccinated to get vaccinated.
There will be no mass uprising or exodus, this is already pretty boring.
I thought of this article by Peggy Noonan today:
Forbes Magazine: November 30, 1998
I suppose it is commonplace to say it, but it’s true: There is no such thing as time. The past is gone and no longer exists, the future is an assumption that has not yet come, all you have is the moment—this one—but it too has passed . . . just now. The moment we are having is an awfully good one, though. History has handed us one of the easiest rides in all the story of man. It has handed us a wave of wealth so broad and deep that it would be almost disorienting if we thought about it a lot, which we don’t.
But: We know such comfort! We sleep on beds that are soft and supporting, eat food that is both good and plentiful. We touch small levers and heat our homes to exactly the degree we desire; the pores of our bare arms are open and relaxed as we read the Times in our T-shirts, while two feet away, on the other side of the plate glass window, a blizzard rages. We turn levers and get clean water, push a button for hot coffee, open doors and get ice cream, take short car trips to places where planes wait before whisking us across continents as we nap. It is all so fantastically fine.
Lately this leaves me uneasy. Does it you? Do you wonder how and why exactly we have it so different, so nice compared to thousands of years of peasants eating rocks? Is it possible that we, the people of the world, are being given a last great gift before everything changes? To me it feels like a gift. Only three generations ago, my family had to sweat in the sun to pull food from the ground..
Read Full Article: https://peggynoonan.com/76/
Interesting to see Auckland's population shrinking. Ok, big part of this is no Immigrants, but I wonder with the "great resignation" and a move to self employment and working from home, if we we may see a reversal of the movement of people to the large urban centers. - world wide?
- more affordable, better homes
- easier transport
- lower cost of living
- smaller more friendly comunities
Who knows employers may follow them or even precipitate this movement. Look at Sleepy Head moving out of Auckland.
Shouldn't be that surprising, last time I looked out birthrate was 1.61 and replacement rate is 2.1 children per woman. Without any immigration the population of New Zealand will decline immediately.
The reason Auckland has typically been spared is urbanisation within New Zealand but with an internal border still in place New Zealand is as divided from Auckland as from Australia. A kind of Gaza Strip of New Zealand if you like.
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