A review of things you need to know before you sign off on Thursday; unsecured credit demand higher, household living costs jump, mortgage interest eats more of household budgets, swaps stable, NZD firms, & 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
None today.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.

DEMAND FOR UNSECURED PERSONAL LOANS ON THE RISE
The latest Equifax Quarterly Consumer Credit Demand Index shows unsecured credit demand rose +9.4% year-on-year, in the September quarter.

BACK TO THE FUTURE
Our analysis shows that the Auckland housing market is at a turning point where immigration-driven demand starts to outstrip supply, which could see a return of the housing shortages that plagued the region prior to 2020.

HOUSEHOLD LIVING COSTS STILL SKY-HIGH
The cost of living for the average New Zealand household is again going up at an increasing rate, according to new data released by Stats NZ. Interest rate payment hikes and rising food costs are key drivers.

'SOME FARMERS WILL DEFAULT'
Some farmers will struggle to cover costs this season and could pose a risk to financial stability if loan defaults rise because the dairy price stays lower than b/e, the RBNZ warns in one of its drip-feed FSR releases ahead of the Financial Stability Review on Wednesday, November 1, 2023.

STILL VERY HIGH DEMAND FOR NZGBs
In today's NZ Government bond tender, there were 138 bids totalling $1.38 bln for the $500 mln available in three maturities. The $200 April 2027 maturity went for a yield of 5.32% which was up from 5.06% four weeks ago. The April 2033 $200 mln went for a yield of 5.49% which, interestingly, was down from 5.54% two weeks ago. Unusual. The May 2051 $100 mln went for 5.64%, up from 5.14% four weeks ago. All up only 35 bids were accepted.

HOME LOAN PAYMENT PRIORITY CONFIRMED
New data out from the RBNZ shows that $4.6 bln in interest was paid in the September quarter on home loans. This is the highest quarterly amount on record, and is more than +44% higher than the same quarter a year ago. It is almost double the September quarter in 2021. The same data shows negligible mortgage writeoffs, rising but still small past due amounts (0.08% - yes 0.0008), and most borrowers keeping up the excess payments (regular mortgage payments over and above what the mortgage contract requires). These are still over $4 bln per quarter and haven't flagged since 2015.

MORTGAGE MARKET STABLE
First home buyers are still signing up to about a quarter of all new home loans, existing homeowners a bit less than 60%, and investors a bit less than 20%. These relative levels haven't changed since late 2022. Overall new home loans came in at $5.2 bln in the September 2023 month, little-different to the $5.1 bln in September 2022. More here. They just cost more.

SWAPS HOLD
Wholesale swap rates have probably held little-changed today at the shorter end, but the long end took off higher. The real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is +1 bp higher at 5.65% and now +15 bps above the OCR. The Australian 10 year bond yield is up +13 bps from yesterday to 4.86%. The China 10 year bond rate is unchanged at 2.74%. The NZ Government 10 year bond rate is up +7 bps at 5.57% from yesterday, but still above the earlier RBNZ fixing of 5.50% which was up +6 bps from yesterday. The UST 10 year yield is up a very sharp +16 bps from this time yesterday at 4.97%. The UST 2yr is up +6 bps to 5.12%, so the curve inversion is now down to just -15 bps its least since mid July 2022.

EQUITIES GLUM
The NZX50 is down -0.7% in late trade today compounding the recent dips. So far it is down -1.8% this week. The ASX200 is down -0.9% in afternoon trade. And Tokyo has opened down -1.8% in its early Thursday trades. Singapore is down -0.2% at its open. Hong Kong has also opened down -0.2% and Shanghai has opened down -0.4%. Wall Street closed down -1.4% on the S&P500 in its Wednesday trade.

GOLD RISES
In early Asian trade, gold is now at US$1985/oz and up +US$12 from this time yesterday. Earlier in New York it closed at US$1980/oz, and earlier still in London it closed at US$1970/oz. Also, see this.

NZD SLIPS
The Kiwi dollar has fallen from this time yesterday and is now at 57.9 USc. But against the Aussie we back up the ½c we dropped yesterday to 92.1 AUc. Against the euro we are up +¼c at 55.8 euro cents. That means the TWI-5 is down -40 bps at 68.1.

BITCOIN FIRMER
The bitcoin price is higher again today, now up at US$34,745 and up +1.7% from where we were this time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 2.1%.

This soil moisture chart is animated here.

Keep abreast of upcoming events by following our Economic Calendar here ».