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
TSB, SBS Bank and the Cooperative Bank all raised their fixed rates today.
TERM DEPOSIT RATE CHANGES
Rabobank raised many TD rates today. But the big news is SBS Bank's 5% for one year offer. More here. Both BNZ and Westpac have also raised some rates as well.
A NEW FEE-FREE CREDIT CARD
Westpac is now offering a zero-fee Mastercard credit card. That means no annual fee, no foreign currency fees, no late payment fees and no replacement card fee. It also comes with a 0% balance transfer rate for six months. They suggest it could be useful for people who use BuyNow, Pay Later plans for these transactions. After the balance transfer period, the card will apply a 12.9% pa rate for purchases not settled within the payment due date, and 19.95% pa for cash advances.
SUPER PROFITS
ANZ has posted an enormous tax paid profit for the year to September 2022 of $2.3 bln. That's up +20% in New Zealand, helping the ANZ Group report a +5% rise. Opinion: Kiwis could be justified for feeling taken advantage of by this result, especially as the RBNZ, which rescued the financial system, is now unable to pay any dividend to Treasury, a key action that enabled ANZ to rake in the excess profits. And ANZ's profit "rounding error" - the $300 mln of their $2.3 bln - is actually more than double Kiwibank's total annual profit of $131 mln, tax-paid. With every announcement, the big banks suggest rising profits are unlikely to be repeated - and then of course they are. (True to form, Shayne Elliott warned today of "testing times" ahead.) ASB has already posted a record result (to June). BNZ is probably going to as well soon, you would think (see this tracking). Westpac is the only one 'struggling'. It has profits at almost $1 bln, but they are far from being a record for them. ANZ's ROE? - its probably above 13% on a tax-paid basis. And see this.
HOT DEMAND I
Auckland International Airport (AIA, #3) raised the full $225 mln in its recent 5 year bond offer. The interest rate for these A- rated bonds is 5.67% pa being the five year swap rate plus the margin of +0.95% which was at the bottom of the range indicated when the offer was floated.
HOT DEMAND II - NZGB INVESTORS BID YIELDS DOWN
Treasury offered $400 mln in three separate bond tenders today, and investors stumped up almost $1.5 bln in bids. The $200 mln April 2025 bond was the least in demand only getting $289 mln in bids from 31 bidders. 26 bidders won some of it at an average yield of 4.39%, little-changed from the 4.89% two weeks ago. The $150 mln for the May 2032 bond was wildly popular, garnering $945 mln in bids. Only 9 bidders won anything with 63 bidders missing out. The winners got a 4.32% yield which was down from 4.51% two weeks ago. The final $50 mln got $232 mln in bids for the May 2041 issue, with 10 of 39 bidders getting a yield of 4.67%, down from 4.89% two weeks ago.
FOR ADVISERS & FUND MANAGERS
A note from our friends at ResearchIP: It has been a demanding year, to say the least. Financial advisers and fund managers have had to work overtime to show value for money amidst a brutal market environment. Have your say in Research IP’s Adviser and Investor Choice Awards.
A LITTLE EXTRA NIBBLE
One bank drew down $82 mln from the Funding for Lending facility yesterday (D12). The total drawn by all banks is now a whisker under $16 bln.
THE BITE GETS HARDER
The RBNZ's mortgage reconciliation data shows that the September quarter brought the lowest loan drawdowns since June 2019 (ignoring the Q2 2020 lockdown period). At the same time, borrowers paid the most in interest ever, more than $1 bln per month as the combination of higher balances and higher rates started to bite. So far, "payment deficiencies" remain low according to this C35 data. More here.
SWAP RATES FALL AGAIN
Wholesale swap rates may be falling quite sharply today and across the board, following global moves. The key real action comes near the close however. Our chart will record the final positions. The 90 day bank bill rate is down -4 bps at 4.09%. The Australian 10 year bond yield is now at 3.86% and down -11 bps extending their retreat. The China 10 year bond rate is little-changed at 2.73%. The NZ Government 10 year bond rate is now at 4.43%, and down -13 bps and now marginally above the earlier RBNZ fix for this bond at 4.36% which was down -12 bps from this time yesterday. The UST 10 year is now at 4.01% and down another -8 bps from this time yesterday.
EQUITIES MIXED
Wall Street ended their Wednesday session with the S&P500 retreating -0.7% but still leaving the week up +2.1%. Tokyo has started today little-changed. Hong Kong has roared back today, up +3.1% in early trade. That puts them only -2.8% below where the week started. Shanghai is up +0.5% in early trade today. The ASX200 is up another +0.6% and the NZX50 is up +0.2% in late Thursday trade.
GOLD FIRM
In early Asian trade, gold is at US$1668/oz and up +US$14 from this time yesterday.
NZD HOLDS
The Kiwi dollar is unchanged from this time yesterday at just on 57.4 USc. Against the AUD we are also unchanged at 90 AUc. Against the euro we are firm at 58 euro cents. That all means our TWI-5 is at 68.3 and up more than +50 bps.
BITCOIN FIRMER
Bitcoin is much firmer today, now at US$20,798 and up another +2.9% rise from this time yesterday. Volatility over the past 24 hours has been high at just over +/- 2.2%.
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45 Comments
5% 1 yr TD breached today. I still predict the big 4 will hit the 5% 1yr in dec. The big 4 are dragging the chain a bit for savers, most having a 30% to 50% margin between thier TD and Mortgage rate. I suspect they are waiting a bit longer for more of their 2 and 3% mortgages to roll over in the next 6 months, and of course the FLP. They will however be paying 5% for the FLP next year, which should bring some fairness back for the savers. Well done TSB, SBS, and Rabo.
5% 1 yr TD breached today
Which is higher than the Smartshares NZ Dividend ETF at <5% after fees.
https://smartshares.co.nz/types-of-funds/new-zealand-shares/nz-dividend
"ANZ Group report a +5% rise. Opinion: Kiwis could be justified for feeling taken advantage of by this result"
Perhaps now is the time that they could have their capital adequacy ratios reigned in? Remove the capacity for them to determine their own loan-book Risk Weightings, and have them determined by the RBNZ, and universally applied across the industry. In essence, they don't hold enough capital to back the loans they have dished out.
Many Kiwis resent successful businesses. In fact, they resent anybody who is successful. Guaranteed if the Greens get in with Labour next time we will have a wealth tax, and the successful people will leave for Australia and take their money with them. We will be left with beneficiaries, and a middle class forced to pay the wealth tax with a one million dollar threshold on the family home and any savings that is proposed by the greens.
I have been with ANZ for many years. During the last financial crisis I was grateful that the bank was well-capitalised enough to weather the storm, unlike many banks worldwide that went under, taking their depositors with them.
Which is why the government sneaked through the legislation just before the last Xmas break that set up the mechanism that empowered the IRD to be able to enquire into, record and monitor the assets of each & every New Zealander. A doomsday book as conceived in the eleventh century by King William 1. Oh yes there is a threshold attached for the moment to trigger such enquiry, but it can be lowered at a moment’s notice and the system is there in place, all ready to go.
Success is always better if there is mutual gain for other people around you as well.
My experience with property investment as a popular way of achieving 'success' is that it creates the grounds for wide spread economic harm that impacts everyone negatively in the longer term.
As was the case when I live in the US during the GFC - and what it appears that we are walking towards right now in NZ.
Landlording used to be acceptable, because not everyone wants to, or is capable of the ownership and upkeep of a property.
Now it's viewed as a highly partisan undertaking, it's members guilty of class warfare and perpetuating some sort of crime.
Likewise employing people, anyone doing so has even more of a profit imperative than a landlord. People can't not feel hard done by someone supposedly profiting from them.
End of the day, despite all the technology and civilisation, it's still a jungle. You've got to work out how to get the berries while avoiding peril. A site like this should be a place to teach people how to do that, instead a large amount of the village want to complain about how mean the tigers are.
It's a sad story and all but just getting miffed about it's good for f all.
The Kiwi dollar is unchanged from this time yesterday at just on 57.4 USc, Possibly this
Big rebound in CNY - but not for any good reason - while demand destruction finally arrives in US.
After falling as low as 7.30 to the dollar yesterday, this morning "someone" was selling big dollars in Hong Kong (offshore CNH). It's another way of saying de-hoarding private dollar reserves, essentially the same tactic beleaguered officials have been forced into around the world. Why? For one, the darkening outlines of global recession are being drawn much clearer using the ink of gross American demand destruction.
https://www.tradingview.com/x/xf7iDKZZ/
So how about that HiGh VolATiLiTy on Bitcoin... nice 20% move on Meta there.
Stocks trade worse than shitcoins lolol.
Fascinating news Gally was the short liquidations across the crypto space on a 24-hour period (biggest in FTX's history). USD750 mio wiped out.
Degenerates betting against ol' ratty.
https://www.coindesk.com/markets/2022/10/26/crypto-markets-see-largest-…
Credit Suisse reports a net loss of CHF4 billion -- 8x estimates of CHF500 million.
https://www.cnbc.com/2022/10/27/credit-suisse-results-and-strategy-q3-2…
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