What happened Friday

Business / news

A review of things you need to know before you go home on Friday; more rate hikes, KiwiSaver returns ho-hum, McLean to take over from Drylie, water storage full, volatile commodities, swaps retreat, NZD soft, & more

5th Nov 21, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
Westpac raised fixed rates, some of which are now market-highs. More here. HSBC also raised rates.

TERM DEPOSIT RATE CHANGES
Rabobank raised all its rates again, another bump up after only doing it last on Monday. Westpac also rated its rate.

KIWISAVER RETURNS HO-HUM IN SEPTEMBER QUARTER
Morningstar today released its KiwiSaver Survey to 30 September 2021. KiwiSaver funds generally reflected the subdued underlying market conditions experienced over the September quarter with the bulk of multisector funds experiencing a return of less than 1%. Funds with larger exposures to domestic growth assets and lower exposures to domestic fixed interest generally outperformed over the three-month period. The average multisector category returns ranged from 0.2% for the Conservative category to 0.9% for the Growth category.

NEW SBS BANK CEO
SBS Bank said today that Southlander Mark McLean will take over from Shaun Drylie as chief executive, effective December 2021. McLean is an internal appointment.

BRIMMING
Seven of ten reservoirs in the Auckland water storage system are now 100% full, and the others almost to the overall is now over 97% full, and well above the 92% average for this time of year. New Zealand's hydro lakes are also fuller than average for this time of year with recent inflows about normal.

COMMODITIES VOLATILE
The price of aluminium is now falling fast. It has been rising all year, but from mid-August it took off. But after hitting a high in mid-October, it has fallen as fast as the August/September run up. Also, magnesium is also past its ready heady peak. And iron ore just keeps on falling. But just as dairy prices are benefiting from the global re-opening of the foodservice industry, so is palm oil.

JAPANESE SURPRISE
In something of a surprise, Japanese household spending jumped +5% in September from August. That is a large move for them. It has reined-in the year-on-year decline quite a bit. A rise was expected in September from August, but the one delivered was about twice that expectation.

LOCAL PANDEMIC UPDATE
In Australia Delta cases in Victoria have jumped again to 1343 cases reported there today. There are now 18,952 active cases in the state and there were another 10 deaths yesterday. In NSW there were another 249 new community cases reported today with 3,065 active locally acquired cases, and they had another 3 deaths yesterday. Queensland is reporting another three new cases. The ACT has 6 new cases. Overall in Australia, more than 79% of eligible Aussies are fully vaccinated, plus 10% have now had one shot so far. In contrast, there were two new cases in New Zealand at the border, and 163 new community cases. Now 88.8% of Kiwis nationally aged 12+ have had at least one vaccination, while the Australian rate is now at 89.1% of all aged 16+.

GOLD UP
In early Asian trading, gold is at US$1795/oz and up +US$20 from this time yesterday.

EQUITIES MIXED
The S&P500 powered on up to another new record high again today, up +0.4% in Thursday trade. Tokyo however is down -0.4% in late morning trade but that will still leave it with a strong +2.9% rise for the week. Hong Kong has opened -1.3% lower in their early trade and heading for a -1.5% weekly drop. Shanghai is also down but only by -0.2% and heading for a -0.3% weekly slip. The ASX200 is up a respectable +0.5% in midday trade and heading for a stellar +2.0% weekly gain. The NZX50 is up +0.6% in late trade today but that still means a weekly fall of -0.6%.

SWAP & BONDS RATES RETREAT
We don't have today's closing swap rates yet. They are probably sharply lower. The 90 day bank bill rate is unchanged at 0.80%.The Australian Govt ten year benchmark rate is now at 1.77% and down -12 bps. The China Govt 10yr is now at 2.92% and down -4 bps. The New Zealand Govt 10 year rate is now at 2.53% and down -5 bps from this time yesterday. That still leaves it above the earlier RBNZ fix for that 10yr rate at 2.50% (-6 bps). The US Govt ten year has fallen a rather sharp -8 bps to just on 1.53%.

NZ DOLLAR SOFT
The Kiwi dollar is now at 70.9 and more than -¾c lower from where we were at this time yesterday. However, against the Aussie we are unchanged at 96 AUc. Against the euro we are at 61.4 euro cents which is -40 bps lower. The TWI-5 is now at 74.8, down -50 bps, 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 SLIPS
The bitcoin price is now at US$61,114, down -2.4% from where we were at this time yesterday. Volatility in the past 24 hours has been modest at just under +/- 1.7%.

This soil moisture chart is animated here.

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

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

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48 Comments

by Audaxes | 5th Nov 21, 4:03pm 1636081418

And iron ore just keeps on falling.

It was said to be the absolutely perfect scenario (see: below). The vaccines put an end to the pandemic within sight, combined with intractable problems getting any iron out of the ground and then shipped somewhere useful, demand for the commodity was expected to be robust and better while at the same time supply would remain constricted.

With American consumers going bananas, and a resurgent China consuming as much of the metal as could be sourced, both supply and demand were declared to be manifest tailwinds for a long time to come.

“Everyone” said it was practically guaranteed as the iron (and steel) price reached toward the stratosphere: Link

by J.C. | 5th Nov 21, 4:12pm 1636081940

Yes Audaxes. Not getting much attention here but iron ore inventories at ports in China is going off the richter and rebar price is in freefall. Rio Tinto now down 4% yoy but smashed in past 2 months and down 40%. Fortescue down 50% in past few months.

by Audaxes | 5th Nov 21, 5:22pm 1636086153

California Forced To Embrace Natural Gas

Going green? RT visits British town opening NEW coal mine (VIDEO)

by HouseMouse | 5th Nov 21, 5:33pm 1636086833

Over at Macrobusiness they reckon the Aussie reserve bank might actually need to CUT their OCR next year..

by bw | 5th Nov 21, 4:24pm 1636082686

Big call. But this blogger did call the same thing for Oil well ahead of time.

Iron ore price heads for zero. May go negative

https://www.macrobusiness.com.au/2021/11/iron-ore-price-heads-for-zero-…

by Audaxes | 5th Nov 21, 4:09pm 1636081741

In early Asian trading, gold is at US$1795/oz and up +US$20 from this time yesterday.

Treasury real yield curves traded more negative, worse outcomes anticipated.

by J.C. | 5th Nov 21, 4:20pm 1636082425

Bit of a relief could be on the horizon for the long-suffering for gold bugs.

by GV 27 | 5th Nov 21, 4:11pm 1636081905

Do we really think there's going to be a border around Auckland of any kind come Xmas?

Checking vaccination certificates is not workable. The queues would be even worse than they usually are. Hours at checkpoints and then again in queues.

There's not going to be capacity for testing between Xmas and New Years either, due to the way the days and stats fall.

The government needs to front around this, because 'the Aucklanders are coming' might be the kick up the arse the slacker parts of NZ need to get vaccinated. The fact we don't know what the options on the table are suggests there should be real questions about whether travel out of Auckland is going to be allowed at all.

by HouseMouse | 5th Nov 21, 4:15pm 1636082125

The government are a shambles. Mixed messages all over the place.

Hipkins says that times will need to be booked in for entering and leaving Auckland, then Robertson dismisses that.

Which is right, but how could they come out with such a hare-brained idea to begin with?

by Te Kooti | 5th Nov 21, 4:21pm 1636082468

My turn to agree with you HM, it is a shambles and risks causing Labour serious harm IMO. Is it because Ardern will not be around to have to finance and repay the damage being done? I was a big supporter but now it's clear they have lost their way completely.

by Foxglove. | 5th Nov 21, 5:14pm 1636085670

President of Police Association said it all didn’t he. That is we are not mission impossible and don’t try and off load responsibility for all your daft schemes and failures onto the police force. Xmas is seven weeks away, but people will want start moving to family outside of Auckland, and the other way, two or more beforehand. There will be nothing to monitor and control this movement in place by then. So either Auckland remains locked down or it opens up. On top of that, people cannot be forced to be vaxed, and like it or not, to alienate and segregate them and then curtail their freedom of movement is neither moral nor legal. If vaccinations had been underway in volume by March, this predicament could have been avoided, and here the government is seeking to impose on the rights of civilians, just to cover that failing. “Kiwis have a right to travel by law,” one experts take on the Bolton High Court decision and that don’t mean just internationally does it.

by Rob Reid | 5th Nov 21, 5:35pm 1636086933

Right then. There will be extremely clear and stringent border restrictions to protect and be kind to the vulnerable, on an honesty basis.

by Uninterested | 5th Nov 21, 4:29pm 1636082976

Huge money printing. The only reason for it that I can see is to give the govt enough time to roll out the extremely slow vaccination purchase.

Bike bridge no bike bridge.

3 waters: you can opt out. No. Change of plan: forced through.

Complete and utter melt down.

by Nifty1 | 5th Nov 21, 4:16pm 1636082174

Good ol' expert Shaun Hendy is saying NZ will be in Red Light 2/3s of 2022, so not looking great... I think they'll crack under pressure and remove the boundary restrictions around Auckland for height of summer and then clamp back down... inevitably the virus will spread everywhere and we'll be back in panic mode.

by JimboJones | 5th Nov 21, 5:00pm 1636084850

Now we have had 3 deaths he will be wanting level 5 lockdown.

by Rosenstein | 5th Nov 21, 5:32pm 1636086732

Shaun Hendy is a well funded unfortunately placed hysteric, that the incompetent use to supplement their lack of critical thinking acumen.

by HouseMouse | 5th Nov 21, 5:36pm 1636086986

Hysteric indeed.

by Jonny.Foe | 5th Nov 21, 6:30pm 1636090227

Shaun Hendy has been on the money throughout the pandemic - if traders were right as often they would be billionaires.

by chebbo | 6th Nov 21, 7:21am 1636136506

The same Shaun Hendy who predicted 7000 deaths per year at an 80% vaccination rate? I suspect we're about to find out just how accurate his modelling is, but my guess is "not very".

His job isn't to make accurate predictions. It's to come to conclusions which the people funding him happen to like.

by HouseMouse | 5th Nov 21, 5:35pm 1636086946

FFS, he can F$%^ right off!!!!

Trust me, there will be riots if he has his way.

by powerdownkiwi | 5th Nov 21, 6:00pm 1636088412

You're talking about the man who wrote this:

https://www.bwb.co.nz/books/silencing-science

But I guess you don't do irony when it involves yourself.

by HouseMouse | 5th Nov 21, 6:12pm 1636089121

Have a lovely evening with yourself.

What are YOUR qualifications to talk from such a high and mighty position?

Bugger all from what I can see.

by Jonny.Foe | 5th Nov 21, 6:37pm 1636090655

I think the point is that Hendy is extremely well qualified to comment on the pandemic and what is likely to happen next. His understanding of the empirical evidence from across the world is probably unparalleled in NZ and his forecasts thus far have been accurate.

by JimboJones | 5th Nov 21, 6:55pm 1636091723

But is he well qualified to determine the level of risk and death that the public is willing to allow? To me that is the role of a politician not a scientist. Hendry has been calling for a level 4 circuit breaker despite our covid death rate being about 1/30 of the road toll since this lockdown started, it’s hard to call that an accurate assessment of risk.

by powerdownkiwi | 5th Nov 21, 6:59pm 1636091953

You're talking about a public who haven't been told (although I'm pleasantly surprised at the groundswell of people working it out for themselves recently) what is ahead.

So they're still away back in the 'I need to make money' stage. It's not their fault......

by Noncents | 5th Nov 21, 6:56pm 1636091805

While he may be a scientist. Modelling and forecasting is an art not a science. He will be using assumptions, some of which will be flawed. The response is also not scientific, it is political.

I doubt we will even see the traffic lights. The rest of the world is open and accepting of Covid. Politically we will have no choice but to join them.

by VTHO | 5th Nov 21, 4:16pm 1636082198

I expect no border at all. Anything less will be firstly, a complete disaster in terms of how it operates and secondly, political suicide for Labour and absolutely unacceptable for New Zealanders.. If there is I'll be out there protesting with Brian lol.

by Uninterested | 5th Nov 21, 4:32pm 1636083122

I go for drives out of Ak because drives within the Ak boundary are not pleasant. To get through checkpoint Charley quickly I may need to drive at midnight. Haha.

by GV 27 | 5th Nov 21, 6:24pm 1636089867

Agreed. I text a few mates and we go for fish and chips and see where we end up. Sometimes it's Maraetai, sometimes it's Tairua. That's part of living in NZ in summer. I'm not pre-registering our journey, sitting in a checkpoint or giving details of where I want to go before I leave.

by JimboJones | 5th Nov 21, 5:02pm 1636084956

Its getting ridiculous. People don't want vaccination targets, they want dates. If they did set a date to give us all certainty, the vaccination rate on that date is probably going to be within +-2% of what they expected, why be so pedantic. Especially when Aus stopped lockdown with 20% less vaccinated than our targets (or 300% more unvaccinated if you flip it over), why are we pissing around over a few percent.

by Foxglove. | 5th Nov 21, 5:47pm 1636087651

Believe you have identified the solution. Something mealy mouthed like - 90% was only ever an ideal indication, advice from public health authorities is that NZ is now well positioned to free up all domestic travel and this is supported by the critical improvements now completed by us, to health services. In truth NZ will then be on a wing and a prayer.

by Bananafishbones | 5th Nov 21, 6:47pm 1636091274

Why be so pedantic?Because they are so utterly petrified of what will be levelled at them by certain groups if things begin to unravel,that they are prepared to throw the majority under the bus.

by MLSmith1 | 5th Nov 21, 6:59pm 1636091964

Aha… hence 1 case in Northland then they lock place down again… let it rip

by Foxglove. | 6th Nov 21, 7:53am 1636138386

Not while the PM is in situ. Only announce it when she is in the air, southward bound. This government has become so cunning & manipulative, they make Machiavelli look like Saint Francis.

by Theoracle | 5th Nov 21, 8:47pm 1636098470

Exactly. Post colonial genocide against the indigenous version 2.0.

Govt would never hear the end of it.

There'd be legal claims galore mounted citing lack of protection under indigenous protections.

That's basically in a nutshell what the govt are terrified of... the majority unvaccinated turning on them claiming Maori and PI genocide. I would even go so far as to say war claims would be taken to The Hague.

Not joking.

by JimboJones | 5th Nov 21, 4:55pm 1636084505

NSW had less cases than us today after adjusting for the population difference. They had less than 1/3 of Auckland's cases after adjusting for the population difference.

by Albert2020 | 5th Nov 21, 5:27pm 1636086444

They also have had a shed load more natural immunity

by JimboJones | 5th Nov 21, 6:54pm 1636091666

I imagine that would be a very small shed statistically

by nigelh | 5th Nov 21, 7:47pm 1636094865

"Seven of ten reservoirs in the Auckland water storage system are now 100% full, ......New Zealand's hydro lakes are also fuller than average for this time of year with recent inflows about normal."

Must be climate change for this to be going so well. Short while ago all the when the dams and lakes were low it was all due to climate change, man made of course.

The new Water Care CEO will be using CC to push for more dams or lifting levels in existing. Its likely that this is another infrastructure issue for Akl. Irrespective of CC and solely due to population increase. Perhaps someone with more knowledge can give a time line of these Akl dams.

Only problem is I understand Akl is up to its borrowing limit but Water Care isn't if it were seperated out. This is thanks to some sort of borrowing consolidation over the whole of Akl. which includes Water Care.

by Rob Reid | 5th Nov 21, 8:14pm 1636096477

Not sure about climate change causing the dry, but La Nina weather patterns are back, causing the wet. La Nina appears to trump.

In the normal course we would get used to full dams, then in a couple of years El Nino will resume and we will be back to crucifying car washers.

by powerdownkiwi | 5th Nov 21, 8:47pm 1636098457

Residual denial aside (and there ain't much these days, luckily - it's a bit like the way those old çommunist' bleaters went quiet, in another era) the problem with anthropogeninc forcing is the excess of energy trapped in the system. When energy is concentrated, weather events get more extreme. That goes both ways; drought and downpour.

by Lapun | 5th Nov 21, 11:31pm 1636108292

I'm convinced of man-made climate warming. And terrified of the possibilities. However ""When energy is concentrated, weather events get more extreme"" is unproven. I first heard it after that hurricane destroyed New Orleans 16 years ago and we were assured more hurricanes would be hitting the USA - but then the next ten years were exceptionally quiet. Maybe you are right but it is unproven. Consider the worlds average temperature is just under 290 Kelvin so a three degree increase would represent about 1% more atmospheric energy. Changes to ocean currents are much more likely to cause unexpected dramatic weather events. Notice how ocean shipping worries more about the 'roaring forties' than the well named Pacific Ocean so maybe extreme weather and total energy are unconnected.

Please emphasize we are changing something we do not understand - the result is likely to bad. But leave out all references to 'extreme weather' - it will go down well with the converted but not persuade skeptics and deniers to rethink.

by powerdownkiwi | 6th Nov 21, 8:23am 1636140188

You are muddling frequency with intensity. It's not numbers of hurricanes, it's the heat-energy gathered from the sea surface when one winds (as in: corckscrews) up.

by sharetrader | 5th Nov 21, 9:54pm 1636102451

the last dam auckland built was in 1977 , 45 years ago and the problem now is where if you could, would you build another one

by solardb | 6th Nov 21, 8:05am 1636139104

Tuakau

by nktokyo | 6th Nov 21, 8:16am 1636139776

Japan eased a lot of restrictions so people are out and about again. They have high vaccine numbers too.

by nktokyo | 6th Nov 21, 8:18am 1636139907

Interesting on the commodities slide. Lumber crashed back down overseas too. That might suggest the inflation jump won't become a runaway freight train.

by bw | 6th Nov 21, 8:23am 1636140219

Maybe.

But the many have been out and about stimulating the economy, before their savings are whittled away by said Inflation.

Mission Accomplished?