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A review of things you need to know before you sign off on Monday; strategic reviews by Tower and the energy regulators, SkyCity Auckland shut as punishment, swaps unchanged, NZD on hold, & more

Economy / news
A review of things you need to know before you sign off on Monday; strategic reviews by Tower and the energy regulators, SkyCity Auckland shut as punishment, swaps unchanged, NZD on hold, & more
9th Sep 24, 4:00pm by David Chaston

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 to report today, so far at least. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
SBS Bank trimmed its 5.00% 18 month rate to 4.70%. All updated rates less than 1 year are here, for 1-5 years, they are here.

TOWER HAPPY WITH ITS STRUCTURE/POSITION
General insurer Tower concluded its ownership review with no proposed changes and says the RBNZ has removed the insurer’s solvency margin, restoring $15 mln of headroom.

MAKING THE ELECTRICITY MARKET MORE COMPETITIVE
The newly-established Energy Competition Taskforce says it is progressing work on two fronts: Enabling new generators and new retailers to enter and better compete in the market, and Providing more options for end-users of electricity.

NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Investore gains, Kathmandu drops, strategic reviews released. We welcome comments on that update story.

CLOSED AS PUNISHMENT
Auckland's SkyCity casino is closed this week. Casual observation indicates the Queen Street district is very quiet. Following a regulator investigation, SkyCity agreed to a five-day voluntary closure due to breaches of its licence relating to its harm minimisation obligations.

NEW WESTPAC GROUP CEO NAMED
Westpac Group has named Anthony Miller as its new CEO and Managing Director from December 16. Miller is currently head of Westpac Group's business and wealth division and was previously CEO of Deutsche Bank's Australia and New Zealand operations. Current CEO Peter King is retiring after 30 years at Westpac, including five as group CEO. Westpac Group is the parent of Westpac NZ.

A FAINT UPTICK
The threat of deflation in China, a risk high on Beijing's agenda, is not fading as fast as they would like. Their CPI inflation rate edged up to +0.6% in August from a year ago, from +0.5% in June, but less than market forecasts of +0.7%. Still, it was the highest level since February, mainly due to a strong pick-up in food prices, especially fresh food. However, beef prices are down nearly -13% in a year, lamb prices by -6.3%. Milk prices are down -1.7% on that same basis.

A CONCERNING EASING
Meanwhile, Chinese producer prices fell by -1.8% year-on-year, the most since April, and steeper than the expected -1.4% drop.

SWAP RATES HOLD AT SHORT END
Wholesale swap rates are probably little-changed at the short end again today but higher at the long end. Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 5.12%. The Australian 10 year bond yield is back up +8 bps at 3.98%. The China 10 year bond rate is unchanged at 2.14%. The NZ Government 10 year bond rate is up +5 bps at 4.25% and the earlier RBNZ fix was at 4.18% and unchanged from Friday. The UST 10yr yield is up +2 bps at 3.74%. Their 2yr is now at 3.68%, so that curve is now positive by +6 bps.

EQUITIES STAY IN TIGHT RANGE
The NZX50 is down -0.4% in its late Friday trade. The ASX200 is down -0.6% in afternoon trade. Tokyo has opened its Monday trade down a sharp -2.1% at its open. Hong Kong is down -2.0% and Shanghai has opened down -1.0%. However Singapore is up +0.7% at its open. Many scribes have guessed that Wall Street will open lower tomorrow after the 'weak' US payrolls report. But in fact the S&P500 futures suggests it will rise +0.4%.

OIL RISES
The oil price is up +US$1 from this morning at just over US$68.50/bbl in the US, and still just under US$72/bbl for the international Brent price.

CARBON PRICE IN NARROW BAND
Today the carbon price is back today at $61.50/NZU, still in its new narrow band. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD HOLDS
In early Asian trade, gold is virtually unchanged at US$2496/oz.

NZD HOLDS
The Kiwi dollar is up +20 bps from this morning, now at 61.9 USc. Against the Aussie we are down -10 bps at 92.5 AUc. And against the euro we are up +10 bps at 55.8 euro cents. This all means the TWI-5 is unchanged at 69.7.

BITCOIN FIRMS
The bitcoin price is up +1.4% from this morning, now at US$55,087. Volatility of the past 24 hours has been modest at just on +/- 1.6%.

Daily exchange rates

Select chart tabs

Source: RBNZ
Source: RBNZ
Source: RBNZ
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Source: RBNZ
Source: RBNZ
Source: CoinDesk

Daily swap rates

Select chart tabs

Source: NZFMA
Source: NZFMA
Source: NZFMA
Source: NZFMA
Source: NZFMA
Source: NZFMA
Source: NZFMA

This soil moisture chart is animated here.

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

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33 Comments

by  Baywatch  |  9th Sep 24, 4:33pm 1725856383

CLOSED AS PUNISHMENT

Auckland's SkyCity casino is closed this week. .another one of John Keys great legacies for Auckland City

Prime Minister John Key has confirmed he offered a deal to Sky City allowing the casino to have more pokie machines in return for building a multimillion-dollar convention centre.

The deal

SkyCity is building the Government an international convention centre in return for the Government changing the law to allow the firm to increase profits from gambling at its casino. SkyCity will operate the convention centre once it is built.

The deal was signed in July 2013 at the end of two years of negotiation and after SkyCity chief Nigel Morrison gave the Government a list of law changes he wanted. SkyCity also wanted to protect its casino monopoly by having its licence extended to 2048.

The casino company gets another 230 pokie machines and 12 automated gaming tables at which multiple people can gamble. It will also be able to include another 40 standard gaming tables.

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by  Advisor  |  9th Sep 24, 4:51pm 1725857488

In any other nation, something this dodgy would have law enforcement authorities all over it. Not us, let's just all look away.

Calling NZ the least corrupt country on the planet is the same as stating Saudi has the safest roads anywhere in the world until 2018 since no woman died behind the wheel in the Kingdom!

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by  J.C.  |  9th Sep 24, 4:54pm 1725857644

Calling NZ the least corrupt country on the planet is the same as the Saudi Crown Prince proudly stating that no female died behind the steering wheel in his entire Kingdom until 2018!

The Transparency International measures are more or less propaganda and a tool to harass Global South nations with. Anyone who has any idea of the 'soft corruption' game (and the game of mates) will realize how bad things are in Aotearoa. You can also include the likes of KPMG, PwC (who are off the charts on corruption in Aussie), McKinsey, BCG, etc. All the usual suspects. Someone posted a news article from the Queenstown consulting cartel last week. These people are appalling. Noticed one of them has scurried off to Aussie.  

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by  HouseMouse  |  9th Sep 24, 6:52pm 1725864768

Exactly. We have severe cronyism in this country that I think often borders on corruption.

 

 

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by  E46  |  9th Sep 24, 6:59pm 1725865172

I wonder what country is actually the least corrupt.

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by  J.C.  |  9th Sep 24, 5:49pm 1725860992

Govt / Public sector no exception 

Yes. As far as I'm concerned, that is corruption. 

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by  DaveB1978  |  9th Sep 24, 9:22pm 1725873766

I’m not sure how this is a bad deal. More machines and more tables doesn’t mean more customers. Maybe at peak times it would be a marginal increase. More sites or extended hours would be far worse. Can’t see how sky city being a monopoly is a big problem as we probably don’t want more casinos. 

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by  IT GUY  |  9th Sep 24, 4:36pm 1725856592

This mythical soft landing, how far away from the runway are we at the moment?

 

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by  ChrisOfNoFame  |  9th Sep 24, 5:00pm 1725858012

We crashed. We're dead. We're now experiencing heaven.

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by  J.C.  |  9th Sep 24, 4:39pm 1725856771

Among the 'most expensive' supermarkets in the UK Morrisons is now cheaper than Aldi and Lidl after 15% price cut on shopping essentials. This is based on a longitudinal price comparison on a 'basket' including mince, chicken, a two-pint bottle of milk, a loaf of bread, coffee, teabags, butter and beans. Approx cost in Kiwi pesos is $25.42, 

Aldi challenges the results and says that it doesn’t take into account like-for-like products or ‘the higher quality’ of its products. 

https://www.manchestereveningnews.co.uk/news/cost-of-living/most-expens…

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by  ChrisOfNoFame  |  9th Sep 24, 5:05pm 1725858354

Loaf of white bread 800g - 47p

Milk 2 pints - £1.20

Coffee (2 x 100g) - £1.98

Teabags 160 (2 x 80-pack Savers) - £1.60

Savers Salted butter 250g - £1.69

Beans 410g tin - 27p

Chicken 300g - £2.25 for 330g, equates to £2.05 for 300g

Mince 500g 25% fat - £2.29

[Checks last supermarket receipt.] Bringing up kids in the U.K. would have been cheaper - especially now they're teenagers!

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by  HouseMouse  |  9th Sep 24, 6:54pm 1725864859

Wait for the usual denialists to say ‘but the quality is crap’

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by  JimboJones  |  9th Sep 24, 7:35pm 1725867354

How are you going to deny my comment below?

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by  HouseMouse  |  9th Sep 24, 7:38pm 1725867482

By saying its a nonsense to discount the GST factor in comparing prices ‘off the shelves’.

And it is a nonsense

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by  JimboJones  |  9th Sep 24, 7:48pm 1725868136

It was implied that if we had their supermarkets we’d be much better off. But really all we need is their tax policy (personally I prefer ours). 

Do you think we should have GST removed from food to better those prices? If so, what tax should we have to make up for it? Or should we increase our government debt by more than 3x to approach the UK levels? 

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by  JimboJones  |  9th Sep 24, 7:34pm 1725867260

If you subtract GST (they don’t pay it on food there), our prices are cheaper! I got these from New World online, subtracted GST and converted to GBP

bread: $1.19 = 48p

Milk: $3.93  2l = $2.23 2 pints = 91p

Butter: $6.49 500g = $3.25 250g = £1.32

Chicken: $14.99kg = $4.50 300g = £1.83

(I can’t be bothered doing the rest)

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by  HouseMouse  |  9th Sep 24, 7:35pm 1725867320

That’s a nonsense to take out the gst factor then claim the items are cheaper in NZ.

 

 

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by  JimboJones  |  9th Sep 24, 7:38pm 1725867533

I’m just claiming our supermarkets are cheaper, despite the common rhetoric that we are being ripped off. Of course our taxation is different. I assume you voted for Labour last election to remove GST from fruit and veg? 

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by  HouseMouse  |  9th Sep 24, 7:46pm 1725868002

But it’s a pile of crap of an argument manufactured by discounting the GST factor.

So if petrol sells in Australia for $1.70 a litre, and it’s $2.40 here, and a big part of the difference is our much higher taxes on fuel - then by the same argument you would discount the tax factor and say the prices are similar

Rubbish!

It’s what the prices are on the shelves, or at the pumps, that matters. Not the tax influences behind those prices

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by  JimboJones  |  9th Sep 24, 8:09pm 1725869399

It’s a great argument if you are comparing supermarket profits. You can’t blame them for GST. Or maybe you can. 

If you don’t account for tax it’s almost impossible to compare prices internationally. For example VAT in the UK is 20% where it does apply, so many things will be dearer there. 

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by  HouseMouse  |  9th Sep 24, 8:40pm 1725871250

But the thrust of  the discussion wasn’t supermarket profits or taxation. It was prices for consumers. You know, What we actually pay for things, regardless of taxes, profit etc

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by  JimboJones  |  9th Sep 24, 9:58pm 1725875911

It feels like we’ve discovered that most of the consumer price differences are not down to duopolies etc, but taxation. There are some big differences between us and the UK when it comes to taxation and government handouts, for example in the UK:

  • No VAT on some items, 20% on others
  • No tax on first £12k, 45% top rate
  • Free dental, better NHS (but much worse life expectancy)
  • Much more government debt
  • No WFF equivalent?

I’m not convinced that their model is working any better than ours. 

 

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by  HouseMouse  |  9th Sep 24, 11:10pm 1725880219

Neither am I.

But if I look across the ditch I would say Aus has a far superior offering to here. And they are our most direct competitor- not only for foreign ‘talent’, but for our very own homegrown talent.

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by  JimboJones  |  9th Sep 24, 9:55pm 1725875735

Even if you keep the GST on, most of our prices are still similar to theirs. I find that quite surprising really, I remember food being really cheap when I was there, their inflation must have been horrendous since. 

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by  ChrisOfNoFame  |  9th Sep 24, 8:17pm 1725869831

JJ: "If you subtract GST (they don’t pay it on food there), our prices are cheaper!"

Staggering stuff! Simply staggering.

Tell me JJ, where can I shop in NZ where there is no GST on food?

So let's correct this situation and remove GST on food. But we need to recover the tax from somewhere, right? Where JJ? Where?

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by  JimboJones  |  9th Sep 24, 10:05pm 1725876301

Where can you buy a washing machine or  fuel in the UK without paying 20% VAT? Do they selectively compare our prices and claim we are 5% cheaper when it’s just due to tax differences? 

We could probably change to a similar VAT system as them with food 0% and everything else 20%, is that what you prefer (honest question)? If you think the poor would be better off I’m not convinced as a lot of the food they tend to consume does have VAT:

most basic food items are either zero-rated or exempt from VAT. This means that everyday ingredients used for cooking and baking, as well as essential food items like bread, milk, fruits, vegetables, meat, and fish, are not subject to VAT. However, there are exceptions to this rule, such as luxury food items, pre-packaged or ready-to-eat foods, and hot takeaway food, which are subject to the standard rate of VAT. 

 

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by  ChrisOfNoFame  |  9th Sep 24, 4:55pm 1725857748

Westpac is still the government's banker. When's that contract up for renewal?

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by  IT GUY  |  9th Sep 24, 6:39pm 1725863942

The agreement will see Westpac provide transactional banking services to the Crown and 39 core agencies through to 2027. Westpac NZ General Manager of Institutional and Business Banking Reuben Tucker says the bank is delighted to continue as the Government's main banking partner.

Quite of lot of international payment processing, does not really present as an opportunity for anyone but the big four.

 

 

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by  ChrisOfNoFame  |  9th Sep 24, 8:18pm 1725869903

Maybe. Maybe not. 2027, ay? Hmm....

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by  mfd  |  9th Sep 24, 10:46pm 1725878775

Crazy that we've stopped even looking at the nation-changing project of lake Onslow, which would solve the dry year problem that ministers were so distressed about a couple of weeks ago, but we can drop a similar amount of money on a few roads. 

And that's the price before we get screwed on a private finance deal.

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by  agnostium  |  10th Sep 24, 12:05am 1725883538

That's what people falling for culture-narrative  anti-wokeness gets you, fucktards get into power and destroy the nation for future generations. 

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