A review of things you need to know before you sign off on Wednesday; only minor retail rates changes, major labour market changes, housing market falls again, RBNZ addresses stability, swaps up, NZD firmer, & 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
The Bank of Baroda raised their mortgage rates today. And Credit Union Auckland has raised its floating rate.

TERM DEPOSIT RATE CHANGES
The Bank of Baroda raised TD rates too. And the Cooperative Bank did as well with a 3.80% six month rate and 4.55% for one year. And NZCU Auckland raised their rates too.

DEEPLY EMBEDDED
Statistics New Zealand says our jobless rate has remained at 3.3%. But an unexpected number of extra people entered the labour market in Q3-2022 taking out participation rate to its highest level ever at 71.7%, and the employed rate up to 69.3%, also its highest ever (the data has been collated this way since 1986). Perhaps more importantly from an inflation-fighting perspective, private sector wage rise blew all forecasts out of the water - up +8.6% pa which could have big ramifications for interest rate rises. Inflation is very well embedded in the labour market and risks undermining low (ie target) inflation expectations.

A QUIET MONTH, AGAIN
Barfoot & Thompson suffers lowest October sales volumes since 2010, which suggests the Auckland housing market could be heading for a quiet summer. Sales volumes were down -23% from the same month a year ago, average prices were down -11% from the peak, and median prices were down -12% on the same basis.

SLIDING VALUES
The average value of all dwellings fell by almost -$13,000 in October from September CoreLogic says and nationally, home values are now -$79,000 lower than they were in March of 2022.

LOWER STILL IS NEEDED
In its latest Financial Stability Report the RBNZ made many very interesting points, and one key one is it said a continued decline in house prices 'remains desirable' for long term financial stability. It says house prices are still well above sustainable levels.

CLEANER CAR IMPORTS UP, DIRTY ONES DOWN
Car sales held up for new vehicles in October, aided by stronger demand by rental car companies (even if they aren't back to pre-pandemic levels). But sales of used imports are struggling now. Prior to the past six months, used imports exceeded new car imports for every month for the past 28 years. Now the tables have turned following regulatory restrictions on importing older, less fuel-efficient systems.

TRIPLE DIP
The dairy auction earlier today was a very weak one, taking prices back to levels not seen since March 2022. In USD terms the decline was -3.9%. In NZD terms it fell -6.6%. WMP demand was weak, but SMP demand was dire, with prices falling -8.5%. Collapsed Chinese foodservice demand as their lockdowns extend are behind these retreat, which also come as milk production levels slip worldwide. The combination of falling prices, sliding volumes, and a strong currency will all hurt a key component of our current account significantly. Also see this. Westpac is the first to trim its farmgate milk payout forecast.

WARNED, CASE DROPPED
The Commerce Commission has issued warnings to eight international freight forwarding companies that in the Commission’s view likely entered into cartel agreements with Mondiale Freight Services (Mondiale) or Oceanbridge Shipping (Oceanbridge) – in some cases with both – to not compete for customers. The warnings conclude the Commission’s investigation, which began in 2018, into allegations of anti-competitive conduct in New Zealand’s international freight forwarding industry. The companies who received warnings are 360 Logistics Group, Aqua Air Freight Services, C. H. Robinson Worldwide (NZ), Go Logistics, Kerry Logistics (Oceania), Mainstream Global, Ryders Customs and Forwarding, and Stellar International.

PAY LEVELS TO BE DECIDED BY UNIONS
The Fair Pay Agreements (FPA) Bill has been rushed into law, with the new bargaining system to take effect on 1 December 2022. Only unions can do the bargaining, and they will be committing employees that are not members of a union. Interestingly, there is now little incentive to join a union, and if that extends the long atrophy of union membership, it is likely that membership will be made compulsory. On the flip side, union membership may end up as being the domain of the hard-core adherents. New unintended consequences may be with us for some time on the labour front.

A BIT SAD IN AUSSIE
In Australia, residential building consent levels fell almost -6% in September from August, and are down -13% from a year ago. Meanwhile, lending for housing fell more than -8% in September from August and is down more than-18% year-on-year. Lending for commercial construction is down -33%. But non-residential building consents rose +3.7% in September and are down less than -2% year-on-year.

SWAP RATES FIRMER
Wholesale swap rates may possibly be a lot firmer again. NZGB yields certainly are again. Our chart will record the final positions. The 90 day bank bill rate is up another +2 bps at 4.16%. The Australian 10 year bond yield is now at 3.75% and down -8 bps. The China 10 year bond rate is up +3 bps at 2.69%. The NZ Government 10 year bond rate is now at 4.39%, and up another +8 bps from this time yesterday and now well above RBNZ fix for the NZGB 10 year which was up +5 at 4.31%. The UST 10 year is now at 4.02% and down -3 bps from this time yesterday.

EQUITIES MIXED
In New York, the S&P500 slipped another -0.4% today. Tokyo has again opened flat today. Hong Kong is down -0.4% after yesterday's rumour-fueled gain. Shanghai has opened up a mere +0.1%. The ASX200 is up +0.3% in early afternoon trade. The NZX50 is flat again in late trade.

GOLD FIRM
In early Asian trade, gold is at US$1650/oz and up +US$16 from this time yesterday.

NZD FIRMS FURTHER
The Kiwi dollar is a little firmer at 58.5 USc. Against the AUD we are nearly +½c higher than this time yesterday at 91.4 AUc. Against the euro we also up at 59.2 euro cents. That all means our TWI-5 is at 69.1 and a +30 bps rise.

BITCOIN LITTLE-CHANGED
Bitcoin is little-changed today, again, now at US$20,521 and up a tiny +0.2% from this time yesterday. Volatility over the past 24 hours has been low at just under +/- 0.8%.

This soil moisture chart is animated here.

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