A review of things you need to know before you sign off on Friday; some notable retail rate changes, consumer sentiment rises on hope, foreigners hold less of NZ, swaps stable, NZD firm, & more

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
Heartland Bank told clients it is cutting its fixed rates sharply soon. SBS Bank has cut most of its fixed rates too. More here. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Westpac has raised its 5 month rate by +30 bps to 5.70%. SBS Bank has trimmed its 1, 2, and 3 year TD rates. All updated rates less than 1 year are here, for 1-5 years, they are here.

CONVINCED THE FUTURE WILL BE BETTER
The September ANZ-Roy Morgan Consumer Confidence survey rose slightly, its third straight month of improvement. Even though it it is still well below par, it is at its highest level since January 2022. The lift was driven by expectations about the future, rather than views of the here and now. Meanwhile this same survey shows inflation expectations were unchanged at 3.8%. Expected house price inflation lifted from 2.8% to 3.2%, led by the North Island.

AUCKLAND COUNCIL REPORTS
Auckland Council released its Group accounts today. They want you to know they spent "invested a record $3.2 billion in assets such as the roads, pipes and buildings used to provide services", +$487 mln more than in the previous year. “A big positive has been that our costs are under control and we’re back on track getting ourselves in a good position to tackle some of the big physical and financial challenges council has been facing for too long,” Mayor Brown says. The financial statements accompanying them shows revenue from Rates was up +10.7%. Total revenue was up +7.7%. Total expenditure was up +23.7%. Their surplus was almost halved to $584 mln. It's an organisation with $74.4 bln in assets. (See pages 52, 53.)

'WE AGREE'
Westpac has upped its milk payout forecast to $9/kg, matching Fonterra's recent increase.

NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Strong gains by a2 Milk, Kathmandu and Serko. But FBU keeps falling with Turners and Spark

BUILDING LONG-TERM IMPROVEMENTS
StatsNZ today released its detailed data on our "net international investment position" (IIP) - what we owe the rest of the world. As at March 2024 that is just a touch shy of $200 bln, the most ever. The detail shows that foreign companies have equity investment positions in New Zealand of $171 bln, also a record high. But our economic activity has grown. And since 2000, the proportion of IIP is now near its lowest in relation to GDP (-48.5%), and the proportion of equity ownership in enterprises here is also near its lowest on the same basis (42%). Respectively, net IIP was -84% in 2009, and foreign ownership was 51% in the same year. So steady progress that has meaningfully shifted these relationships for the better.

BIG FISCAL BAZOOKA COMING
As you know, we keep an eye on what is happening in China. Leading economist Ren Zeping (任泽平) believes the recent round of mass loosening measures unveiled by the Chinese central bank is paving the way for fiscal stimulus of at least ¥10 tln (NZ$2.2 tln). What we have had from the central bank is just the warmup act. But the effectiveness of monetary policy is thought in Beijing to be about exhausted. Now they will issue a mountain of bonds (fiscal policy, effectively money-printing), and about half of that could go towards propping up housing and the property development sector.

FROM POLICY DECISIONS TO ACTION
Still, the signaled changes from the People Bank of China are now being rolled out. Today they cut the seven-day reverse repurchase rate by 20 bps to 1.5%. They also cut the reserve requirement ratio (RRR) by 50 bps, the second reduction this year, bringing the weighted average RRR for financial institutions to around 6.6% after the cut.

WHY STIMULUS IS NEEDED, REASON #13
The Hong Kong and Shanghai equity markets may be roaring, in anticipation of the coming stimulus. But Chinese industrial profits are weak. For the eight months to August, they are a touch less than for the same period last year. For August alone they were -23% lower than the same month in 2023.

NO STIMULUS NEEDED HERE
In Taiwan, consumer sentiment rose in September to its highest level since March 2020. The independent island nation is an uncomfortable mirror for its huge neighbour.

WE ARE ON THEIR RADAR TOO
The Chinese Ministry of State Security (MSS) used its WeChat account to criticise New Zealand for its recent report describing the PRC as a “complex intelligence concern”. According to the MSS, the NZ report “openly smears the broader overseas Chinese community and students. Following the release of this report, some overseas Chinese in New Zealand have been subjected to harassment and intimidation by so-called New Zealand "intelligence personnel.“ The agency also warned New Zealand: “Whether out of imagination, ulterior motives, or instigation by external forces, creating contradictions and differences between China and New Zealand and pushing someone else's agenda will not solve any of one's own problems, but will instead harm one's own interests and bilateral relations.”

SWAP RATE HOLD
Wholesale swap rates are probably little-changed today at the short end. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 4.90%. That remains its lowest level in ten months. The Australian 10 year bond yield is also unchanged 3.99%. The China 10 year bond rate is up +4 bps at 2.09%. The NZ Government 10 year bond rate is down -1 bp at 4.28% and the earlier RBNZ fix was at 4.23% and unchanged from yesterday. The UST 10yr yield is still at 3.79%. However, their 2yr is now at 3.63%, so that curve is less positive, now by +16 bps.

EQUITIES ALL HIGHER
The NZX50 is up +0.4% in its late Friday trade, up +0.5% for the week. Fonterra's share price hit a three year high today. The ASX200 is up a modest +0.1% in afternoon trade. And Tokyo is also up only +0.1%. However Hong Kong is up another giant +2.7% at its open, up +12% for the week so far, but only back to where it was in April 2023. Shanghai is up +1.0%. Singapore is down -0.3% at its open. Wall Street rose in Thursday trade with the S&P500 ending up +0.4%. That was enough to make it a record closing level.

BAD BETS
Regional casinos are having a tough run. The 'house' supposedly "always wins". Not anymore. SkyCity Entertainment is down -20% so far this year. Australia's Star Entertainment's business is down -53%, most of it in the past month. And Crown Reports was delisted in 2022 and has probably lost similar 'value' even after their earlier major flubs. Not very entertaining for shareholders, but others might see it as karma.

OIL FALLS SHARPLY
The oil price is down -US$2.50 from this time yesterday at just under US$67.50/bbl in the US, and now just over US$71/bbl for the international Brent price.

CARBON PRICE HOLDS
The carbon price has changed little today, still at $61.20/NZU. Volumes traded are still light. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD HIGHER
In early Asian trade, gold is up +US$12 from this time yesterday at US$2667/oz and a new high.

NZD MOVES UP
The Kiwi dollar has risen, up +40 bps from this time yesterday to 63.1 USc. Against the Aussie we have risen +10 bps to 91.1 AUc. And against the euro we up +20 bps at 56.5 euro cents. This all means the TWI-5 is now at 70.4 and up +30 bps from this time yesterday.

BITCOIN RISES
The bitcoin price is up +2.5% from this time yesterday, now at US$64,866. Volatility of the past 24 hours has remained moderate at just on +/- 2.0%.

This soil moisture chart is animated here.

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