A review of things you need to know before you sign off on Thursday; no bank has passed on the OCR hike yet; FHBs keep the mortgage market alive, farm sales dire, more FLP taken, swaps settle, NZD firm, & 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
As we write this, no bank has yet changed its floating mortgage rates in response to the RBNZ +75 bps hike in the OCR. But Heartland Bank did raise its 1, 2 and 3 year fixed rates by a bit more than +10 bps year.

TERM DEPOSIT RATE CHANGES
Finance Direct raised its 18 month TD rate to 7.75%. And ASB raised its 36 month rate to 5.10% which is higher than any other bank for that term. It also raised most of its other rates from 6 months to 5 years to either match or just edge its main rivals for these terms. Cop-operative bank also raised TD rates, as did Xceda Finance.

SAVINGS ACCOUNT RATE CHANGES
So far only brokers with cash management accounts have raised their rate. This includes Jarden's Direct Broking and Forsyth Barr

FHBs TAKE A RECORD SHARE OF HOME LOANS IN OCTOBER
Banks made just under $5.6 bln in new mortgage commitments in October, up nearly +9% from September, but down a very sharp -27% a year ago. The share of new mortgage commitments to first home buyers increased to a record high of 21.8%, a full percentage point higher than the previous record high of 20.8% recorded in August of this year. The share of new commitments to other owner occupiers decreased from 62.5% to 60.5%. The share to investors increased from 15.8% in September to 16.3%. More here.

FARM SALES LOW. AGENTS BITTER ABOUT THE SITUATION
The REINZ is headlining the "tension" in the rural farm sales markets in October. They report a "large surge" of farm properties for sale, but that transactions completed remained very low in October after the -50% fall in September. November is usually a strong sales month, but there was no indication in the REINZ report that this will materialise, although the hope is there. Agent frustration is evident in the tone of this Report. If it wasn't for good sales in Southland, the situation would have been more dire. "On the positive side, extended periods of rain over much of the country is providing great conditions for spring grass growth and crop emergence, which is really pleasing for those on the land."

NO SPRING IN LIFESTYLE BLOCK MARKET
Agents are unhappy with sales volumes for lifestyle blocks as well, blaming rising interest rates on the fading interest in this segment. Sales data for the three-month period ending October reflects an inexorable easing in the volume of sales of lifestyle properties, down -28% from the equivalent period 12 months ago, and down -54% on the volume of sales achieved during the same period two years ago.

GOOD ON AVERAGE, BUT FAR FROM SATISFACTORY
The Treasury today released its first "big picture" overview of wellbeing in New Zealand. The report draws on the Treasury’s Living Standards Framework and He Ara Waiora, a framework that helps the Treasury to understand waiora (life), often translated as a Māori perspective on wellbeing. Overall, the report tells us that we are healthier, better off and safer than previous generations. Compared to many other developed countries, New Zealand is a good place to live, the report concludes. "However, there are areas where we do not perform as well as other developed nations, areas where we are doing worse over time and there are differences in wellbeing within Aotearoa New Zealand. One of the most striking insights is that our younger people fare less well on many measures than older people. In particular, higher levels of psychological distress and declining educational achievement for younger generations raise risks for wellbeing across their own lives and future generations. The young are also more likely to be priced out of the housing market or to be renting poor quality homes."

ALCOHOL USE SLIPS
New data shows that after peaking in 2011, national alcohol consumption flatlined in absolute terms until the start of the pandemic. It then rose sharply over the subsequent year, and has now started to fall back. But it has fallen on a per capita basis since 2011. It's no longer our drug of choice, legal as it may be. The data doesn't show the damage it does however, just the volumes the alcohol industry distributes into the community.

STILL ACCESSING 4.25% FUNDING
Speaking of drugs (!) another bank helped itself to $170 mln yesterday to the 3 year funding in RBNZ's Funding for Lending program. It's likely to be by a challenger bank. They are paying 4.25% pa for that. The total FLP disbursed is now $18.7 bln. There are only two or three weeks left until this program closes its access window.

NZGB BOND BIDDING EXTREMES
Treasury tendered three tranches of bonds today and all three delivered unusual results. The $200 mln April 2025 only got $200 mln in bids so all 19 were accepted. The average yield was 4.59% pa, compared to 4.52% two weeks ago. Treasury will be nervous if they can't get away any specific tranche. The other extreme was evident for the $150 mln May 2032 offered. It drew $609 mln in bids but only one bidder won all of it at 4.13%. That was down from 4.43% two weeks ago. They were unusually keen. There was a very keen bidder for the $50 mln April 2037 offer too. That one bidder won it all, leaving the other 23 without anything. They got this at a yield of 4.32%, down from 4.66% two weeks ago.

SWAP RATE SETTLE OUT
Wholesale swap rates were sharply higher yesterday, but today may have settled slightly lower. The real action comes near the close as market participants continue adjust for the hawkish RBNZ views of what is to come. Our chart will record the final positions. The 90 day bank bill rate is up +7 bps at 4.39%, although most of this reflects a surge yesterday after the RBNZ MPS. The Australian 10 year bond yield is now at 3.56% and down -2 bps. The China 10 year bond rate is at 2.81% and down -3 bps. The NZ Government 10 year bond rate is now at 4.17%, down -10 bps and now below the RBNZ fix for the NZGB 10 year which is up +9 bps at 4.20% (also mostly a 'yesterday' effect). The UST 10 year is now at 3.69% and down another -7 bps from this time yesterday.

EQUITIES RISE
The S&P500 ended its Wednesday session up +0.6% in New York today in an extended set of gains. Tokyo has opened up +1.3% today, and Hong Kong is up +0.6% at their open. Shanghai has opened up +0.3%. The ASX200 is up +0.3% in afternoon trade, but the NZX50 is down -0.3% in late trade.

GOLD FIRMS
In early Asian trade, gold is at US$1754/oz and up +US$14 from this time yesterday.

NZD FIRMER
The Kiwi dollar has surged +1c and is now at 62.5 USc after the outsized OCR hike. Against the AUD we are holding firm at 92.7 AUc. Against the euro we are still up at 60 euro cents. That all means our TWI-5 is now at 71.2 and up another +30 bps from this time yesterday.

BITCOIN FIRMS
Bitcoin is now at US$16,551 and up +2.2% from where we were this time yesterday, a second day of gains. Volatility over the past 24 hours has been modest at just over +/- 1.6%.

This soil moisture chart is animated here.

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