A review of things you need to know before you go home on Friday; more retail rate increases, confidence falls, deposits rise faster than loans, RBA sends signal by non-action, swaps consolidate, NZD stable, & more

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

MORTGAGE RATE CHANGES
HSBC raised all fixed home loan rates today. And late yesterday, both TSB and Westpac also raised rates. See here.

TERM DEPOSIT RATE CHANGES
TSB raised term deposit rates as well.

WHOLESALE MONET MARKETS STUGGLE
Uncertainty stalks wholesale money markets, suddenly raising the stakes for indebted homeowners, especially those who need to roll over soon. Swap rates have risen sharply this week, even if they didn't today.

CONSUMER CONFIDENCE FALLS, INFLATION GOES "BALLISTIC"
ANZ released its October consumer confidence survey results, and said: "Consumer confidence fell 7 points to 98 in October, with both perceptions of current conditions and expectations down sharply. The proportion of people who believe it is a good time to buy a major household item didn’t rebound from last month’s 20-point fall –it remained at -7. Inflation expectations went ballistic, rising more than 1%to 6.2%. House price inflation expectations lifted from 6.1% to 6.7%.

SAME OLE, SAME OLE
In September, total bank debt (C5) hit $506.6 bln, up +$3.1 bln in a month and up +$36.6 bln in a year. The fastest growing segment is for housing (no surprise there), up +11.6% in a year. Business debt grew +2.9% in the year to September, its fastest growth rate in 15 months. The slowest debt growth is in the farming sector, where rural debt is actually almost -1% lower than a year ago, continuing a declining trend that has been going on for about 20 months.

RECORD HIGH DEPOSIT BALANCES
Meanwhile, bank deposits (S40) rose to $411.5 bln, up +$3.7 bln in a month (and note: rising more than bank debt) and up +$17.2 bln in a year. Household balances accounted for $209.1 bln and rose +$2.1 bln in the month, up +$8.9 bln in the year. But household term deposits continued to shrink to $80.7 bln although the shrinkage was tiny this month suggesting the retreat may nearly be over. But the swelling of transaction (+$1.5 bln in the month) and savings account balances (+$861 mln in the month) continues.

FIXING A LONG-STANDING BIAS
Vero Insurance said today that it is working to remove gender-based factors from its pricing and underwriting for its consumer car insurance products.

A NO-GROWTH SECTOR
There were 36,753 home transfers in the September 2021 quarter, down more than -17% from the June 2021 quarter, Stats NZ said today. And this latest quarter data is -11% lower than for Q3-2020 and almost unchanged from Q3-2019.

RESILIENT JOBS MARKET
Stats NZ is reporting that there are now 2.28 mln paid jobs in September 2021, an increase of +5,690 (+0.3%) from the previous month. A year ago there were 2.195 mln paid jobs, so that is a 3.8% annual gain, or +85,000 in a year. At the same time, this data shows gross earning up +7.9% in the year. That equates to average pay gains of +4.1% in earnings. Analysts are looking at this data and finding reasons to be impressed. The labour market report for Q3-2021 is out on Wednesday next week and some think it will show our jobless rate down at 3.8% in Q3, down from 4.0% in June.

DIFFERING IMPACT
Of the 13 different household groups measured in the household living-costs price indexes (HLPIs), inflation in the September 2021 quarter was highest for superannuitant households, mainly due to higher prices for food, housing and household utilities, and transport, Stats NZ said today. Inflation for the superannuitant household group was 2.2% in the September 2021 quarter, compared with 1.5% for beneficiary households, which experienced the lowest inflation.

SHIPPING COs CAPTURE ALL THE GAINS
Local log prices are falling even though Chinese demand is good. It is the shipping costs that are preventing log growers from getting any of this benefit.

CONTACTLESS FEE WAIVERS EXTENDED
BNZ said it will extend contactless debit merchant service fee waivers until the end of November. Then ASB went one further, extending their waiver for these fees until the end of December.

A STATIC SITUATION
Fonterra is reporting lower New Zealand milk collections, saying "a colder and wetter start to spring this season compared to last September is impacting production volumes". Its milk collections are lower further in Australia. It main rivals in the US and EU are raising production. China is buying a smaller volume of dairy imports, but that is largely die to infant formula declines. Fonterra sol record volumes of WMP there in September.

BUYING UP
Meanwhile, giant listed Chinese dairy company Yili which has extensive New Zealand operations (Westland, Oceania), has revealed it will become the largest shareholder of Hong Kong controlled Ausnutria, an Australian goat-milk infant formula producer.

CHANGING ITS TUNE
In Australia, the RBA turned down another chance to suppress runaway bond yields, reinforcing the view the central bank will bring forward its cash rate guidance to no later than 2023 amid rising inflation. Buy skipping the opportunity, that has powered up their wholesale market yields - and it has turned a consolidating market in New Zealand into one where another late push is underway.

LOCAL PANDEMIC UPDATE
In Australia Delta cases in Victoria have risen to 1655 cases reported there today, and less than yesterday's spike. There are now 23,730 active cases in the state and there were another 10 deaths yesterday. In NSW there were another 268 new community cases reported today with 3,951 active locally acquired cases which is lower, and they also had 2 deaths yesterday. Queensland is reporting zero new cases. The ACT has 10 new cases. Overall in Australia, more than 76% of eligible Aussies are fully vaccinated, plus 12% have now had one shot so far. In contrast, there were three new cases in New Zealand at the border, and 125 new community cases including more in Christchurch. Now 87.5% of Kiwis nationally aged 12+ have had at least one vaccination, while the Australian rate is now at 87.6% of all aged 16+.

GOLD STABLE
In early Asian trading, gold is up a net +US$3 from where we were this time yesterday, now at US$1798/oz but fractionally lower than either the New York close or the London fix.

EQUITIES MOSTLY LOWER AGAIN
The NZX50 is up +0.2% late in its session but it is heading for a weekly loss of -1.0%. The ASX200 is down -0.7% in Friday afternoon trade and it is heading for a -0.5% weekly loss. The very large Tokyo market has opened today down another -0.9% in morning trade and if this holds it will be unchanged for the week. Hong Kong has opened down -0.6% and heading for a chunky -2.3% loss for the week. Shanghai has opened flat in their opening trade and if that holds it will post a -1.6% weekly retreat. The S&P500 rose +1.0% today which has been the main move of the week, largely driven by good corporate earnings.

SWAP & BONDS RATES GET AN RBA PUSH
We don't have today's closing swap rates yet. They retreated in early trade, especially in the 1-5 year terms in a market still very thin and illiquid. But they have probably turned a up a bit on the RBA non-intervention (above). The 90 day bank bill rate is up +2 bps at 0.80%. It has risen further since this RBNZ fix. The Australian Govt ten year benchmark rate is now at 1.94% and up +7 bps from this time yesterday. The China Govt 10yr is now at 2.99% and down -1 bp. The New Zealand Govt 10 year rate is now at 2.65% and up another +5 bps. That still leaves it above the earlier RBNZ fix for that 10yr rate at 2.60% (+7 bps). The US Govt ten year has recovered +1 bp to 1.56% after yesterday's large fall.

NZ DOLLAR STABLE
The Kiwi dollar is now at 71.8 USc and up from where we were this time yesterday although down from its overnight high. Against the Aussie we have dropped to 95.3 AUc. Against the euro we are soft at 61.5 euro cents. The TWI-5 is now at 75.1, little-changed but still well above the top of the 72-74 range we have been in for most of the past eleven months, and settling in to a new higher band.

Appreciate this coverage? Support us in lockdown and go ad-free. Find out how.

BITCOIN RECOVERS
The bitcoin price is now at US$61,716 and +.49% higher than this time yesterday. Volatility in the past 24 hours has been high at just over +/- 3.8%.

This soil moisture chart is animated here.

Keep ahead of upcoming events by following our Economic Calendar here ».