A review of things you need to know before you go home on Wednesday; many retail rate changes, import surge, business costs pressures not easing, insurer stress tests, swaps up sharply again, NZD holds, & more

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
ICBC has raised all its fixed home loan rates. The Cooperative Bank has raised all its fixed rates by +10 to +25 bps.

TERM DEPOSIT RATE CHANGES
BNZ has raised most of its term deposit rates, and a 3% rate makes a rare appearance after two years. The Cooperative Bank raised most of its rates by between +5 and +25 bps. ICBC also raised its offers, as did NZCU Baywide.

IMPORTS SURGE, ESPECIALLY EVs
Statistics NZ says September was the third record month in a row for imports, with the figure reaching $6.6 bln - up +30% on the same month a year ago. The trade deficit hit -$2.2 bln in the month, -$4.1 bln for the year to September, driven by both rising import volumes, and now also fast pricing prices for imports. The fast jump in the number of electric vehicles being imported is a notable feature.

'UNRELENTING COST PRESSURES'
Latest ANZ Business Outlook survey shows over 90% of firms in every sector apart from services are facing sharply higher costs. Inflation expectations blowing out, they say. The same survey records a reduction in economic activity.

A SPRING PULLBACK, BUT AN ANNUAL FRENZY
The lockdowns in September sharply reduced mortgage lending in the month. In fact the overall level was the lowest of any month since July 2020 (excepting January). All types of lending reduced (FHB, owner-occupier, investor), although lending to investors suffered the least. Despite the September dip, the total new business written in the past twelve months exceeds $100 bln, and has done for the years to July, August and now September (and the only three months at this level ever). More here.

HIGHER STRESS -> HIGHER PREMIUMS
The RBNZ released the results of the General Insurance Industry Stress Tests today. They tested for three separate stresses; a reinsurance crisis, a pandemic, and a major weather event. The largest risk to these insurers was found to be a reinsurance crisis which could occur based on international events. All three scenarios could give rise to lower returns for the general insurers operating in New Zealand, and "could lead to higher premiums in the future". Climate change will be added as a fourth stress test in future.

MAKING SURE HAVELOCK NORTH NEVER HAPPENS AGAIN
The Government has decided to mandate the centralisation of all water distribution assets, despite protests from some local councils who currently own this infrastructure. This is seen as a "heavy-handed approach", requiring councils to transfer ownership of their water assets into four new water entities controlled by Wellington.

UDALL IS THE US AMBASSADOR TO NZ
The US Senate has confirmed the appointment of Tom Udall as the US Ambassador to New Zealand. We was a two-term Democratic senator from New Mexico before he retired. His Congressional legacy involves advocating for Native American tribes, climate change, and conservation issues.

AUSSIE Q3 CPI DIPS MORE THAN EXPECTED
Australia's inflation rates dipped to 3.0% in September, down from 3.8% in June. This was an expected reversal, but the effect was more than anticipated (3.1%). The more technical RBA Trimmed Mean CPI rose 2.1% year-on-year in Q3, the most since Q4 2015, after a 1.6% rise in Q2. One large supermarket chain in Australia, Woolworths, says it is facing fierce cost rises. And that comes at a time more Australians are eating out after lockdown, rolling back their recent high volumes.

PANDEMIC UPDATE
In Australia Delta cases in Victoria have risen to 1534 cases reported there today, and so more improvement still. There are now 24,715 active cases in the state and there were another 13 deaths yesterday. In NSW there were another 304 new community cases reported today with 4,170 active locally acquired cases which is lower, and they also had 3 deaths yesterday. Queensland is reporting two new cases. The ACT has 10 new cases. Overall in Australia, more than 74% of eligible Aussies are fully vaccinated, plus 13% have now had one shot so far. In contrast, there were four new cases in New Zealand at the border, and 74 new community cases. Now 86.9% of Kiwis nationally aged 12+ have had at least one vaccination, and the Australian rate is now at 87.1% of all aged 16+. More here.

GOLD SLIPS
In early Asian trading, gold is down -US$10 from where we were this time yesterday, now at US$1793/oz.

EQUITIES GENERALLY SOFT
The NZX50 is down -0.4% late in its session. The ASX200 is down -0.2% in Wednesday afternoon trade. The very large Tokyo market has opened today down -0.6% in mid-day trade after yesterday's very strong rise. Hong Kong has opened down -1.3%, and Shanghai has opened down -0.6% in their opening trade. The S&P500 ended up a minor +0.2% but it was another all-time closing record.

SWAP & BONDS RATES JUMP AGAIN
We don't have today's closing swap rates yet. They probably rose again and substantially, about another +10 bps which is very notable, and pushed up today by the Aussie inflation data. The 90 day bank bill rate is up +1 at 0.75%. The Australian Govt ten year benchmark rate is now at 1.86% and up +6 bps from this time yesterday. The China Govt 10yr is now at 3.00% and unchanged. The New Zealand Govt 10 year rate is now at 2.54% and up a very sharp +11 bps. That leaves them still well above the earlier RBNZ fix for that 10yr rate at 2.46% (+7 bps). The US Govt ten year is little-changed at 1.63%.

NZ DOLLAR STILL ON HOLD
The Kiwi dollar is now at 71.6 USc and marginally softer than where we were this time yesterday. Against the Aussie we are -½c softer at 95.1 AUc. Against the euro we are slightly firmer at 61.8 euro cents. The TWI-5 is still at 75.1, unchanged but 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 EASES BACK
The bitcoin price is now at US$60,760 which is -3.3% lower than this time yesterday. It is now -9.3% below its high on October 21, 2021. Volatility in the past 24 hours has been moderate at just over +/- 2.6%.

This soil moisture chart is animated here.

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