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
Nelson Building Society (NBS) raised its floating rate by +50 bps today tp 7.475%. It also raised fixed rates. Heartland Bank raised its floating rate by +50 bps to 5.49% Basecorp Finance raised theirs to 7.95%. Update: ANZ has raised its fixed rates sharply. More here.
TERM DEPOSIT RATE CHANGES
Unity Money raised their nine month TD rate to 3.80% and their 18 month rate to 4.30%. Update: ANZ has raised term deposit rates too. More here.
A CONCERNING SIGNAL
Today's dairy auction was a weak one, featuring soft customer demand. Only butter and WMP showed any serious bidding. Overall prices fell -4.6% and that was on top of the prior -3.5% fall two weeks ago. ASB economist Nathaniel Keall, who previously had a market-leading Farmgate Milk Price pick of $10 per kilogram of milk solids for this season has dropped his pick to $9.40 and says of the market, "the demand just isn’t there right now and that weighs heavily on our forecast given prices for a huge chunk of the season’s product are being struck right now". Other analysts are also flagging "downside risks" to the new season farmgate payout prices. If those do fall, the dairy farming industry will be in a very tight squeeze between falling revenues and rising costs. Bankers would then start seeking business changes to protect dairy farm lending viability.
FARM INVESTMENT SOFTENS
September tractor sales of new units fell -20% from year ago levels, and come in -9% lower than the ten year average for a September.
FINTECHS REQUIRED TO KNOW CUSTOMERS IN DETAIL
The FMA has issued a formal warning to InvestNow for failing to comply with anti-money laundering requirements, including conducting customer due diligence, and having adequate and effective processes. The regulator said InvestNow failed to complete standard customer due diligence, including obtaining sufficient information about the nature and purpose of the proposed business relationship from their customers, nor did it take reasonable steps to complete identity verification of customers and beneficial owners. It failed to conduct due diligence on certain customers, including taking reasonable steps to verify source of wealth or funds, or establish, implement and maintain an adequate and effective AML/CFT program.
SHOW ME THE EVIDENCE
The NZIER is calling on policy officials to demand evidence from government officials when evaluating public policy moves. They say the data is there in a safe, internationally-leading way. They want these sort of evaluations to become routine for most policy initiatives.
MARGINAL RATES BENCHMARKED
In the US, the IRD has announced its inflation-adjusted marginal tax rates for individuals for their 2023 tax year. Here is a rough comparison with current New Zealand's IRD marginal rates.
| USD bands | NZD equiv | IRS Rate | NZD bands | eqiv NZ rate | |
| $1 - $11,000 | $1 - $19,375 | 10% | $1 - $14,000 | 10.5% | |
| $11,000 - $44,725 | $19,376 - $78,785 | 12% | $14,001 - $48,000 | 17% | |
| $48,001 - $70,000 | 30% | ||||
| $44,726 - $95,375 | $78,786 - $168,000 | 22% | $70,000 - $180,000 | 33% | |
| $95,376 - $182,100 | $168,001 - $320,750 | 24% | $180,000 and over | 39% | |
| $182,101 - $231,250 | $320,751 - $407,350 | 32% | 39% | ||
| $231,251 - $578,125 | $407,351 - $1,018,350 | 35% | 39% | ||
| $578,126 and over | $1,018,351 and over | 37% | 39% |
INFLOW RUSH
Long term capital flows into the US are strong, according to the authoritative UST TIC data. These flows in hit their second highest net inflow levels in the history of this data, almost +US$200 bln in the single month, and only beaten by the March 2021 data.
'RAIN FOR MONTHS'
A new rain-bearing system will hit Australia's central and eastern states in the coming days, as authorities warn flooding will continue for months. And when it stops, the fire-load will be built for the next drought and fire cycle.
SWAP RATES FIRMER AGAIN
Wholesale swap rates are firmer again today and building on the initial reaction to of the September CPI data yesterday. The key real action comes near the close. Our chart will record the final positions but they will be very much higher, perhaps by +15 bps. The 90 day bank bill rate is up another +6 bps at 4.10%. The Australian 10 year bond yield is now at 3.93% and down -5 bps. The China 10 year bond rate is little-changed at 2.72%. The NZ Government 10 year bond rate is now at 4.63%, and up +2 bps and now above the earlier RBNZ fix for this bond at 4.58% which was down -3 bps from this time yesterday. The UST 10 year is now at 4.01% and up +1 bp from this time yesterday.
EQUITIES RISE, EXCEPT IN PRC
Wall Street rose again today, but lost a little altitude at the end with the S&P500 up +1.1% at the close. Tokyo has opened up +0.7%. Hong Kong is down -0.9% and Shanghai is down -0.4% in their early trade. The ASX200 is up +0.5% in early afternoon trade. The NZX50 is up +0.6% in late trade.
GOLD HOLDS
In early Asian trade, gold is at US$1653/oz and up +US$2 from this time yesterday.
NZD FIRMS
The Kiwi dollar has firmed +½c from this time yesterday to be just on 57 USc. Against the AUD we are up at 90.1 AUc. Against the euro we are also firmish at 57.8 euro cents. That all means our TWI-5 is at 67.6 and up +40 bps from this time yesterday.
BITCOIN SOFTENS WITH LOW VOLATILITY
Bitcoin is firmer today, now at US$19,320 and down -1.2% this time yesterday. Volatility over the past 24 hours has been modest at just over +/- 1.5%.
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