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
ANZ changed its business loan and overdraft rates by +65 bps,
TERM DEPOSIT RATE CHANGES
ASB raised its FastSaver and other savings account rates today. The Cooperative Bank raised term deposit rates today.
CAR USERS GET REPRIEVE, BUT NOT TRUCKS
The Government has extended its petrol tax cut by two months, so that it will now end at the end of March. Public transport discounts will be extended similarly. But the discount in Road User Charges will end as scheduled on January 31, 2023.
RECORD SHORTFALL
The September current account deficit hit a record high of -7.9% of GDP. Statistics NZ said the country's deficit between what we received for exports and what we spent on imports was a record -$29.7 bln in the year to September.
RECORD LOW
Farmer confidence has fallen dramatically since last quarter and is now at the lowest level recorded in the 20-year history of the Rabobank survey. Government policy and rising farm input costs were the major concerns.
PRE-CHRISTMAS SPENDING IS UP
New figures released by Worldline NZ (ex-Paymark) show consumer spending in the third week before Christmas Day was higher than the same time last year, but spending patterns were mixed across merchant sectors and regions. Spending for big-ticket items is particularly slow, suggesting that while consumers are still spending freely, there is some holding off on purchases of those more expensive items this side of Christmas
MANIPULATION
The Financial Markets Authority has filed High Court civil proceedings against Kok Ding Cheng, an experienced retail investor based in Auckland, for alleged market manipulation of NZX-listed shares of Rua Bioscience Limited. The FMA and NZX were alerted to the case after ASB Securities had earlier reported potential concerns about his orders.
BAD WEATHER IS EXPENSIVE
The Insurance Council today reported that extreme weather-related claims spanning five events across July and August has reached 11,086 claims valued at $124 mln. This is a third more than original estimates. The running total for extreme weather events for 2022 currently stands at $335 mln, a new record.
CHOICE & CIRCUMSTANCE
The Treasury released a research paper today exploring "the distribution of advantage". The distribution of advantage and disadvantage typically results from the interplay between choice and circumstance, and the evidence base can only partly separate the two. This issue is particularly acute when considering patterns of advantage over the course of a person’s life. Circumstances and choices at one age can shape the circumstances and choices available at future ages, they observe.
ACCOUNTABILITY & RESPONSIBILITY
RBNZ Governor Adrian Orr and the central bank's Executive Leadership Team appeared at Parliament's Finance and Expenditure Committee hearing for their 2022 Annual Review today. This is what Orr said in his opening remarks. He told them banks need to take a long term view on their customer base 'because it is a lifetime of earnings they get off each customer', and are up for supporting them through a difficult patch.
A BIG JUMP IN UNEMPLOYMENT ON THE WAY
The Government presented its Half Year Economic & Fiscal Update today. It was a pretty benign view presented but it is now forecasting net debt to rise from $62 bln this year (17% of GDP) to $88 bln in 2024 (21% of GDP) before it falls from there. They also see our jobless rate rise from 3.3% to 5.5% in 2024. Given that there are 97,400 jobless now, that means it will rise by at least another 64,900 to 162,300 by 2024. The last time we had 162,000 people unemployed was in 1993 - although back then the labour force was much smaller. Still, this forecast says we are headed for a 30 year high jobless rate. Despite this, the government does seem to have started heeding concerns over high government spending and its influence on inflation, with a more pared back spending program coming.
HUGE DEPOSITS
The RBNZ reported that banks' Settlement Cash balances at the RBNZ (which earn at the OCR rate) touched $57.5 bln yesterday, matching the record high first seen on October 18, 2022.
SWAP RATES UNCHANGED
Wholesale swap rates were likely little-changed today. The real action comes near the close however. Our chart will record the final positions. The 90 day bank bill rate is up +1 bp at 4.52%. The Australian 10 year bond yield is now at 3.36% and down -5 bps from this time yesterday. The China 10 year bond rate is at 2.94% and unchanged. The NZ Government 10 year bond rate is now at 4.18%, and also unchanged and still well above the earlier RBNZ fix for the NZGB 10 year which was up +3 bps to 4.14%. The UST 10 year is now at 3.50% and down -10 bps from this time yesterday. All eyes are on tomorrow's US Fed decisions and policy changes.
EQUITIES STILL MOSTLY POSITIVE
Wall Street was risk-on today. The S&P500 ended its Tuesday session up another +0.7% but with a late sag. Tokyo has opened up +0.4%. Hong Kong has opened up +0.6% and Shanghai is down -0.1% at their open. The ASX200 is up +0.3% in early afternoon trade. The NZX50 is little-changed in late trade.
GOLD UP
In early Asian trade, gold is at US$1811/oz and up +US$28 from this time yesterday.
NZD FIRM
The Kiwi dollar is +½c firmer from this time yesterday, now at 64.5 USc. Against the AUD we are marginally softer at 94.4 AUc. Against the euro we are unchanged at 60.6 euro cents. That all means our TWI-5 is now up fractionally at 72.6.
BITCOIN FIRMS FURTHER
The bitcoin prices is up +3.6% to US$17,784. Volatility over the past 24 hours has been moderate at +/- 2.5%.
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50 Comments
Binance, the world's biggest crypto exchange, said on Tuesday it had "temporarily paused" withdrawals of the major stablecoin USDC.
It's all happening. Largest 24h flow of Bitcoin out of Binance ever (39,637 BTC). Imagine that happening with the ANZ.
https://www.reuters.com/technology/binance-halts-withdrawals-major-usdc…
Gee some guy on here said Bitcoin would go to Zero by Christmas, why the sudden panic LOL
Plenty of speculation about the price at the Xmas office parties. BTC still exists regardless if Binance ceases to exist. And it's being self custodied. This is a wonderful thing.
Isn't the whole idea of Bitcoin that it's not manipulated or diluted by central banks? I.e. excessive money printing is the root of all evil according to Crypto Bros.
In an "excessive money printing" environment such as FIAT today, why would ANZ or any other bank need to pause withdrawals? There's no shortage of money. Plus we're a sovereign currency nation, it's not like the banks will need to go to the European Central Bank to borrow more $NZD. Isn't it just 1's and 0's being transferred between spreadsheets?
In a normal banking environment the big four do not goto the RBNZ when rasing funds, they issue bonds or raise money in the EU or US and swap it back to NZD hedging the currency risk, hence the references to the swap curve pricing etc.
If things get ... tight.. RBNZ can inject money short term via repo, tighter still by things like FLP.
You are 100% right NZ banks cannot collapse and need to stay open so we can buy beers via eftpos, and pizza and perhaps groceries. Since we can print banks can always be saved, this will however trash the NZD, unless everyone else is doing it at the same time. At this time you want to own physical gold.
We've got a fair wee bit more than that. sitting in a call account. We're wanting reasonable access to our funds, in case something comes up on the property market maybe mid next-year (as despite the current 'crash', anything remotely desirable ain't budging, or BION still seems to be going up, like a K-shaped crash). Shares are generally underperforming - and being a long term investment, I'm staying away. Term Deposits attract full tax, so I'd look at a Term Pie, but still I'd need to lock away for 12mo to get anything reasonable, so interim I'm stuck with BNZ Rapid Saver.
Personally I do not think any of the banks well be put through OBR or BS11 unless things are really bad, as in China/Taiwan war bad.
Firstly, once you haircut one bank the other 3 collapse, why , any bank thats been through OBR is now in SM, so its safe, anyone holding funds in the other 3 move to that bank... Why would they ever collapse all four?
Secondly, SM one bank and the cost of funding goes through the roof for the other 3, mmm
Thirdly, RBNZ has and can print some more, and will. They will go down the path of equity injection to wipe out existing shareholders but give themselves something to sell down the path... it works for the UK.
Fourthly, BS11 is a rocket ship that no one wants to take the first trip on. It was not put together by SpaceX, its more..... Soviet in nature. First bank to have BS11 applied causes same issues as noted in points 1 and 2 above.
How could farmer be glum.
Best pay out in years.
The greed of going to big maybe the real issue here they are working for the banks.
But as the bank have run around saying over the last ten years there no money in farming but there is money in land buy all you like how much money would you like.
I guess they are Caught in the Ponzi too.
Perhaps they are glum for several reasons:
- The constant rain meaning vegetable crops can't be harvested, silage can't be cut and maize isn't growing.
- Rapidly falling lamb prices.
- Huge increases in input costs.
- Uncertain regulatory environment making forward planning very tricky.
- Lack of appreciation from the uninformed who ignore their hard work producing food, the miles of fencing they have put in and the native trees that have been planted.
I am sure there is more I have missed.
Amen. In the end you HAD to replace the tractor so you borrowed the $500,000. The Bank lent it to you because they know you can't farm without it and you're working for them after all. You try to mechanise work as much as possible as workers are hard to find- especially good workers. Being exhaustively efficient is paramount. Usually when the prices are good you have a poor crop and when prices are poor you have a good crop- Farmers are price takers. There's no negotiation. You're up against the weather, the dollar, interest rates, pests and diseases, and time. It's 24/7. Farmers are poor at taking holidays. Farming is lonely. Most Farmers are multi skilled and pass that knowledge down to their children. I have a great respect for Farmers and agree they are totally taken for granted. They are our food producers after all!
One of the best posts of the year.
There is a lot of mental health strain in farming when things are tough. Farmers act tough and are often responsible for the land generations before them looked after.
Jacinda needs to Be Kind to farmers.
Least we decide she is an "Arrogant little ^%$$%&"
They also see our jobless rate rise from 3.3% to 5.5% in 2024. Given that there are 97,400 jobless now, that means it will rise by at least another 64,900 to 162,300 by 2024. The last time we had 162,000 people unemployed was in 1993 - although back then the labour force was much smaller.
5.5% unemployment in 2024? Tell their forecasters to put their money where their mouth is because I'll take the low side of that.
No way this puppy gets to 5.5% unless government floods the market with foreign labour and drives the economy off a cliff.
I think Robertson (and treasury) are being optimistic in regard to debt,by understating the full debt amount (not net) and the risks in bonds next year.Blackrock said they were overweight,and would not be extending risk into sovereign long to real yields settle.
Robertson used the 10 yr yields as an example of peaking around 4.6%,and with the fed hiking cycle to extend into 2023,there will be interesting times in NZ when the rather large 16.5b bond ends in April 2023 ( coupon 5.5%) which is around where the rate will be,2024 and 2025 see the covid bonds renewed from .5% and 2%,lot of debt going forward as budget deficits being financed at the short end of town.
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