What happened Tuesday

Economy / news

A review of things you need to know before you sign off on Tuesday; Kiwibank grabs a mortgage rate mantle, residential market not a happy place for sellers, farmers mood gets spring lift, swaps soft, NZD firm, & more

17th Sep 24, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).

MORTGAGE/LOAN RATE CHANGES
Kiwibank but most rates, especially their one year fixed rate to a market leading position. More here. More details here. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Kiwibank also cut all its TD rates from nine months and longer. More here. All updated rates less than 1 year are here, for 1-5 years, they are here.

MANY SELLERS, FEW BUYERS
The interest.co.nz August housing market report show it ended winter on a fairly flat note, but is carrying a great weight on its back of listed but unsold properties as it trudges into spring. It under-achieved the winter benchmark of 6000 monthly sales, and goes into September with a bruised ego.

SELLERS SET SIGHTS LOWER
The average asking price of Auckland properties dropped below $1 mln on the TradeMe Property portal for first time in four years they said, wondering if there's a "structural weakness" in the housing market. On realestate.co.nz that same Auckland asking price average was $1,047,000.

THROWING THE BOOK AT A JUNIOR
The Financial Markets Authority has filed criminal proceedings against a junior Heartland Bank employee for alleged insider trading over Heartland Group Holdings shares.

NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. WHS & THL have a good day, RYM and SCL struggle again. AIA's underwritten placement 'strongly supported'

FEELING BETTER
Although it isn't yet reflected in their financials, farmer confidence continued its upward trend in August, according to an updated Rabobank survey. In fact, confidence in the broader agri economy is back at net positive levels for the first time since late 2021.

UPSIDE ?
There is another full dairy auction tonight. The dairy derivatives market suggests WMP prices will be little-changed from the prior full event or the in between Pulse event. But SMP could be up about +5% from the prior full event, up +3% from last week's Pulse event.

A FOURTEEN YEAR LOW
There were only 195 new tractors registered in August, which was -26% less than the same month a year ago (which itself was the ten year average). The August level compounds a string of low sales months, so the full year to August is -21% lower than the same period a year ago. And that is the biggest annual decline since 2010.

SIGNS OF SPRING?
We track advertised commercial lease vacancies on realestate.co.nz but have only been doing it since early April (22 weeks). In that time all urban areas we track have seen rises (except Palmerston North). But in the past four weeks, there has been a noticeable fall in vacancies in the Manakau hub of Auckland. And a notable rise in Christchurch. Most other zones are as you would expect in winter, even Wellington.

SWAP RATES WARY OF FED
Wholesale swap rates are probably soft again today. Markets are jittery ahead of Thursday's US Fed decision. Our chart below will record the final positions. The 90 day bank bill rate is down a very sharp -6 bps at 5.01%. Since the August 15 OCR drop, the 90 day bank bill rate has fallen another -36 bps. The Australian 10 year bond yield is unchanged at 3.85%. The China 10 year bond rate is unchanged from yesterday at 2.07% but remember Shanghai is closed. The NZ Government 10 year bond rate is up +1 bp at 4.13% and the earlier RBNZ fix was at 4.07% and down -1 bps from yesterday. The UST 10yr yield is little-changed at 3.65%. Their 2yr is now at 3.59%, so that curve is now positive by +6 bp.

EQUITIES MIXED
The NZX50 is down -0.3% in its late Tuesday trade. The ASX200 is up +0.3% in afternoon trade and to a record high. Tokyo has opened its Tuesday trade down a sharpish -2.1%. Hong Kong is up +1.4% but Shanghai is closed for a public holiday. Singapore is up +0.7% at its open. The S&P500 ended its Monday session on Wall Street barely changed, up +0.1%.

OIL UP
The oil price is up +US$1.50 from this time yesterday at just on US$70.50/bbl in the US, and now just over US$73/bbl for the international Brent price. Most of this change is due to USD weakness.

CARBON PRICE STEADY
The carbon price is unchanged again at $61/NZU. Volumes traded are still light. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD HOVERS HIGH
In early Asian trade, gold is down -US$4 at US$2580/oz but still near its record high.

NZD HOLDS
The Kiwi dollar is up +40 bps from this time yesterday at 62 USc on a sinking USD. Against the Aussie we are still at 91.8 AUc. And against the euro we have risen +20 bps to 55.7 euro cents. This all means the TWI-5 is up +30 bps at 69.6.

BITCOIN SLIPS
The bitcoin price is down -0.6% from this time yesterday, now at US$58,087. Volatility of the past 24 hours has been modest at just on +/- 1.4%.

Daily exchange rates

Select chart tabs

Source: RBNZ

Source: CoinDesk

Daily swap rates

Select chart tabs

Source: NZFMA

This soil moisture chart is animated here.

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

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83 Comments

by IT GUY | 17th Sep 24, 4:04pm 1726545896

Property headlines and news turns decidedly DGM today....

Its going to take a biblical miracle this summer for the market to hold up, buyers seem well in control and they know it.

by HughJorgan | 17th Sep 24, 4:07pm 1726546041

I caught up with two good friends today, both were dealing with redundancies at their work. One in the marine industry and the other in chemicals.

Nothing will recovery until the job market does.

Edit: I should add that both are outsourcing production from SE Asia. NZ is simply too expensive for production.

by chemistpeter@g… | 17th Sep 24, 4:19pm 1726546794

What chemical company? I know Allnex is closing down end of 2024.

by HughJorgan | 17th Sep 24, 4:23pm 1726547011

I can’t say because it’s a small industry. Can’t blame them when you can make things so much cheaper offshore.

by ChrisOfNoFame | 17th Sep 24, 5:44pm 1726551849

" ... when you can make things so much cheaper offshore."

Yeah. I hear that a lot from lazy rentier business people in NZ. But do some analysis?

About 75% of the time, yeah, they can produce locally. Well. Like I said, lazy rentier business people in NZ.

But like they say - and is VERY difficult to argue - RBNZ (& government to a lesser extent) = Boom, Bust, Bust, Boom, Bust ....

Methinks you get the picture.

by Pa1nter | 17th Sep 24, 6:23pm 1726554185

We all easily forget that before the advent of inflation targeting by central banks, economic downturns didn't exist.

Pretty hard to overlook the many multiples cheaper it is to get someone else to make our stuff overseas. If your competitors are doing it, fairly difficult to compete.

by Rampart | 17th Sep 24, 7:18pm 1726557539

Employing people in NZ has become a nightmare. I run a small business and employ a handful of full time employees. One employee has been absent for more than 60% of his shifts this year due to a high risk sport injury but I have been unable to move him on as it’s my responsibility as a business owner to assist him back to full time work. I don’t think SE Asia need these constraints. Lift your weight or we will find someone who will. Let business be about business.

by Pa1nter | 17th Sep 24, 7:27pm 1726558045

If you introduce several billion new workers into a global labour market, while at the same time making your own labour increasingly expensive via employment, environment, and h&s regulations, retaining valuable domestic jobs is a tall order.

by Advisor | 17th Sep 24, 4:47pm 1726548471

Not surprising that the market is no longer willing to pay a price premium to NZ producers just to cover high housing costs.

Who needs domestic production and exports when you could slash the OCR to the ground and kickstart the "real" economy, am I right spruikers?

by Pa1nter | 17th Sep 24, 6:24pm 1726554271

I'm not sure how many developed economies don't bleed jobs to where it can be done considerably cheaper.

But yes I suppose if houses were free, people wouldn't need to be paid so much.

by JimboJones | 17th Sep 24, 5:11pm 1726549903

Its bad news for everyone, there will no doubt be some big RBNZ rate cuts coming fast. This is the exact scenario I expected; RBNZ went too hard for too long, and now they will cut back to 0 which will create the opposite problem.

by Advisor | 17th Sep 24, 5:20pm 1726550411

We had low interest rates in NZ for almost a decade but hardly any new monies went into capital formation outside of brick-and-mortar on a per head basis.

Hard to see if another round of low interest rates will produce anything other than housing inflation, which forces more young Kiwis abroad and worsens living standards in NZ.

by JimboJones | 17th Sep 24, 5:23pm 1726550593

Agree. I said a few months back that the ideal scenario was steady house prices and the OCR cut to about 4%. Instead we could see extreme OCR cuts and house prices tanking and then going nuts again, a much worse outcome for the country.

by Advisor | 17th Sep 24, 6:05pm 1726553133

True. We are already clocking >6% current account deficit to GDP. I am afraid that the wealth effect from higher house prices will only worsen our balance of payments from here and risk a bigger financial catastrophe.

by JimboJones | 17th Sep 24, 6:18pm 1726553918

The worst part will be that FHBs will be too scared to pick up the cheap houses at the bottom, it will be savvy investors who ride the wave.

by IT GUY | 17th Sep 24, 6:22pm 1726554127

nom nom nom

but not yet grasshopper

by HouseMouse | 17th Sep 24, 5:28pm 1726550892

‘This is the exact scenario I expected’

Really? You have been calling a soft / moderate landing consistently over the past 1-2 years. And have consistently critiqued my gloominess.

Your comment doesn’t stack up

by JimboJones | 17th Sep 24, 6:16pm 1726553799

Several times I have said they will leave the party too late. I also said the soft landing was looking less likely in NZ due to them holding rates high for too long (I think soft landing is still on the cards in US). Moderate landing is still the most likely outcome for NZ, but I admit it isn't looking great.

I really think it would have been a lot different had they cut first review this year, soft landing was on the cards then.

by HughJorgan | 17th Sep 24, 4:04pm 1726545890

Kiwibank is in a great position to lead the market down in rates. It would be impossible to do if it was publicly traded because of shareholder return requirements.

I hope that someone sees the light and stops talking rubbish to the public. I’d say the Investment Bankers have got in their heads about a listing.

by nz-it-worker | 17th Sep 24, 4:10pm 1726546206

Bit of a worry when the mayor of your capital city, on a salary of $189k and who won $1.4m on lotto, is so poor with money she has to sell her car to help pay the bills.

https://www.rnz.co.nz/news/national/528229/wellington-mayor-tory-whanau-sells-car-to-help-pay-the-bills

by FCM | 17th Sep 24, 4:14pm 1726546442

You beat me too it, to have that sort of fortune and be in that position is no role model that's for sure.

by Uninterested | 17th Sep 24, 4:22pm 1726546969

Its either lack of self control, lack of financial know how or its virtue signalling.

by Te Kooti | 17th Sep 24, 4:41pm 1726548099

I should be surprised, but I'm not.

The Mayor of one of our most important cities seemingly so financially illiterate that she has to sell her own car to pay bills. I guess that's better than shop-lifting or doing a runner from the police though eh!

by JamesM | 17th Sep 24, 5:05pm 1726549547

Hmmmm when you take into account her sex scandal and her refusal to pay her bill at her restaurant she’s not far off.

by Te Kooti | 17th Sep 24, 5:15pm 1726550124

The sex scandal I don't care about, many men do far worse. She possibly lacks maturity.

What I care about is the state of Wellington, which has nose-dived under her watch. I was there a few weeks back, Courtney Place was dead on a thursday night, closed shops everywhere including Lambton Quay. Catastrophic under-investment in water assets, treatment of local retailers like they are terrorists etc etc.

There is a whiff of death about the place and much of it is due to her.

by JimboJones | 17th Sep 24, 5:20pm 1726550419

I haven't been there for a while (maybe 6 years), but it felt like it was dying then. I used to like their city centre, but it felt a bit dated and boring TBH.

I doubt a right wing cost cutter would have done anything better, they never invest in vital infrastructure either.

by Baywatch | 17th Sep 24, 6:38pm 1726555122

It started with her predecessor ..she was handed the chalice..but hey yer lets blame someone if it makes you sleep better at night. If they took out the cycle lanes and raised pedestrian crossing the city would just bounce back?

by JimboJones | 17th Sep 24, 6:59pm 1726556348

Of course, cycle lanes are the cause of all life's problems. Every city in the world without them is thriving.

by kiwikidsnz | 17th Sep 24, 7:18pm 1726557503

It started with Celia Wade Brown, 3 predecessors / 14 years ago

by Te Kooti | 17th Sep 24, 7:02pm 1726556571

How did we get to the point that you are considered right-wing if you cut costs?

Maybe not, but things would certainly be a hell of a lot better with a commercially minded mayour who liaised with the business community, who kep the 7's, who pushed the region forward commercially.

by Foxglove. | 17th Sep 24, 5:31pm 1726551109

The thing is identities such as this assuming office, and ditto for councillors of similar ilk, is a direct result of apathetic and poor voter turnout. If only a modest percentage of any community vote then a well organised and mobilised faction can turn out & grab a majority, or significant presence, of the minority so to speak and well beyond their actual representation, pro rātā to the roll.

by Silvi | 17th Sep 24, 6:29pm 1726554541

Use the Mayoral car. I betcha I know what she is up to.

by rastus1 | 17th Sep 24, 4:17pm 1726546623

In contrast, one thing going for Auck at the moment is they have a mayor who knows his stuff.

by chemistpeter@g… | 17th Sep 24, 4:20pm 1726546850

And he didn't win Lotto.

by HughJorgan | 17th Sep 24, 4:27pm 1726547258

I was impressed by the interview the other day. The fact he dosn’t really want to stay on other than to avoid some dumb arse coming in and scraping everything seems very legitimate.

I think Mr Brown was about 2 years ahead of the economy and financial restriction.

Never voted in local elections before but if he runs I’ll be making the effort to support him.

by Baywatch | 17th Sep 24, 6:40pm 1726555241

Yes his bridge over Meola reef sure is clever ...except for the part of where do the cars go to in Birkenhead??

by IT GUY | 17th Sep 24, 7:15pm 1726557320

but thats the point the motor ways north are clogged as is....

by The Person | 17th Sep 24, 10:45pm 1726569957

what's the point of adding expensive capacity across the harbour if there is no capacity on either end to get to/from the bridge?

by IT GUY | 17th Sep 24, 11:34pm 1726572872

brutal but effective message from the mayor....... he is smarter then the average bear booboo

or clearly now paying for or having a decent press advisor in the team (paid by fairies)

so what does Mr W Brown really want to fund for AKL, lets listen to him.. surely he has a vision for AKL

I am prepared to say the odds on Mr S Brown having a better plan are very low.

by solardb | 17th Sep 24, 8:52pm 1726563175

It would make a great walking / cycling route.

by Silvi | 17th Sep 24, 6:30pm 1726554607

Have an engineer to know what making a mistake costs.

by Baywatch | 17th Sep 24, 6:42pm 1726555366

by mfd | 17th Sep 24, 4:40pm 1726548003

Anyone else looking at that $189k salary and thinking it's not that much for the responsibility and public abuse that goes with it? Certainly wouldn't get me interested.

Maybe there are other perks.

by Advisor | 17th Sep 24, 4:55pm 1726548956

Fair point. That's the pay equivalent of a mid-level manager at a large corporate. You probably wouldn't get top or even second-grade C-suite talent if you were to double that pay.

That's why we get such numpties running our local gov who can't make sound decisions with other people's money.

by JimboJones | 17th Sep 24, 5:08pm 1726549723

Yes its very low isn't it! Pay peanuts...

by Hans Brink | 17th Sep 24, 7:29pm 1726558185

Yeah it sounds like low pay but is it really. It's not like one has to go thru a job interview. Just put your name forward and if enough people like the look/sound of you, hey! your in. Then maybe the winner performs, or not.

Sort of like a lottery really.

by KH | 17th Sep 24, 9:17pm 1726564653

Pay big and you still get monkeys. Plenty of examples.

by JamesM | 17th Sep 24, 5:24pm 1726550654

Interesting to compare it to the salary for the Wellington Council CEO- $500K

by K.W. | 17th Sep 24, 5:43pm 1726551804

Its not bad money considering she hardly turns up for work

https://www.nzherald.co.nz/nz/wellington-mayor-tory-whanau-says-attenda…

by Foxglove. | 17th Sep 24, 5:50pm 1726552251

With or without the comfort dog?

by TronMVP | 17th Sep 24, 6:00pm 1726552847

Also she is delusional, thinking she is a young woman, and that is the reason for the criticism!

by JimboJones | 17th Sep 24, 7:20pm 1726557640

Well it kind of is. If she was old and crusty and believed in last centuries ideologies she would be loved by the loud boomer mob.

by TronMVP | 17th Sep 24, 9:38pm 1726565891

Young is 18-35

She is 40

I know that's not quite a boomer, but she ain't young. She think she is, and that's why she likes to party every Saturday night.

by The Person | 17th Sep 24, 10:47pm 1726570075

She's a hell young compared to what Aucklands got, that guy looks like he's about one step from the grave when you see him in person.

by pacifica | 17th Sep 24, 11:03pm 1726571039

For the actual work she does and the ease for setting up a SM filter she is well over paid by $150k. At this point hiring anyone else would be a net benefit even if they did not show up to most meetings. She has turned her role purely into a media driven job where most is bad press. If anything even hiring a shutin who has never worked a day in their life would be an improvement. I am sure there are many of the beneficiaries looking for work who would love a crack at $189k for little work and all they need to do is not be a social & financial screw up; even having low interactions at work would do the job. Sadly most beneficiaries don't have the financial backing to set up election campaigns and attend events (many cannot even afford to attend GP appointments).

Seriously at $189k there is something seriously wrong with the person to not manage a high roller lifestyle in Wellington. Add the lotto win on top and it just blows the warning lights and starts multiple fires.

by dumbthoughts | 17th Sep 24, 5:07pm 1726549654

I like Wellington as a place and always enjoy visiting, but many of its residents and ratepayers seem to have a fetish for this kind of thing ... they love it.

by RookieInvestor | 17th Sep 24, 5:25pm 1726550732

She cant manage a city or her finances.

by IT GUY | 17th Sep 24, 6:23pm 1726554232

Many master only fans first

by pacifica | 17th Sep 24, 11:06pm 1726571194

She already is the worse type of person with low ethics who demonizes the ADHD community just to get sympathy for her own bad behaviour and seek media attention. Poor financial management and lack of skills just add to the character profile that should have no position in managing a small shop with staff let alone a city council with severe infrastructure and financial issues. But Tony has shown she is all and only about her media profile. Setting herself up at the expense of others. Her narcissism is so substantial it is hard to see anything else behind her actions.

by FCM | 17th Sep 24, 4:12pm 1726546366

Meanwhile the Wellington major has to sell a vehicle to make ends meet. This is after her 180k plus a year salary and winning over a million in lotto. Lets just hope she has no financial say in the finances of Wellington.

by talking sense | 17th Sep 24, 4:45pm 1726548307

well there is a general lack of knowledge about where money actually comes from in Wellington

Most believe it comes from lobbying

by J.C. | 17th Sep 24, 4:17pm 1726546664

Vampire Squid (Goldman Sachs) has faced significant financial challenges in its consumer banking sector, incurring over $6 billion in pre-tax losses since 2020. This downturn is largely attributed to high charge-off rates in its credit card business, particularly with the Apple Card, which has seen charge-off rates nearly double those of competitors.

Currently, Apple Card credit card balances total $17 billion. The Wall Street Journal says that Goldman Sachs could face even bigger losses when it offloads the Apple partnership than the losses associated with the GM sale to Barclays.

https://9to5mac.com/2024/09/10/apple-card-losses-goldman-sachs/

by IT GUY | 17th Sep 24, 4:24pm 1726547089

I am crying a river.

by Te Kooti | 17th Sep 24, 4:43pm 1726548234

Squid aren't as good as many think they are....

by IT GUY | 17th Sep 24, 7:16pm 1726557387

garlic butter and chilli flakes are ok

by Squishy | 17th Sep 24, 4:53pm 1726548810

The Financial Markets Authority has filed criminal proceedings against a junior Heartland Bank employee for alleged insider trading...

Heartland Bank Employees, I'm seeing a risk and compliance module in your future about using insider knowledge for nefarious purposes.

Used to be the customers got announcements and knew more about the bank than the staff did. You'd call the bank and ask about a special deal they where doing and they'd put you on hold while they read the e-mail.

by IT GUY | 17th Sep 24, 7:17pm 1726557456

guessing it was around the aussie purchases

by General Comment | 17th Sep 24, 4:54pm 1726548853

Although it isn't yet reflected in their financials, farmer confidence continued its upward trend in August

8.4mm of rain in the paddocks today, first decent number on the weather station since drilling crops nearly a fortnight ago. Should be seeing green shoots in a few days' time*. Mood is on the up in September!**

* Apologies to property fans.

** Again, apologies...

by TronMVP | 17th Sep 24, 5:11pm 1726549917

No need to apologize! Swap rates for 2 years are diving at the moment, close to 3.5%. Won't be long till 2 year retail mortgage rates are 5%. It's looking good for investors, except for the 1% who need to sell.

by gnx | 17th Sep 24, 6:28pm 1726554484

if inflation dips?

just got told by the girl stocking shelves that prices are going up on a lot of things...chips this week

watch the big brands muscle their pound of flesh

by IT GUY | 17th Sep 24, 7:18pm 1726557538

inflation levels at 2.99%

by easymoney | 17th Sep 24, 5:23pm 1726550605

Yes the moisture map above is looking pretty good.. Those lake levels must be rising..

by solardb | 17th Sep 24, 5:29pm 1726550965

I wouldn't apologize too much, your probably paying tax on your gains, they probably aren't.

by redcows1 | 17th Sep 24, 7:01pm 1726556508

Hard to get excited ATM, it's freezing cold out there. Grass is looking out and saying stuff that I'm outa here.

Actually the season has started ok. Just need Fonterra to join the party and announce a $8 plus payout for last season.

by kiwikidsnz | 17th Sep 24, 7:25pm 1726557930

I drove up the NI, Wgtn to Auckland yesterday (via Rotorua because NZTA have closed Taupo / Wairaki to Atiamuri daytime for a couple of weeks). Never seen it so green everywhere.

by Hans Brink | 17th Sep 24, 7:37pm 1726558655

Corr GC only 8.4 mm. We are on nearly 84mm and rising in the last 7 days!

by General Comment | 18th Sep 24, 7:02am 1726599779

Ended up with 13.4mm. Don't want too much all at once on flat cropping land. Looking dry for the next week then a bit more rain. Perfect.

ETA: Looking out at the crop paddocks I can see green patches starting to form. Sun is up, wind is gone. Awesome start to the day.

by ChrisOfNoFame | 17th Sep 24, 5:32pm 1726551175

We are at, or near, one of those "inflection points" (yet) again. Bears vs. Bulls.

by J.C. | 17th Sep 24, 5:51pm 1726552278

Do not fear little one. Uncle Jerome and Lord Orr will take care of everything and everyone.

by profile | 17th Sep 24, 8:25pm 1726561531

Back using diesel tonight. Why utilise our natural gas when we can burn diesel and jungle coal.

https://www.transpower.co.nz/system-operator/live-system-and-market-dat…

by The Person | 17th Sep 24, 10:52pm 1726570377

No diesel at the moment. Would be very unusual given hydro lakes are above average for this time of year. I thought diesel was our most expensive generation? Maybe they just need to fire it up every now and then to prove it works. Keeps seeing weird stuff like this, like burning coal last week when the spot market price was $0.01 / mWh.

by IT GUY | 17th Sep 24, 11:38pm 1726573085

do they have to fire every certain days?

by Corrupt Practice | 18th Sep 24, 8:47am 1726606078

Re house prices, I remember having to front up 30% deposit and having an eagle eye run over our income that took into account 'possible' pregnancy shortfalls. Would this reign in current house prices from reaching dizzy heights, and of course put in place hefty deposits for those who wish to speculate.