A review of things you need to know before you sign off on Monday; under 5% mortgage rates near end, Spring selling season weak, car sales soft, wholesale electricity prices low, swaps stable, NZD firms, & more

Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).

MORTGAGE RATE CHANGES - NEAR THE END OF SUB-5% FIXED RATES
Heartland Bank raised their market-leading fixed mortgage rates today by +30 bps to +35 bps. They now have no rates under 5%. TSB raised some rates by +20 bps to +36 bps. They still have their 1 year fixed rates below 5% - just, at 4.99%. The Co-operative Bank raised some rates by between +16 bps and +36 bps. They now have no rates below 5%. The only banks with any fixed rate options below 5% now are ICBC, SBS Bank and TSB. Be quick.

TERM DEPOSDIT RATE CHANGES
None to report so far.

SPRING SELLING SEASON A FIZZER SO FAR
Apart from the June 2020 pandemic spike, the national days of for-sale housing inventory is 27 weeks which is the equal highest in 8 years. In Auckland it is 35 weeks of inventory at the current sales rate, an eleven year high. These are very high levels, especially as this supposed to be a heavy selling period. Worse, the national average asking price has decreased by around -$10,000 per month since January. More here.

CLEAN CAR DISCOUNTS GO TO THE WEALTHY
New car sales were soft in September, with new car sales down -10.8% from the same month a year ago and used imports down a bit less than -1%. But the rush to buy expensive electric and hybrid cars is on, with that category up to more than 60% of all cars sold in the month. It is no longer a niche segment, although to be fair sales volumes are distorted by Tesla catchup sales orders. More here. Those who aren't wealthy aren't buying, with affordability hurt by high interest rates and the low NZD. (Tax the poor, to give discounts to the rich?)

BOLSTERED
TSB says it has "fortified its Board's skillset with the appointment of a new Director, Melanie Templeton". Templeton most recently served as the Chair of PledgeMe, and as an Independent Director and Chair of the Audit and Risk Committee for MTF Finance and Xerra. She has also been a Committee Member on Inland Revenue’s Risk and Assurance Committee since 2017.

A TWELVE YEAR LOW
The cost of wholesale electricity is very low at present. This is a commodity that has volatile price patterns. But this year September and October are running with very low prices (with modest demand and very full hydro lakes). The average for this period do far in 2022 is $47.30/MWhr with the low being 5c an the high being $107.40. For the full two-month period in 2021 it averaged $74.87/MWhr. In 2020 it was $124.79. And in 2019 it was $113.88. You have to go back to 2010 to find a lower average price of this same two month period.

A TOUGH MARKET TO LAUCH AN UNSECURED, UNSUBORDINATED BOND
Kiwibank says it is looking at making a NZ$ bond offer for 5 year, unsecured, unsubordinated fixed rate notes to New Zealand retail and institutional investors. No other details are available at this time. Kiwibank has a $275 mln ten year Note on issue with a first rate reset date of December 2025. This (KWB010) listed 10 year bond was issued with a coupon paying 2.36% pa at par but is currently sharply discounted so that it is priced to yield 6.15% today.

SHORT, AND HALVED
RBNZ data out today (L3) reveals that as at August 2022, banks had almost $400 bln of "non-market funding" (essentially deposit funding from customers, household, business and Government). Of that only 2.5% was for a term of 1 year or longer. That level is near its record low (2.2% in December 2021) and down from the high of 5.5% in January 2015. Because (amateur) depositors forsake term investing in banks, they need (professional) wholesale investors, who seem quite happy to take longer positions.

BANK RUN 2022-STYLE
Social media is making a mess of globally systemic banking giant Credit Suisse's reputation, suggesting it is about to be the 2022 equivalent of Lehman Bros. The real fear is that rumours might become self-fulfilling. Those fears are rising in professional money markets as it would be a bad look to get caught if it does belly-flop. Taxpayers to the rescue, again?

BRAZIL RUNOFF NOW
In Brazil, a presidential runoff election is the outcome of today's vote. It will be held on October 30. The tightness of the election result came as a surprise, since pre-election polls had given the leftist candidate a commanding lead over the incumbent. But leftist ex-president da Silva received 47.9% of the votes, versus 43.7% for far-right Bolsonaro, with 97% of the ballots counted. da Silva needed 50% to win on the first ballot.

SWAP RATES BACK UP
Wholesale swap rates are probably little-changed today. But the key action comes near the close. Our chart will record the final positions. The 90 day bank bill rate is up +2 bps at 3.87% settling in as we are now only one business day away from the RBNZ OCR review. The Australian 10 year bond yield is now at 3.91% and down -6 bps since Friday. The China 10 year bond rate is up +1 bp from Friday at 2.77%. The NZ Government 10 year bond rate is now at 4.30%, and down -1 bp and still above the earlier RBNZ fix for this bond at 4.29% which was up +5 bps from Friday. The UST 10 year is now at 3.79% and unchanged from this time Friday.

EQUITIES MOSTLY LOWER
Like most equity markets, the NZX50 lost -3.3% in capitalisation last week with hardly any listed companies posting gains. And today the NZX50 is down another -0.6%. The ASX200 is down -0.1% in afternoon trade. Tokyo opened lower but has since shown life and is now up +0.6% and the early outlier. Hong Kong has opened a full -1.0% lower. Shanghai has opened -0.6% lower. In New York, the S&P500 fell -9.3% in September and the futures suggests it will open tonight at about the level it finished on Friday.

GOLD FIRMISH
In early Asian trade, gold is at US$1667/oz and a rise of +US$6 from this morning.

NZD IN MINOR FIRMING
The Kiwi dollar has firmed slightly since this morning to be just over 56.4 USc and recovering +40 bps. Against the AUD we are little-changed at 87.6 AUc. Against the euro we are now at 57.4 euro cents and also little-changed. That all means our TWI-5 is at 66.6 and up +30 bps from this morning's open.

BITCOIN LACKLUSTER
Bitcoin isn't moving much today and is now at US$19,152. Volatility over the past 24 hours has been modest at just on +/- 1.2%.

This soil moisture chart is animated here.

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