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.
MODEST SPRING BOUNCE
Sales numbers and selling prices were up at Barfoot & Thompson in October from September as the spring upturn finally arrives. But the rises were minor. Their median selling price edged above $1 mln for the first time in seven months to now be -7.4% below year-ago levels.
A [VERY] CLOSE WATCH ON CUSTOMER BEHAVIOUR
Westpac NZ is integrating biometrics software into its fraud monitoring systems "to help protect its customers from falling victim to scams". They are using Biocatch, a global cybersecurity company that analyses customers’ online behaviour to help detect unusual activities that may indicate they’ve been compromised. Biocatch gathers information on a user’s typical physical and cognitive behaviour through dozens of data points based on their actions, such as their typing speed or how hard they press on touch screens.
INCORPORATE HERE & BE REGULATED HERE, OR DON'T DO RETAIL BANKING
The RBNZ is to restrict banks operating in NZ as branches of overseas banks to only offer wholesale business. It was the writing on the wall for HSBC.
OFF THE PACE NOW?
The other event upcoming is the next Global Dairy Trade auction. At the last full event three weeks ago, prices were up more than +4% which was the third consecutive rise at that sort of level. The WMP price rose to US$3,059/tonne then. Since, the GDT Pulse events have seen slippage; two weeks ago the WMP price was US$2981/tonne, and last week it was US$2,946/tonne. The WMP trend is slightly lower now. For SMP, the tracking is similar. Having noted all that, the NZX derivatives pricing for both WMP and SMP indicates a recent turn up. We will know tomorrow morning.
'INFLATION WILL PROBABLY STAY HIGH'
ANZ economists are still forecasting another Official Cash Rate hike next year and say domestic inflation is still sky high, and yet to capitulate, while 'a lot still needs to go right' for the OCR to not need to eventually go higher.
RBA RISE EXPECTED BUT NOT CERTAIN
At about the same time a horse race is happening, the central bank in Australia will release the results of its monthly monetary policy review at 4:30pm today. We will report the results separately, but the RBA is now widely expected to raise their policy rate from 4.10% to 4.35%. It is a level that is far lower than most similar central banks have adopted. The US is at 5.50%, Canada is at 5.00%, ECB is at 4.50% and the RBNZ is at 5.50% too, of course. The UK is at 5.25%, India at 6.50%. China is at 3.45% however and Japan still just at essentially zero. For the RBA to not raise rates as expected will be a market 'disappointment' and come with financial market reactions. Update: confirming, the RBA raised the rate to 4.35% as expected.
RESPONSIBLE LENDING?
In a new report reviewing China's Belt & Road lending to developing countries, China has now grown tto the world's largest debt collector. As time has passed, the 'interest-only periods have ended and now most of these loans now require principal and interest to be repaid putting many countries in a very difficult position - not to mention the Chinese banks doing the lending. China is pivoting away from grand projects to much smaller ones - and it is using defensive lending tactics, including raising cash collateral to safeguard bilateral lending. Collateralised lending stood at 72% in 2021 compared to 19% in 2000. Now when borrowers fall behind on the repayment, the Chinese policy banks are paying themselves overdue principal and interest by unilaterally sweeping foreign currency out of the escrow accounts of their borrowers. ""These cash seizures are mostly being executed in secret and outside the immediate reach of domestic oversight institutions -- such as the auditor general and public accounts committee within parliament." (page 3)
SWAPS SHIFT UP MODESTLY
Wholesale swap rates have probably a little higher today as the US Treasury yields turn back up raising all boats. Update: They didn't. The real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is unchanged at 5.63% and now +13 bps above the OCR. Financial markets no longer price in any chance of an RBNZ rate rise over the next three years. The Australian 10 year bond yield is up +6 bps from yesterday at 4.77%. The China 10 year bond rate is little-changed at 2.67%. But the NZ Government 10 year bond rate is down another -2 bps at 5.29% from yesterday, but still above the earlier RBNZ fixing of 5.24% which was unchanged today. The UST 10 year yield is down at 4.64% and up +6 bps from this time yesterday. The UST 2yr is now at 4.86%, so the curve inversion has deepened to -28 bps.
EQUITIES MOSTLY LOWER
The NZX50 is down -0.6% in late trade today. The ASX200 is down -0.4%. Tokyo has opened down -0.8%. Hong Kong is down -0.7% at its open. Shanghai has opened -0.3% lower. Singapore is also -0.3% lower at its open. Wall Street ended its Monday session up a minor +0.2% is confused trade today.
GOLD DOWN
In early Asian trade, gold is now at US$1975/oz and down -US$16 from where were this time yesterday. Earlier itr closed in New York at US$1978/oz. Earlier still it closed in London at US$1985/oz.
NZD TURNS BACK DOWN
The Kiwi dollar is moving lower today, now down almost -½c to 59.5 USc from yesterday. But against the Aussie we are marginally softer at 91.9 AUc. Against the euro we are also a little softer at 55.6 euro cents. That means the TWI-5 is down to almost at 69 now.
BITCOIN EASES BACK
The bitcoin price is lower today, now at US$34,948 but only down a mere -0.4% from where we were this time yesterday. Volatility over the past 24 hours has been low at just over +/- 0.7%.
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13 Comments
Westpac beefing up security. Fair enough but when you read about the senior couriering $20k in bank notes secreted in pages of thick novels to London it’s hair raisin. Surely the banks would have some basic screening of their customers to enable alerts. You know, elderly, without family, limited computer ability, lives alone, easily confused etc etc so that any unusual transaction attempted are at least flagged. Banks have always claimed themselves as a safe haven for their customers’s funds and that should include applying knowledge of each one’s circumstances.
Was always my call that the economy starts to crack with the 'nice to haves' - craft beer, artisan foods, etc.
https://www.nzherald.co.nz/business/deep-creek-brewery-collapse-how-muc…
Deep Creek’s downfall came after a one-off can seaming issue on the production line put an end to a shipment on its way to China
Hmmm. Every man and his dog has tried to market their craft beer to Chinese consumers. Very few have succeeded.
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