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
Bank of China has raised fixed rates by +10 bps for terms 2 years and longer.
TERM DEPOSIT/SAVINGS RATE CHANGES
Unity Money is the latest to raise key TD rates to 6% of more.
FHBs ENDURE
Home loan affordability reports show first home buyers have been poorly served by both Labour and National-led governments over the past 12 years. Of the 28 urban areas we monitor, first home buyers can now only buy in five of them where they spend less than 40% of their take-home pay on the mortgage payment if you only have a 10% deposit. Two are in the South Island, three in the North Island. It is seventeen centers if you have a 20% deposit. Despite all those headwinds and obstacles, FHBs still managed to win a quarter of all new lending. And since the RBNZ started reporting this share in 2014, that is near a record high.
FRAUDSTERS JAILED
Two Auckland men, Bryan Martin and Joshua Grant were sentenced to between two and four years imprisonment for mortgage fraud. Earlier their partners were sentenced to home detention for their part in the fraud, some of it quite active. $8.7 mln was involved.
NZGB TENDER DELAYED
We were expecting to report the $500 mln NZGB tender #880 results today, but they seem to be delayed. We will update this item when the results are known. Treasury advised this tender has been postponed due to technical difficulties within the YieldBroker tendering system.
WHERE THE RETAIL CUTBACKS ARE
ANZ reported its card tracking shows small gains in consumer spending in September. Tourism is a bright spot. But for consumers spending on clothing is lower than a year ago despite inflation rising +4.4% for that category. Spending on business goods and services is the other area keeping the overall levels up, especially "utilities and repairs".
JAPAN EXPORTS RISE
Japan's pivot away from China seems to be paying off. Exports are rising again, up +4.3% in September from the same month a year ago. This was underpinned by a +13.0% jump in exports to the US.
CHINA HOUSING WOES SPREAD
In China, new home prices fell their most in almost a year in September. This undermines the idea that Beijing is on top of their property crisis. For new homes they fell in 45 of the top 70 cities. For resales they fell in 67 of the 70 on a year-on-year basis. It was similar for both sectors of their housing market on a month-on-month basis. Both are worse than for August.
AUSSIE JOBS BRITTLE
Australia reported its monthly September labour market data today. (We have to wait until Wednesday November 1 to get our quarterly update, another key piece of public policy data that is released much later in New Zealand than elsewhere. The US managed to report their monthly September labour market data on October 7 !). Things were little-changed in Australia with their jobless rate at 3.6% but the twist was to much more part-time work. There were +58,200 part time jobs added in September, and -23,300 full time jobs lost in the month.
SWAPS UP
Wholesale swap rates have probably risen again today on the back of some more big moves in benchmark bond rates globally. But the real reaction will come at the close. Our chart will record the final positions. The two year rate may be little-changed but longer rates will be. The 90 day bank bill rate is unchanged at 5.66% and now only +16 bps above the OCR. The Australian 10 year bond yield is back up +11 bps from this time yesterday to 4.77%. The China 10 year bond rate is up +1 bp at 2.74%. The NZ Government 10 year bond rate is up +11 bps to 5.67% from yesterday, but still above the earlier RBNZ fixing of 5.55% which was up only +6 bps today. The UST 10 year yield is up another +11 bps from this time yesterday at 4.95%. Generally rates inversions are unwinding.
EQUITIES ALL DIVE
The NZX50 is down -0.8% in late trade today. The ASX200 is down a sharper -1.2% in afternoon trade. Tokyo has opened down -1.3%. Hong Kong has opened down -1.9% and Shanghai has opened down -0.9%. Wall Street closed down -1.3% on the S&P500 in Wednesday trade earlier today.
GOLD RISES FURTHER
In early Asian trade, gold is now at US$1949/oz and up +US$9 from this time yesterday. Earlier in New York it closed at US$1947/oz, and earlier still in London ir closed at US$1956/oz.
NZD WEAKER AGAIN
The Kiwi dollar has slipped -40 bps since this time yesterday and now at 58.5 USc. Against the Aussie we are unchanged at 92.6 AUc. Against the euro we are softisg at just on 55.5 euro cents. That means the TWI-5 is down another -30 bps at just on 68.7. Commodity currencies are out of favour when risk is 'off'.
BITCOIN RANGEBOUND
The bitcoin price is firmer again today, now at US$28,413 and up just +0.02% from where we were at this time yesterday. And volatility over the past 24 hours has been modest at just over +/- 1.4%. By being on the sidelines, this crypto is not acting as a safe haven.
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46 Comments
This is really what every person should be gravitating towards.
Instead most of us have outsourced the supply of most of life's essentials, and just assume however we fill our day will provide for what we need (and then some).
Most individuals don't have that much leverage.
Usually because when things go super doo-doo in one area, it's possibly going doo-doo almost everywhere.
People with high overheads and liabilities will do it tough, but the people who were already close to hand to mouth before are going to fare far worse.
But we don't talk about them, because we only tend to look up, not down.
In early Asian trade, gold is now at US$1949/oz and up +US$9 from this time yesterday.
And through the $3,300 milestone in Kiwi pesos.
If a supply shock spikes crude toward $150, the enduring relationship with the S&P 500 would imply gold about USD3,000.
Mike McGlone - Senior Macro Strategist - Bloomberg Intelligence
Two Auckland men, Bryan Martin and Joshua Grant were sentenced to between two and four years imprisonment for mortgage fraud.
Kicking someone to death “martial arts-style” will only land you 2 years in jail WITH leave to apply for home detention. Also, you'll get nothing worse than home detention for slicing someone into pieces with a samurai sword (perhaps only applicable to Tesla drivers.
Yet these two bastardly fraudsters are going to jail full stop. Guess you shouldn't mess with anyone involved in the property ponzi? I'm not sure whether to laugh or cry at the absurdity. Has life really become so cheap and money so sacred?
Pretty straightforward, the majority of Bitcoin collectors are net losers, whereas most people holding gold now hold gold at or above the price they entered at.
Not correct. If you use Glassnode, you can understand Net Unrealized Profit/Loss (NUPL) on all BTC. It is currently positive so the majority of BTC is in profit. You can compare this across short-term and long-term holders.
Furthermore, you can look at the current price of BTC to the 200 week moving average for a directional understanding.
You're confusing the value of the coins themselves with the fortunes of the people holding them.
A small minority have absolutely crushed it.
A slightly larger group have done ok.
A few more are holding steady.
Most have less than they have put in.
The last group are large in number, but between them hold a small percentage of the total value.
If most of the users entered the market (or did most of their buying) when the price was higher than it is today, the net result is most Bitcoin collectors have lost money.
Economists at the Bank of International Settlements, an institution widely considered as the central banks of central banks, analysed data on investors in cryptocurrencies in 95 countries between 2015 and 2022.
"Overall, back of the envelope calculations suggest that around three-quarters of users have lost money on their bitcoin investments," they said in their study.
"Our analysis has shown that, around the world, bitcoin price increases have been tied to greater entry by retail investors," the researchers wrote.
Moreover, they said they found that "as prices were rising and smaller users were buying bitcoin, the largest holders (the so-called 'whales' or 'humpbacks') were selling –- making a return at the smaller users’ expense."
If most of the users entered the market (or did most of their buying) when the price was higher than it is today, the net result is most Bitcoin collectors have lost money.
If you say that Glassnode data is fraudulent, then you may have a case. But I doubt you understand what Glassnode is and how it works.
The BIS should.
My BTC address will show 200+ purchases of BTC. 86% of those at prices lower than today and 14% higher than today. These transactions are included in the aggregate data.
Conceptually, it's not difficult to understand.
HGWR's managed to succinctly convey things in different terms.
We don't know how much you spent on the 86% you're up on, vs the 14% you are down on. So the percentage is useless, the net figure is all that matters.
You and I very clearly have different approaches to generating and defining a surplus.
I'm factoring in that people have been holding gold for centuries and the value rarely drops more than 10% at the worst of times, and Bitcoin has been held for under two decades and today is less than half the value of its high.
Oh, and for every lonewolf I've encountered, I've known about 50+ people who once raved about it and are silent, or have to fiddle with percentages to convince themselves they're still on track.
Vast majority of BTC is held by long term holders. Most of the tourists that got burnt at $60k are already long gone. Don't forget people like me (there are many others) who exited and have large cash positions to re-enter.
Now turning to gold. Fun fact. Last I checked if you bought in 1987 you are still underwater if you adjust for inflation. Possibly that number is incorrect now (its been a while) - but EVEN IF you broke even in inflation adjusted terms you will have a huge tax liability on your "gain" as gold is taxed on resale but with no adjustment for inflation.
Even short term gold has been a dog. In 2020 gold was at $2035 and BTC $10k. So those investors who bought gold at the time are in a loss (BIG loss if its physical gold due to the spread) but those in BTC have nearly tripled their money.
(That say I hold gold via stable coins and ETFs - but much smaller than my BTC allocation)
These are inflation busters Wolfster.
Value today of $10,000 invested a decade ago:
Bitcoin: $2,120,615
Nvidia: $1,190,079
AMD: $274,386
Tesla: $210,848
Broadcom: $204,015
Eli Lilly: $124,632
Adobe: $105,147
Apple: $101,619
Microsoft: $96,021
Netflix: $82,755
Amazon: $83,520
Alphabet: $62,951
Meta: $64,079
iShares 20+ Year Treasury Bond ETF (TLT) price continues to slide - now down 50% from its peak a few years ago.
A sign that higher expected rates are decimating the sum of future expected cash flows (using higher discount rates).
https://finance.yahoo.com/quote/TLT/
The TLT would have been considered a safe asset/low risk to hold and yet its down 50%! Be careful out there.
Is Canada's opposition leader it's next PM ?(...wins Jordan Peterson award for best use of an apple in a live interview)
https://youtu.be/CmbAPfKJMRU?si=4lRHnFSPJ19PSdoc
Did a back-test of the 1, 2, 5 and 10 year swaps against previous inflation events going back a long way.
Guess what?
HFL is looking like the nonsense it is.
I can find nothing different this time to previous times.
Ergo ... This time is no different. And the timelines for rate movements look to be no different to previous patterns we see for the 1, 2, 5 and 10 year swaps.
HFL is a con.
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