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
Heartland raised its fixed home loan rates today.
TERM DEPOSIT RATE CHANGES
No changes here today. Update: ANZ has moved its term deposit offers to the top of the range for large NZ banks. More here.
TURNING UP?
After four consecutive quarters of downward trend, overall business credit demand was up +3.2% year-on-year in the September quarter, according to credit bureau Equifax. Business credit demand has been relatively soft since the August 2021 lockdown, however commercial lending appetite has been steadily improving since the start of 2022 and is slowly nudging towards pre-pandemic levels. Business loan enquiries decreased by -3.8% (vs September 2021 quarter). Trade credit enquiries increased by +9.9%). Asset finance enquiries up by +2.3%.
"RESILIENT SOLVENCY"
The 2022 Bank Solvency Stress Tests by the RBNZ found the local banking sector is well placed to withstand a ‘stagflation’ scenario where high inflation is paired with negative economic growth. "Our annual stress testing programme enables us and banks to better understand the implications of current and emerging risks to bank balance sheets and overall financial stability by investigating severe, but plausible scenarios", the regulator says.
HOUSING DEBT RISES SLOWER, BUSINESS DEBT FASTER
RBNZ data shows that housing debt rose its slowest since June 2015 (but matching early 2018 levels), up just +5.7% year on year (and rising slower than CPI inflation). It is up at just +3.3% at an annualised rate in September from August. In contract. lending to businesses rose at an +8.9% rate from a year ago and at a rising +15% pa pace since August. More here.
TINY RENT RISE
Barfoot & Thompson recorded an average rent growth of just +3.3% in the year to September in Auckland, a rise of just +$20/week. This is not only much lower than inflation, but also far less than the rise in mortgage interest rates. Landlords have lost their pricing power in the Queen City.
HOUSEHOLD DEPOSITS GROW FASTER
RBNZ data also shows that household deposits rose +7.6% from a year ago, although only at a +6% pace in September from August. Term deposit growth was very much faster, up +21% from a year ago, and maintaining that pace in September from August.
INFLATING I
Australian retail sales rose more than expected, and that is the 9th month in a row of gains. However, almost all of the recent monthly gains are likely due to higher prices rather than volumes. Fashion and dining led the uptick. But year-on-year the gain was more than +17%, mainly because of a very weak base.
INFLATING II
Japanese retail sales rose by 4.5% in September 2022, compared with an expected +4.1%. This was the seventh straight month of increase in retail trade and the steepest pace since May 2021, and interestingly higher than CPI inflation.
SIGNIFICANT PRICE RETREAT
Iron ore prices hit their lowest level since early 2020 at near US$80/tonne as hopes fade of a rebound in Chinese steel demand, and supply of the raw material picks up.
OVERSUPPLY SHRINKS MARGINS
Also falling is the price of infant formula in China. A major Aussie supplier, Bubs, says a significant number of brands there have oversupplied that market, including local Chinese brands, which has created a major decline in margin across all channels.
SWAP RATES LITTLE CHANGED
Wholesale swap rates may be little-changed, possibly firmer. Our chart will record the final positions. The 90 day bank bill rate is up +4 bps at 4.10%. The Australian 10 year bond yield is now at 3.78% and unchanged so far. The China 10 year bond rate is down -3 bps at 2.66% and back near the lows of August. The NZ Government 10 year bond rate is now at 4.27%, and down -3 bps from this morning and because of some internal issues at the RBNZ, their data was late, but the 10 year was up +4 bps to 4.26%. The UST 10 year is now at 4.05% and up +4 bps from this morning.
EQUITIES UP EXCEPT IN CHINA
After last week's strong +3.2% rise in capitalisation value, the NZX50 is adding another +1.0% to that today. Pushpay, Kiwi Property, SkyCity and Fletcher Building are all leading the rises. The ASX200 is +0.6% in early afternoon trade. Tokyo is up +1.2% in early Monday trade. Hong Kong has started the week down another -1.2% in an extension of their rugged recent trend. Shanghai is down another -0.8%. The S&P500 futures suggests Wall Street might open slightly soft.
GOLD SLIPS SLIGHTLY
In early Asian trade, gold is at US$1641/oz and down -US$5 from this morning.
NZD LITTLE-CHANGED
The Kiwi dollar is unchanged at 58.1 USc. Against the AUD we are marginally softer at 90.5 AUc. Against the euro we unchanged at 58.3 euro cents. That all means our TWI-5 is at 68.4 and also little-changed.
BITCOIN DIPS
Bitcoin is little-changed today, now at US$20,558 and down a mere -0.3% from this morning's open. Volatility over the past 24 hours has been low at just under +/- 1.0%.
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39 Comments
Also today, Elon makes a real twit of himself - time to vote with your feet folks. Delete your account using #goodbyetwit to let all your followers/friends know.
He's probably just cleansing the platform of those infected with the "Woke Mind Virus".
I'm not sure it's a good idea to advertise to all your followers and friends that you get butthurt (forgive the pun) about minor internet antics.
But thanks for letting us know.
The always tolerant left know there's nothing wrong with being gay or being a prostitute or even being both right?
The series of minor internet antics that led to someone breaking into Nanci Pelosi's house? Or the misinformation that Elon Musk, who is one of the most influential people on the planet sent out into the world without taking a minute to check to see if it was true, which effectively defamed the victim of the previous crime?
Would you be happy if Elon tweeted to the world that you (named and pictured) picked up a gay prostitute the other night? When in fact some guy broke into your home, assaulted you and held you hostage?
It is nothing to do with tolerance or wokeness.
They can ban whoever they want from their platform. I guess there has been a left wing bias, hence the craziest of the crazies on the right setting up their own platforms.
Now musk is in charge maybe the pendulum will swing the other way and we'll see competing explicitly left wing platforms for their crazies?
RBNZ data shows that housing debt rose its slowest since June 2015 (but matching early 2018 levels), up just +5.7% year on year (and rising slower than CPI inflation). It is up at just +3.3% at an annualised rate in September from August.
And yet due to favourable risk weighted capital levels applicable to residential property bank lending (housing) this sector accounted for 61.24% of all lending according to C5 Sep 22 data. Basically unchanged from previous months and recent years.
Have you had a look at their discussion paper on risk weighting?
https://www.rbnz.govt.nz/have-your-say/risk-weights
Seems they missed addressing what really matters.
This is where we find out, the economy and markets at their crucial junctures. Recession or not.
GDP and the unemployment rate look like one thing, but those numbers are looking back at what happened. More and more it appears as if the US and global economy tumbled rather than stabilized as last quarter ended. Not surprisingly, the yield curve weighs in very strongly on one side.
why do people suggest that the government stealing more of societies money is a good solution to any problem?
while I have no love for the banks, taxation is not the solution. unless you like to live in a communist state where the government owns everything, that is.
Because the government maintains the systems and institutions that allow society to function and some people are insistent on taking more than their fair share. If they are allowed to do this wealth gets increasingly concentrated in the hands of very few.
This erodes the fabric of society and the social contract and you get things like people dying in A&E because healthcare is underfunded, potholes smashing up your car, massive corruption as there is no regulatory oversight, degradation of our living environment and ram-raids by disenfranchised youth.
Pretty simple really, I wish they taught history and political theory in schools instead of focusing on churning out kids ready to be inducted into "productive work"
Libertarians who believe their governments are useless should move to sub-Saharan Africa with their businesses and see how many days they last without the institutions, infrastructure and regulatory regimes that good governance brings.
I understand no Western democratic governments is perfect but calling all tax theft is just plain stupid when your livelihood thrives in an environment that the government has created.p and maintained.
But it worked so well before! https://www.vice.com/en/article/bn53b3/atlas-mugged-922-v21n10
Which NZ bank was bailed out? Which Bank would be bailed out in the future? None. Absolute envy tax on shareholders. That’s who you are proposing stealing the wealth from. Anyway Robertson said it’s not on the agenda. Mind you he lies a lot as does Ardern. Worst PM and Government in living memory
https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-banks/…
When the next bank failure happens in New Zealand it will be bailed out by depositors, theres already a law defining what will happen.
Also falling is the price of infant formula in China. A major Aussie supplier, Bubs, says a significant number of brands there have oversupplied that market, including local Chinese brands, which has created a major decline in margin across all channels.
Bubs has only just realized that the way to win in China is to actually be in bricks and mortar and local ecommerce. They've been riding their luck so far. Best they can hope for is a niche piece of the pie. Launching and building market share in the China mkt is high cost now, particularly of you want talent.
Was reading article here on the weekend on ANZ, saying they are in a very strong position and dont need to match the market with deposit rates. If they are in such good shape, why are their mortgage rates the highest??? Also interesting that the Aussie CEO seems to be telling ANZ NZ where to set their TD rates.
Barfoot & Thompson recorded an average rent growth of just +3.3% in the year to September in Auckland, a rise of just +$20/week. This is not only much lower than inflation, but also far less than the rise in mortgage interest rates.
Good, ideally domestic inflation would be falling to offset imported inflation in other areas but I'll take a limited rise.
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