A review of things you need to know before you sign off on Wednesday; no retail rate changes, RBNZ delivers a hawkish hold as expected, dairy prices up, Westpac eases conditions, swaps up, NZD down, & 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/LOAN RATE CHANGES
No changes to report so far today.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.

STANDING PAT WITH A HAWKISH UNDERTONE
The Reserve Bank left its policy rate at 5.5% today, as universally expected, and for a third straight meeting, the longest pause since 2021. (It is only ten days until the election, after all.) However while they did signal they are on the right path in their battle against inflation, and that while there are some near-term risks on the upside, they may need longer to overcome those and get inflation back to its target. That is where the hawkishness comes from. (Almost all professional economists say the Statement is 'dovish', so take your pick. ANZ and BNZ are exceptions.) The currency markets trimmed the NZD by -30 bps but the bond markets didn't shift much after the announcement from the levels before. More here. The November 29 Monetary Policy Statement is going to be really 'interesting'.

TURNING UP
Dairy prices rose +4.4% in today's dairy auction, the third straight rise. But no analyst has changed their view that this third rise is enough to raise their milk price forecast. These prices are still -20% lower than a year ago.

REDUCED VERIFICATION REQUIREMENTS
Westpac said it has eased up on some loan verification requirements. They announced that for eligible customers who are refinancing their like-for-like home loan without any increase in lending or payment obligations, they have removed verification for income verification, transaction records/statements of all accounts, debt servicing and repayment amounts, fixed commitments, and other necessary recurring expenses. All other credit criteria and policies do still apply.

CRE RULES FINALISED
The FMA has published its final guidance for Climate Reporting Entities (CREs) on meeting their record keeping obligations. CREs are all registered banks, credit unions, and building societies with total assets of more than $1 billion, all managers of registered investment schemes (other than restricted schemes) with greater than $1 billion in total assets under management, all licensed insurers with greater than $1 billion in total assets or annual premium income greater than $250 million, listed issuers of quoted equity securities with a combined market price exceeding $60 million, listed issuers of quoted debt securities with a combined face value of quoted debt exceeding $60 million, and authorised Bodies, who are managers of registered schemes and operate under the licence of another manager, where the total assets under that licensee (including assets of all authorised bodies) exceeds $1 billion.

POLICY RELEASE
There was only one political party policy release today, this one from Labour, their Defence policy. You can find all party policies, easily compared by policy topic, here.

UNEXPECTED IMPROVEMENTS
In Japan, the Markit services PMI was revised higher to 53.8 in September from 53.3 in the flash estimates, a 13th consecutive month of good expansion in their service sector. In South Korea, their latest factory PMI improved nicely as well, almost taking them out of contraction. It was an improvement that wasn't expected. Despite deep-seated cultural rivalry, it helps Korea that Japan is doing much better these days.

JERKING SIGNAL
We follow the Fear & Greed Index weekly, but we should perhaps note that it has jerked suddenly in the 'extreme fear' mode today.

SWAPS FIRMER YET AGAIN
Wholesale swap rates are probably moving up again today, and still sharply and especially at the long end. But the real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is unchanged at 5.72% and now +22 bps above the OCR but this rate was set before the OCR. The Australian 10 year bond yield is up +5 bps from this time yesterday to 4.63%. The China 10 year bond rate is unchanged at 2.71%. The NZ Government 10 year bond rate is up +16 bps to 5.60%, and now far above the earlier RBNZ fixing of 5.49% which was up +5 bps today, also before the OCR announcement. The UST 10 year yield continues its rise, up +15 bps today to 4.84%. The UST 2yr has risen only +3 bps, now at 5.15%. So the curve inversion is unwinding very fast now.

EQUITIES SHARPLY LOWER
The NZX50 is down -0.7% near the end of trade today and with little reaction from the RBNZ announcement. Year to date, the NZX50 is down -3.7% now. It's all global forces for equities. The ASX200 is also down -0.7% in early afternoon trade, and taking their 2023 losses to -0.8%. Tokyo is down a sharp -1.9% in Wednesday morning trade. Hong Kong is down -0.7% in early trade. Shanghai is closed this week. Wall Street ended its Tuesday trade with the S&P500 down -1.4% on the bond rout.

GOLD'S FALLS EMBED
In early Asian trade, gold is now at US$1824/oz and up a mere +US$1 from this time yesterday. Earlier it closed in New York at US$1823/oz, and earlier still it closed in London at US$1822/oz.

NZD RETREATS
The Kiwi dollar fell -40 bps on the RBNZ announcement (a relatively minor reaction as OCR reactions go), now is at 58.9 USc and down -40 bps from this time yesterday. A rising USD is part of this. Against the Aussie we are little-changed at 93.3 AUc and against the euro we are almost -½c lower at 56.2 euro cents. That means the TWI-5 is now down -30 bps at 69.3.

BITCOIN SLIPS BACK AGAIN
The bitcoin price is a bit softer today, now at US$27,325 and down a further but minor -05% from where we were this time yesterday. Volatility over the past 24 hours has been low at just over +/- 0.8%.

This soil moisture chart is animated here.

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