Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
ANZ and TSB both raised some fixed mortgage rates, both taking their carded offers to just under their main bank rivals. More here. ICBC also raised their market-leading rates and they have now lost that tag.
TERM DEPOSIT RATE CHANGES
Both ANZ and TSB raised some selected TD rate, and in the case of ANZ it was only by +5 bps, in the case of TSB the rises were +5bps to +30 bps. ICBC also raised their rates.
JUST WHEN YOU THOUGHT PRICES CAN'T GO HIGHER ...
Residential property sales volumes were down -22% in October year-on-year as the largest market stayed in lockdown, but prices went through the roof. This is according to the October REINZ reports. Auckland's median selling price was up +$250,000 in the last 12 months, a "mere" $120 per working hour (and that was tax-free), or equivalent to a worker being paid $180 per hour. How sustainable that is, is being questioned by ASB's economists.
FASTEST RISE IN A DECADE
Food prices "fall for the first time since February" is how Stats NZ led its release of October data. But that is seasonally normal and has happened in October from September for 11 consecutive years. In this case, the more relevant year-on-year measure has them up +3.7% and that is the highest rise in the past ten years for an October.
OUR FUND TO INVEST $100 MLN IN THEIR FUND
The NZ Super Fund has committed US$100 mln to the Fifth Wall Climate Technology Fund, an early-stage fund managed by leading real estate technology venture capital firm Fifth Wall, that seeks to invest in new technologies to "decarbonise the global real estate industry". There is a lot of cascading fund investing these days and in this case we seem to be well down the line. This is a pattern however. In October the NZ Super Fund announced a €125 mln investment in "sustainable energy infrastructure" in the Copenhagen Infrastructure Partners’ Energy Transition Fund. Lots of money, lots of good intentions, exposed to big fees from savvy venture capital firms in early-stage, risky ideas. The worthwhile thing about this investment is a) the NZ Super Fund has a good track record, and b) the real estate industry is a large generator of hot air so anything to reduce that is probably a good thing.
NEW TICKET CLIPPER
Share market operator NZX, through its subsidiary Smartshares, is paying $25 million to buy the management rights for the ASB Superannuation Master Trust from ASB. The Trust manages some $1.8 billion in retirement savings for more than 17,500 members across more than 100 employer groups. The management rights transition is expected to happen either in late 2021 or early 2022 with a transition of services over a two-year period.
YIELDS STABLE
There were 86 bids at today's NZGB bond tenders and 46 won something. The May 2026 $200 mln went for a yield of 2.31%, and a fraction lower than the 2.32% last time. The May 2031 $200 mln was the most popular attracting $737 mln in bids and going for a 2.60% yield, compared with 2.58% last time. The $100 mln May 2037 was won with a 2.92% yield, vs 2.84% last time. All up, just under $1.3 bln was bid today leaving $789 mln hanging.
FREIGHT IS WHERE THE MONEY IS
NZX50 listed freight company Mainfreight (MFT, #4) reported strong conditions in its first half trading to September 30, 2021. All five regions in their global network improved. Revenue was up +41% to $2.275 bln. Net profit after tax was up +79% to $130 mln and more than double its pre-pandemic half-yearly result.
GROWTH BUT NO PROFITS
Xero posted a small -NZ$6 mln loss today, but also announced it had acquired an American inventory tracking software start-up, Locate. They now have more than 3 mln subscribers.
GULP
The Australian unemployment rate jumped way more than expected. Employment dropped by -46,000 in October when a +50,000 rise was expected. Most of the jobs lost were full-time jobs, bringing to more than -326,000 the number of jobs lost during lockdowns in NSW, Victoria and Canberra. Their jobless rate went from 4.6% to 5.2%.
LOCAL PANDEMIC UPDATE
In Australia Delta cases in Victoria have risen as 1313 cases were reported there today. There are now 15,675 active cases in the state (an increase) and there were another 4 deaths yesterday. In NSW there were another 261 new community cases reported today with 2,779 active locally acquired cases, and they had another one death yesterday. Queensland is reporting three new cases. The ACT has 9 new cases. Overall in Australia, just under 82% of eligible Aussies are fully vaccinated, plus 8% have now had one shot so far. In contrast, there were no new cases in New Zealand at the border, and 185 new community cases. Now 89.9% of Kiwis nationally aged 12+ have had at least one vaccination, and the Australian rate is now also at 89.7% of all aged 16+.
GOLD FIRM
In early Asian trading, gold is at US$1850/oz and up +US$21 from this time yesterday. That is very similar to the closing New York price, although -US$9 lower than the earlier London fix.
EQUITIES MOSTLY LOWER
The S&P500 ended its Wednesday session falling away sharply to close down -0.8% in yet another unimpressive session. The NZX50 is unimpressive too near the end of its session here today but at least it is holding its own, unchanged. The ASX200 is down a sharp -1.2% in their early afternoon trade. In Tokyo is up +0.3% in late morning trade. Hong Kong is down -0.5% in their early trade, while Shanghai is up +0.3% and bucking the trend.
SWAP & BONDS RATES TURN UP SHARPLY
We don't have today's closing swap rates yet. They are higher and steeper. The one year is up +4 bps, the two year up +8 bps, and the ten year up almost +10 bps. The 90 day bank bill rate is up +1 bp at 0.84%.The Australian Govt ten year benchmark rate is now at 1.84% and up +8 bps. The China Govt 10yr is now at 2.94% and up +3 bps. The New Zealand Govt 10 year rate is now at 2.63%, up +9 bps but now below the earlier RBNZ fix for that 10yr rate at 2.64% (+13 bp). The US Govt ten year is up +10 bps from this time yesterday to just on 1.57% and following the huge CPI jump in the US.
NZ DOLLAR SOFT AGAIN
The Kiwi dollar is now at 70.6 and -¾c lower than this time yesterday. Against the Aussie we are only marginally lower at 96.4 AUc. Against the euro we are unchanged at 61.5 euro cents. The TWI-5 is now back at 74.8.
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BITCOIN VOLATILE
After hitting a new record high at US$68,991 earlier in the day, the bitcoin price is now at US$64,502 and a net -3.8% retreat since this time yesterday. Volatility in the past 24 hours has been very high at just over +/- 4.7%.
This soil moisture chart is animated here.
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