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
Nothing changed today, again.
TERM DEPOSIT RATE CHANGES
TSB raised its one year rate to 5% and now they offer that for all terms to five years. Kiwibank also raised rates, but not to that level for 1 year. For 6 months they have matched TSB and BNZ at 4%.
STILL WANT TO SKI AT RUAPEHU?
MBIE asked the Administrators of Ruapehu Alpine Lifts, PwC to formally survey the approximately 14,500 Life Pass Holders to gauge their willingness to financially support a proposal for a new entity. With support, the Crown suggests it might tip in some additional support of their own. Without it, ski field operations on Mt Ruapehu are probably toast.
SOPROLE SOLD, PAYDAY AWAITS
Fonterra finally quits its Soprole business in Chile for about NZ$1 bln, and this will bring "a significant capital return to our shareholders and unitholders", they said.
TRACTOR SALES BACK AT 'NORMAL' LEVELS
There were 339 new tractors registered in October, +15% more than in the same month a year ago. But this just extends a volatile run. For the year to October, sales are up less than +5% and that year-on-year comparison is being trimmed as the months progress. But at least, prior to the pandemic, 339 was about the average for the prior five October months.
WORKERS HOLD THIER OWN
The latest national sector accounts that reveal wages ("compensation of employees") as a proportion of total economic activity ("GDP") shows that proportion at 43.9% and its highest since 2010. This is a record that goes back to 2003, and the highest was 44.3% in 2009. The lowest in that period was 40.3% in 2003. This official data shows that employee's share of all economic activity is pretty stable, and has been inching up for many years now. It certainly hasn't been degrading in the way many armchair analysts assume.
WHO SAVED, WHO DIDN'T
The same data release reveals the 2021 national savings rate. For households it was 8.9%, the highest ever recorded in a record that goes back to 1987. Total national savings in that year were +$20.0 bln, made up of +$15.6 bln by businesses*, +$2.1 bln by banks, +$2.1 bls by the not-for-profit sector*, +17.8 by households* - and dis-saving by central government* of -$17.6 bln. Those marked with a * were the most ever (or least-ever in the case of Wellington).
BOOTS FILLED
BNZ's latest bond issue was a strong success, raising $600 mln for a 5.5 year term. The rate they will be paying for these new funds is 5.536% pa.
JAPANESE INFLATION JUMPS TO 30 YEAR HIGH
The CPI inflation rate in Japan climbed to 3.7% in October from 3.0% a month earlier. This was the highest reading since January 1991, and comes amid high prices for food and raw materials, as well as persistent yen weakness.
LOG IN STILL AN ISSUE
We still have a known issue for readers logging in via Press Patron, which affects ad-free access. We are working on a fix, although don't have a resolution yet although we do hope to have it working again over the weekend. Apologies.
SWAP RATES SHIFT FIRMER
Wholesale swap rates may be slightly firmer today, but the real action comes near the close. Our chart will record the final positions. The 90 day bank bill rate is up +4 bps at 4.20%. The Australian 10 year bond yield is now at 3.66% and little-changed. The China 10 year bond rate has slipped to 2.83% and down -2 bps. The NZ Government 10 year bond rate is now at 4.23%, and up +5 bps and now well above the RBNZ fix for the NZGB 10 year which is up +3 bps at 4.16%. The UST 10 year is now at 3.77% and up +4 bps from this time yesterday.
EQUITIES LACKLUSTER
The S&P500 ended its Thursday trade down -0.3% after being under water all session. At least it finished with its smallest retreat of the day and is now down -1.7% for the week so far. Tokyo has opened up +0.2% and heading for a -1.1% weekly retreat. But Hong Kong has opened up +0.9% which would be most their +1.2% weekly rise if it holds. Shanghai has opened down -0.3% and little-changed for the week so far. The ASX200 is up +0.2% in early afternoon trade, and also heading for an unchanged week. The NZX50 is up +0.6% and will probably finish the week up +0.4%, the 'best' of the equity markets we follow (although it is not a high bar this week).
GOLD STAYS FIRM
In early Asian trade, gold is at US$1764/oz and down -US$3 from this time yesterday. It's been hovering at this level for basically two years now.
NZD A LITTLE FIRMER
The Kiwi dollar is marginally higher than this time yesterday at 61.6 USc. Against the AUD we are up strongly at 91.9 AUc. Against the euro we are slightly firmer at 59.4 euro cents. That all means our TWI-5 is now at 70.5 and up +30 bps from this time yesterday.
BITCOIN ACTION MODEST
Bitcoin is now at US$16,856 and up +1.2% from this time yesterday. Volatility over the past 24 hours has remained modest at just over +/- 1.7%.
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46 Comments
TSB now has the predicted flat 1-5 (curve) on TDs. Looks like 5 is the magic number. Over on the NZX the MFB slow motion train wreck continues, market cap now near 100m, down from the ridiculous 400m float. With mortgages at 6.5% next year and high cost of living, this discretionary product has little to look forward to in 2023. The marketing and float of this company was carried out to perfection (by the owners) TG and NL sitting pretty.
Over on the NZX the MFB slow motion train wreck continues, market cap now near 100m, down from the ridiculous 400m float
Down approx 70% from ATHs. A little like ol' ratty.
But let's be real, what is the attraction of MFB as a business in a mkt with high cost structures and a relatively low addressable market? Never made any sense to me no matter how good the actul menus appeared.
I take the following lessons from it all: 1) Don't make real bids for companies if you are not sure you want to go through with the purchase. 2) When pricing a bid for a company, do it based on real value, not an immature inside joke about weed. 3) It always pays to ease yourself into a management role in a new company, firing half the organization in the first week rarely ends well.
That summary kind of misses the point, though. There are plenty of muppets around who aren't being vilified for it. Musk's crime was to champion free speech, which is an absolutely unacceptable position to take according to those who want to impose Soviet-era censorship on a global scale. To quote Prime Minister Ardern:
Unless you hear it from us, it is not the truth. Dismiss anything else. We will continue to be your single source of truth.
This official data shows that employee's share of all economic activity is pretty stable, and has been inching up for many years now. It certainly hasn't been degrading in the way many armchair analysts assume.
The problem is productive GDP growth is poor and non-GDP qualifying bank financed residential property speculation has skyrocketed the price of assets.
Private foreigners have purchased just over half a trillion - yes, Trillion - LT USTs in the past six months (sorry, no #brettonwoods3) Why such huge demand for safe, liquid US$ instruments? Not a whole lot of trust for the Fed's toolkit and use. https://youtube.com/watch?v=ChSlwy
When we are all young and naive, we perhaps buy a "Life Pass" to something, only to find out down the track what that means.
Me? I bought a Qantas Lifetime Pass to the world-wide corporate lounges (a big thing, back when! A thousand buck off my Class 2 Expenses as I recall. Ah, Class 2's. (sniff) Before the days of Fringe Benefits Tax) and today when I whip out the faded piece of plastic I just get a stare and a "I'm sorry sir, that's not valid any more"
Wow this is going to take some beating.....
Remarkably, among the assets listed in the document was $4.1bn of related party loans extended by Alameda, $3.3bn of which was to Bankman-Fried both personally and to an entity he controlled. Bankman-Fried previously said that FTX had “accidentally” given $8bn of FTX customer funds to Alameda.
"WORKERS HOLD THIER OWN"
Interest.co.nz from time to time suggests that worker income is doing OK because it's holding it's share of GDP. The problem is that incomes have not been holding relative to asset prices, encouraging those not receiving asset inflation windfalls to give up or leave.
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