A review of things you need to know before you sign off on Tuesday; still no more OCR-induced rate hikes, retail activity rises, more trucking activity, HWEN fights, swaps rise again, NZD falls again, & 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
Still no more to report. Only ANZ has moved so far, post the OCR hike. Update: We had missed a Westpac advice earlier in the day, raising their floating rate by +50 bps, and raising most fixed rates by +10 bps. More here.

SAVINGS & TERM DEPOSIT RATE CHANGES
TSB has raised some key rates. Their new 6 month rate is now 3.60% and their new 1 year rates is now 4.30%. Both match or exceed main bank rates but are not special compared to challenger bank benchmarks. Update: Westpac has also raised all their TD rates for terms to 18 months. These increases are between +10 bps and +30 bps.

STRONGER THAN EXPECTED
Retail spending as recorded by electronic card transactions was stronger than expected in September, rising by +1.4%. Much of that appears to be related to increased spending by international tourists, although there was a surprising gain for spending on apparel. Spending in the hospitality sector is now back around the levels that we saw prior to the pandemic. But apart from that it is hard to know from this how much can be attributed to inflation. The number of transactions were up +5.3% from pre-pandemic levels, so there will likely be a 'real' gain. Inflation however will account for much of these September gains.

TRUCKING ALONG WELL
ANZ's truckometer metrics continue to be volatile. The Light Traffic Index (cars) lifted another +1.9% in September, while the Heavy Traffic Index (trucks) eased -3.3% after jumping strongly last month. The full quarter for the Heavy Traffic Index. rose +1.6% over the quarter which is well above the current ANZ Q3 GDP forecast of a +0.4% quarterly rise.

GOVT RESPONDS TO HWEN CLAIMING PROGRESS; FED FARMERS LIVID AT IMPOSED TWISTS
The Government has unveiled its proposal to levy farmers for greenhouse gas emissions by 2025. It claims their proposal 'would see New Zealand farmers lead the world in reducing emissions and help give NZ a competitive advantage in green conscious global marketplace'. And it claims it largely adopts the HWEN positions. One of the major differences between the Government proposal and that of He Waka Eke Noa is how on-farm sequestration is treated. The Government proposal includes some reward for riparian plantings and sequestration that occurs due to stock exclusion. However, the range of types of vegetation included is much narrower than was proposed by He Waka Eke Noa, and the Government is wanting this to be only a short-term solution, with all rewards for sequestration eventually occurring through the Emissions Trading Scheme (ETS). Farmer lobby group Fed Farmers strongly disagrees with the overall Government approach, saying it bastardises HWEN and will 'rip the guts' out of small town NZ' by rewarding foreign investors in pine plantations with tax subsidies sourced from local taxpayers.

CASE CLOSED
The Serious Fraud Office has closed its investigation into Fuji Xerox New Zealand after determining it is not in the public interest to progress it further. That decision hinged on the fact that no New Zealand investors suffered losses, and separate civil actions have generated remedies.

A NARROWER LOSS DESPITE HIGHER UNREALISED WRITEDOWNS
The RBNZ presented its Annual Report today, revealing a balance sheet that grew +11% in the year to June 2022 and now totalling $93 bln. It also said it won't be paying a dividend to the Treasury this year after reporting an $86 mln loss (lower than the $106 mln loss in 2021). Unlike last year when it was FX losses that drove the deficit, this year unrealised fair value losses, partially offset by higher interest revenue and FX gains, drove the 2022 deficit. The RBNZ and Treasury have previously agreed to forgo dividends as part of a strategy to build RBNZ reserves. (It paid a $140 mln dividend in 2021, nothing in 2020, $200 mln in 2019, and $425 mln in 2018.)

MORE GRUMPY EVEN IF CURRENT CONDITIONS OK
In Australia, business sentiment fell in September even as business conditions improved. The NAB business confidence index fall was the lowest reading since June, amid concerns over rising interest rates and a gloomy global outlook. Sentiment fell in retail, wholesale, transport, recreation & personal services, and finance, business & property. Meantime, business conditions rose, being above their pre-COVID peak, with sales surging while both profitability and employment were unchanged but stayed elevated.

MORE WIDESPREAD & WORSE THAN FEARED
Analysis in Australia following up on their Optus security disaster reveals the risks are much wider than just that one telco. New finco challengers to banks are a particular source of very high risk for clients, and are apparently treating key customer metrics cavalierly, even selling those details, it is claimed.

SWAP RATES KEEP ON RISING
Wholesale swap rates are firmer on global trends yet again with some more local push again. The key real action comes near the close. Our chart will record the final positions. The 90 day bank bill rate is down -1 bp at 3.91% and just off the highest since January 2009. The Australian 10 year bond yield is now at 3.99% and up another +13 bps from yesterday. The China 10 year bond rate is unchanged at 2.76%. The NZ Government 10 year bond rate is now at 4.44%, and up another +9 bps and still above the earlier RBNZ fix for this bond at 4.41% which was up another +8 bps from this time yesterday. The UST 10 year is now at 3.97% and up another +8 bps from this time yesterday, much of it after the Wall Street close. At this new level, that is its highest since November 2008.

EQUITIES LOWER EXCEPT LOCALLY
After being down as much as -1.3% earlier, Wall Street closed lower by less in the end, down -0.7% as repricing continues apace as benchmark bond yields rise. Tokyo is down -1.7% in morning trade. Hong Kong is down -1.1% in early trade. And Shanghai is down a lesser -0.2% in their early trade. The ASX200 is up +0.2% in their early afternoon trade. The NZX50 is up +0.5% in late afternoon trade. Rakon, Mercury, EBOS and Mainfreight are leading the gains today.

GOLD LOWER
In early Asian trade, gold is at US$1673/oz and down -US$22 from this time yesterday. But it is up slightly from where it closed in New York (US$1669/oz).

NZD DROPS FURTHER
The Kiwi dollar has fallen -¾c from this time yesterday to be just over 55.6 USc now. Against the AUD we are marginally firmer at 88.5 AUc. Against the euro we are now at 57.3 euro cents and and nearly -½c lower than this time yesterday. That all means our TWI-5 is at 66.2 and down -50 bps.

BITCOIN FALLS
Bitcoin is lower today, down -2.4% at US$19,058. Volatility over the past 24 hours was modest at just under +/- 1.5%.

This soil moisture chart is animated here.

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