A review of things you need to know before you sign off on Wednesday; many big retail rate increases, business sentiment drops, farm sales slump, new housing supply jumps, swaps fall and flatten, NZD stable, & 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
ASB, BNZ and HSBC all raised fixed rates today. More here. So did WBS (Wairarapa Building Society) and the Heretaunga Building Society.

TERM DEPOSIT RATE CHANGES
ASB and HSBC also raised term deposit rates. (ASB has joined Kiwibank in offering a 4.5% one year TD rate.) They were joined by the Cooperative Bank and Heretaunga Building Society in raising rates. BNZ has raised its savings account rates.

LOWER ACTIVITY & HIGHER COSTS
The latest ANZ Business Outlook Survey for October shows a drop in business confidence, and a drop in activity levels - but inflation expectations have risen again. 'Inflation pressures remain intense' they report.

FARM SALES SLUMP
The REINZ is reporting a sales slump for farm sales in September. There were 109 fewer farm sales (-39%) for the three months ended September 2022 than for the three months ended September 2021. The median price per hectare for all farms sold in the three months to September 2022 was $23,080 compared to $30,890 recorded for the three months ended September 2021. That is -25% lower.

LIFESTYLE BLOCK SALES RETREAT TOO
Lifestyle block sales are falling too. 130 fewer lifestyle property sales (-9%) for the three months ended September 2022 than for the three months ended August 2022. There was no early spring bounce in this market segment.

A SHARP IMPROVEMENT
There has been a significant uplift in the supply of new housing compared to demand. The supply of new housing has exceeded population-driven demand by almost 60,000 homes over the last two years.

HIGHER INTEREST RATES BITE
Mortgage interest costs rose 39% for Kiwi households in the past year, according to Statistics NZ. They say annual inflation for households was 7.7% in the year to September, fueled by housing and food costs.

FAR HIGHER FAR EARLIER THAN EXPECTED
The Australian CPI inflation rate climbed more than expected to 7.3% in Q3 from 6.1% in Q2, above market forecasts of 6.9%. This was the highest level since Q2 1990, boosted by higher prices for new housing construction, automotive fuel, and food. Prices for food rose the most since Q4 1983, up 9.0%. The RBA looks like it has called this completely wrong, even if they do now see Aussie inflation peaking at 7.75%. Their cred is on the ropes.

ROYAL COMMISSION FALLOUT CONTINUES
In Australia, their Federal Court has ordered ANZ to pay a AU$25 mln penalty for failing to provide certain benefits it had agreed to give customers with offset transaction accounts or under a ‘Breakfree’ package. And in another Federal Court win for ASIC, Australia’s largest stockbroker, Commonwealth Bank-owned CommSec, will pay a AU$20 mln fine after it was judged it had broken the law when it over-charged customers on more than 120,000 occasions to the tune of about $4.3 mln.

SWAP RATES FALL & FLATTEN
Wholesale swap rates may be flattening today with small falls at the short end and larger falls at the long end. The key real action comes near the close however. Our chart will record the final positions. The 90 day bank bill rate is unchanged at 4.13%. The Australian 10 year bond yield is now at 3.97% and down -14 bps extending their retreat. The China 10 year bond rate is unchanged at 2.74%. The NZ Government 10 year bond rate is now at 4.56%, and down -4 bps and now marginally above the earlier RBNZ fix for this bond at 4.59% which was down -10 bps from this time Friday. The UST 10 year is now at 4.09% and down -12 bps from this time yesterday.

EQUITIES ALL RISE
Wall Street ended their Tuesday session with another positive tone with the S&P500 up another +1.6%. Tokyo has started today up +1.1% and building on yesterday's rise. Hong Kong has clawed back +1.3% of the Monday/Tuesday rout, in early trade today. Shanghai is doing the same, up +0.6% to grap back a small amount lost earlier. The ASX200 is up another +0.3%, handicapped by the China links of many of their listed companies. The NZX50 is far less exposed, and is up another +0.7% in late Wednesday trade.

GOLD STABLE
In early Asian trade, gold is at US$1654/oz and up +US$4 from this time yesterday.

NZD HOLDS
The Kiwi dollar is nearly +½c firmer from this time yesterday at just on 57.4 USc. Against the AUD we are only marginally softer at 90 AUc after dipping sharply on the Aussie CPI news. Against the euro we are little-changed at 57.7 euro cents. That all means our TWI-5 is at 67.7 and also little-changed.

BITCOIN JUMPS
Bitcoin is much firmer today, now at US$20,204 up +US$943 in a day representing a +4.9% rise from this time yesterday. Volatility over the past 24 hours has been high at just over +/- 3.0%.

This soil moisture chart is animated here.

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