What happened Monday

Economy / news

A review of things you need to know before you sign off on Monday; various retail rate changes, early signs of home demand growth, credit card billing activity weak, China cuts rates, swaps stable, NZD stable, & more

21st Oct 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
Resimac have reduced all its home loan rates, including its floating rates (but only -25 bps). (Remember, Resimac is not accepting new business at present.) The Police Credit Union, and WBS both trimmed two fixed rates. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ cut its six, nine, and 12 month TD rates by -20, -10 and -5 bps respectively. WBS and the Police Credit Union also cut rates. All updated rates less than 1 year are here, for 1-5 years, they are here.

BANKS EXPECT TO SEE RISING HOME LOAN DEMAND
The country's banks are reporting early signs of a rebound in activity from property investors and demand for mortgage lending from both owner occupiers and investors is expected to continue to increase during the next six months.

A BIT OF A BACKWATER NOW
September credit card billings were nothing to write home about, reflecting the quient retail markets. But they haven't fallen out of bed either. But they are down -4.3% from a year ago (not a boom time either) and down -2.8% from two years ago. These are based on nominal billings, so the 'real' declines will be greater. Credit quality as measured by the proportion of users succumbing to paying credit card interest, is also little-changed at 53.1% of all balances which remains near the bottom end of its historic range.

NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Tourism Holdings and Vital Healthcare recover while Vulcan Steel extends gains. Vista and Channel Infrastructure slip.

CHINA MAKES OUTSIZED RATE CUTS
The Chinese central bank has cut its Loan Prime Rates by more than expected, cutting the 1 year by -25 bps to 3.10% and the five year by the same amount to 3.60%. These are record lows. The one year rate is the benchmark for most corporate and household loans, the five year rate the benchmark for mortgages.

SWAP RATES HOLD LOW
Wholesale swap rates are probably little-changed today at the shorter end. Our chart below will record the final positions. The 90 day bank bill rate is again unchanged at 4.59%. The Australian 10 year bond yield is up another +2 bps to 4.34%. The China 10 year bond rate is up +4 bps at 2.12%. The NZ Government 10 year bond rate is up +3 bps from morning at 4.49%. And the earlier RBNZ fix was at at 4.4% and down -1 bp from Friday. The UST 10yr yield is now at 4.08% and unchanged from this morning. Their 2yr is also holding at 3.96%, so that curve is stays positive by +12 bps.

EQUITIES MARK TIME, EXCEPT IN CHINA
The NZX50 is now down just -0.1% in late Monday trade. The ASX200 is up +0.6% in afternoon trade. Tokyo is up +0.1% at its Monday open. Hong Kong is down -1.1% at its open. Shanghai started down -0.6% at its open, both dropping after the LPR announcement. Singapore is trading down a very minor -0.1%. Wall Street is signaling via the S&P500 futures that it will open tomorrow up +0.8%.

OIL LITTLE-CHANGED
The oil price is unchanged from this morning at just over US$69/bbl in the US, and just under US$73/bbl for the international Brent price.

CARBON PRICE HOLDS
The carbon price held today at $62.50/NZU. But there were unusually heavy volumes traded today. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD EYES US$3,000/oz
In early Asian trade, gold is up +US$5 from this morning, now at US$2726/oz and a new all-time high.

NZD LITTLE-CHANGED
The Kiwi dollar is up +10 bps from this morning, now at 60.8 USc. Against the Aussie we are down -10 bps at 90.4 AUc. And against the euro we are up +10 bps at 56 euro cents. This all means the TWI-5 is essentially unchanged from this morning at just under 69.2.

BITCOIN BACK NEAR US$70,000
The bitcoin price is up another +1.0% from this morning, now at US$69,242. Volatility of the past 24 hours has been modest at just on +/- 1.0%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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56 Comments

by J.C. | 21st Oct 24, 4:19pm 1729480786

The mighty Stanley Druckenmiller has revealed that he is shorting U.S. Treasury bonds. Bets against U.S. government bonds now account for 15% to 20% of Druckenmiller's portfolio.

Druckenmiller thinks inflation could surge to levels seen in the 1970s. Might take 6 months. Might take 6 years. Definitely contrarian to any water cooler narratives. But with this kind of announcement, hardly any surprise precious metal markets are active.

https://www.fool.com/investing/2024/10/20/does-stanley-druckenmiller-kn…;

by Te Kooti | 21st Oct 24, 4:31pm 1729481464

Mr Druckenmiller also just said Trump has won the election and that markets will continue to rally, betting odds are saying the same.

I'll just leave this here for the lolz haha https://www.youtube.com/watch?v=wDYNVH0U3cs

by J.C. | 21st Oct 24, 4:43pm 1729482226

It was Stanley Druckenmiller who passionately talked about money printing hurting poor people back in 2021.

"I don't think there has been a greater engine of inequality than the Federal Reserve Bank of the United States in the last 11 years, so hearing the Chairman (Jerome Powell) talking about visiting homeless shelters is very rich indeed"

Those benefiting from money printing are the haves who know how to navigate the market. I just had the best year I've had in 15 years last year. Everyone wealthy I know is making a fortune and why are we making it? Because this guy (Powell) is printing money like there's no tomorrow. The kids in Harlem in my opinion are not benefiting from money printing but Stan Druckenmiller and other wealthy people are."

http://www.xinhuanet.com/english/northamerica/2021-05/22/c_139962648.htm

by Te Kooti | 21st Oct 24, 4:57pm 1729483029

Can't disagree with any of that, QE benefits assets owners.

Also, on a separate note, I think Golriz should have been discharged without conviction so she can practise law again. She is finished as an MP but not to be able to return to law feels too harsh. We have all made mistakes, she deserves a second chance.

by Mr_Jolly | 21st Oct 24, 5:07pm 1729483654

From the RNZ article...

"Justice Venning said there was no evidence to show that the Law Society wouldn't approve her application for a practising certificate based on her conviction.

He said there was also no evidence to show whether her conviction would affect her application for jobs at the International Criminal Court."

by Te Kooti | 21st Oct 24, 5:09pm 1729483792

I read a contrary opinion, sounds like it may be ok afterall.

by Foxglove. | 21st Oct 24, 5:25pm 1729484720

In an ironical sense, and in consideration of other unruly developments in the Greens of late, this young lady may have offered better calibre and qualification than many of her contemporaries there. To back that up current speaker Mr Brownlee has been on record as both supportive and appreciative of her ability. It cannot be doubted that she was highly troubled and harmed by external public pressures but given the rancorous and unseemly outbursts, the white cis male, the cry baby and the crossing of parliaments floor, it is suggestible at least, that a culture, vexatious and vindictive, seething amongst the Greens played its part as well.

by powerdownkiwi | 21st Oct 24, 6:41pm 1729489304

The young - greens included - are trying to make sense of their world.

The narrative they've been peddled - economic growth lifts all boats, indefinitely, and can pay for environmental repatriation - was a lie.

The one they're concocting, is not particularly accurate either, but fits. No chance of children, so the sex of a partner is irrelevant. No chance of gaining material wealth (the prior generation are rentiering off them so hard they won't make headway) so no need to get a car license, no need to save for a house. No point going into student debt to support some Professor's salary, either; no guarantee of income commensurate with the debt.

And they can see the plate of s--t they've been served.

Stones, glasshouses, Foxglove....

by Foxglove. | 21st Oct 24, 7:34pm 1729492462

Anger, as you well know from an educational direction at least, is self defeating and destructive. History is not short of it and contributors, every revolution on record for instance. Anger leads to violence as our courts well illustrate but you will not quell anger, anymore than address its origins and reasons, by leading in anger.

ps.There is insinuation and personalisation in your post for which you have neither knowledge nor grounds.

by Pa1nter | 21st Oct 24, 8:22pm 1729495335

The consolation (if there is one), is that there's a very strong historic correlation between the age of a population, and it's propensity for wide scale civil unrest or revolution.

And most populations are getting pretty old.

by profile | 21st Oct 24, 6:54pm 1729490045

She is not a young lady foxy, not even milf - she is 43. Too late to play the youth card.

by Foxglove. | 21st Oct 24, 6:58pm 1729490307

Relative to me though, she is youthful.

by profile | 21st Oct 24, 7:18pm 1729491504

Shoplifting at 43 is more mad cat lady than youthful exuberance. Particularly when you have elevated yourself to the position of MP and lawyer.

by agnostium | 21st Oct 24, 7:15pm 1729491346

43 is young for politics. But obviously you can only see women as sexual objects given your MILF comment.

by kiwikidsnz | 21st Oct 24, 5:35pm 1729485354

NZdrs are generally a pretty forgiving bunch if people own their own mistakes honestly & openly & make an effort to apologize & consciously do better in future

...& don't appreciate being lectured on their intolerance by people who apparently faked their way into the country as (economic) refugees, enjoyed & maximising the benefits and privileges which they then abused & claimed self serving excuses for their misbehaviour.

The penalty for theft in Iran:

https://www.rferl.org/a/iran-prisoner-fingers-amputated-human-rights/32…

by profile | 21st Oct 24, 7:47pm 1729493234

especially when they stopped over in Malaysia en route to NZ asylum. Malaysia not good enough?

by J.C. | 21st Oct 24, 5:20pm 1729484440

I think Golriz should have been discharged without conviction so she can practise law again

Agree that she should be able to practise law again. Being discharged without conviction is really a lottery. However, Golriz is no more special than anyone else. her lawyers obviously didn't present her case well enough or were convincing enough.

by profile | 21st Oct 24, 5:23pm 1729484597

I think Golriz should have been discharged without conviction so she can practise law again

She might garner more sympathy if she hadn't spent her sanctimonious career lecturing other people about what to say, eat, do, think.

by J.C. | 21st Oct 24, 5:43pm 1729485795

Agree. I once had a discussion with Nandor Tanczos about Sharp Corporation and the work they were doing with photovaltaics. Nandor said Sharp couldn't be part of any solution for the simple fact that they're a corporation.

by pigeonbox | 21st Oct 24, 6:46pm 1729489571

I doubt he said that.

by J.C. | 21st Oct 24, 6:58pm 1729490318

That's OK. You can doubt.

by agnostium | 21st Oct 24, 5:43pm 1729485839

Also, on a separate note, I think Golriz should have been discharged without conviction so she can practise law again.

What a refreshingly, compassionate statement. Good on you.

by talking sense | 21st Oct 24, 5:46pm 1729486005

the law is an ass ... so she is arguably even more suited to practice it now

by streetwise | 21st Oct 24, 7:23pm 1729491788

Obviously, nobody on this site has owned their own retail business. There is nothing more disheartening than shop-lifters. The fact that Golriz was a prominent MP is not suprising. You would be gob-smacked if you knew how widely the background of these rat-bags varies......eg, in my experience: two Japanese exchange students, transvestites, South-eastern Asian women, tattoed Polynesian women, children of all backgrounds, white trash......are just a few that come to mind.

Often, they 'hunt' in packs. Often you can sense that something's amiss but you can't keep an eye on everyone at once and it's only when the shop has cleared that you realize that something's missing that wasn't paid for.

There is a misconception out there that everybody who owns a shop must be wealthy but that's uncommon, especially nowadays with the proliferation of supermarkets, malls and big-box chains (mostly Australian owned.) I think that Golriz must have had this sort of chip on her shoulder: " I'm only taking from the rich shop owner.....I deserve this as I'm only a lowly-paid (?) MP".

by bw | 21st Oct 24, 4:35pm 1729481746

"GOLD EYES US$3,000/oz" It does. And a probable ATH today of NZ$4,500 as well.

At US$3,000 in all likelihood that will see it at NZ$5,000.

by J.C. | 21st Oct 24, 4:43pm 1729482180

Silver is one of the most manipulated markets out there. There will be some crazy unwinding if this really gets going. Bank of America has massive short positions., but this is ignored or written off as conspiracy theory or the stuff of Wall Street bets.

by solardb | 21st Oct 24, 4:43pm 1729482198

Re the Americas Cup, i did a quick search of the sports sections of the 3 or 4 international news sites I read , not even a mention.

Pouring money into hosting it here might be nice , but I doubt it pays back.

by JimboJones | 21st Oct 24, 5:06pm 1729483565

If every NZer put $1 a year into it, that would be $20 mil every 4 years. Not sure if that’s enough or not.

by Zwifter | 21st Oct 24, 5:14pm 1729484083

Nope we lose hundreds of millions running it here, totally the wrong time zone and you cannot get advertising its a waste of time. Have to say its a sport for the rich and leaves no decent facilities for the locals after the event. Better off building a decent Formula 1 circuit and stealing the event from the Australians.

by kiwikidsnz | 21st Oct 24, 5:26pm 1729484787

Alternatively, its worth a billion?

https://www.nzherald.co.nz/business/economy/does-the-cost-of-americas-c…

https://www.nzherald.co.nz/sport/americas-cup-barcelona-on-track-to-hit…

by agnostium | 21st Oct 24, 5:45pm 1729485914

That's in Barcelona not here, and it's easy to fudge the economic benefits.

by kiwikidsnz | 21st Oct 24, 5:46pm 1729486013

Read the first link.

by Zwifter | 21st Oct 24, 6:05pm 1729487150

Pretty sure the last time we ran it here it was a huge financial loss.

by kiwikidsnz | 21st Oct 24, 6:18pm 1729487917

Covid, associated international travel / flight restrictions & lockdowns had a definite one off impact

by agnostium | 21st Oct 24, 6:35pm 1729488902

I read both links. The first was projected benefits if the event were held in Auckland and they were disputed.

The second was projected benefits in Barcelona.

This stood out, don't tell Simeon Brown as he'll cancel one of the RONS as the event may be even more of a loss and he appears to love throwing money away on projects that lose money.

Auckland’s economy alone was left with a financial deficit of $146m following the event - with a financial return of 72 cents back for every dollar put in.

by kiwikidsnz | 21st Oct 24, 6:36pm 1729489013

Covid

by Zwifter | 21st Oct 24, 7:01pm 1729490481

Nobody is going to travel all the way here to watch it mate, Spain is in the middle of Europe, its a cheap destination to fly to and surrounded by countries with massive populations and is used to tourism.

by Foxglove. | 21st Oct 24, 8:37pm 1729496237

Veteran, who cares what’s a stay and what’s a halyard , commentator Mr Montgomery was coughing up early morning tacks, not nautical ones, when interviewed about what seemed to him as a personal betrayal of all that he has contributed. What suits him it would seem should suit everybody and especially the self adorned fame of his many publicly funded junkets at the many said regattas. Still all credit for never letting go of one’s ego.

by bw | 21st Oct 24, 7:17pm 1729491428

Let's spend $220 million hosting this sucker, and we can get the unemployed meat workers from Timaru etc to put on hi-viz jackets and escort the rich and famous to their allotted hospitality tents.

If $32 each was criticized earlier today for providing canapés at the hospital workers conference, how is this any different except bigger?

There's a time and a place for events like this to be announced and hosted, and neither of those is right for New Zealand in the near future. (NB: This would be the Commonwealth Games that Melbourne bid for and won, only to realise it makes no sense, and cancelled the deal.)

by redcows1 | 21st Oct 24, 7:48pm 1729493306

Listening to Ian Taylor on rnz and couldn't help but think about NZ productivity problem. America's Cup bringing tourism here is low wage low productivity, which seems to be all we aim for.

Where as show casing hydrofoil chase boats, state of the art sports graphics , electric bikes etc, his list is long, in a city in Europe is pushing high wage/productivity industry. Isn't this what we want?

by powerdownkiwi | 21st Oct 24, 8:41pm 1729496495

I was a fan of sailing hydrofoils, a million years ago. The Grogono's Icarus, Niggs' Exocoetus (spelling from memory); Williwaw (that flew the Pacific). Way back when, I co-built the world's 5th (as far as I know) biplane-rigged cat.

And if I was a young sailor again, foiling would be where I'd go; Wasp or Moth, probably.

But it is a technology which is at the front end of modernity - will we still be doing carbon fibre layups in epoxy resins, post bottleneck? I doubt it.

by Pa1nter | 21st Oct 24, 9:10pm 1729498247

"Post bottleneck", the rich will still be partaking in such activity.

The swathes of disenfranchised you mentioned above will just get by on whatever crumbs are sprinkled on them.

by agnostium | 21st Oct 24, 9:45pm 1729500357

The swathes of disenfranchised you mentioned above will just get by on whatever crumbs are sprinkled on them.

You seem to imagine that the swathes of disenfranchised will be happy to sit back disenfranchised forever. I would argue that they have been in recent years because although they got an increasingly small proportion of the pie they still got some pie. In the world that is coming there will be no pie to give them.

In pretty much every other historical situation this has occured in the past it has resolved itself in one of two ways:

The powerful give up some power and a bigger proportion of their wealth and redistribute it across society or
They get their heads chopped off after massive civil unrest and societal revolution

I'd rather not have my head chopped off thank you very much.

by Pa1nter | 21st Oct 24, 10:12pm 1729501965

As I mentioned above, the chances of a decent revolution in an aged society are fairly low and decrease as it gets older - and the trend set up for the rest of the century is for societies to get even older..

And many societies around the world can trot along for a very long time with a small cadre of ultra rich lording it over masses of disenfranchised. That's actually the most common form of civilisation for much of humanity's history. The promise of overthrow being rare - that's what requires the imagination.

So chances are on for ever diminishing financial outcomes for most.

by Baywatch | 21st Oct 24, 10:34pm 1729503250

Seems half of NZ was at the event... Would make sense to have it back here in Barcelona but I think Jedda has too much dosh to throw at it , and Dalts love the $$$$

by Baywatch | 22nd Oct 24, 2:10am 1729516255

Brown will moan on about being an Engineer and fixing things like rubbish bins, older Aucklanders will moan about cycleways and pedestrian crossings while the world moves on

by Pa1nter | 21st Oct 24, 6:07pm 1729487270

leaves no decent facilities for the locals after the event.

Not promoting having the cup here, but arguably the Auckland Viaduct/Waterfront wouldn't be what it is without the cup.

by HouseMouse | 21st Oct 24, 5:10pm 1729483851

Yeah, I like the America’s Cup but the vast majority of the world has no interest in it. Like rugby

by kiwikidsnz | 21st Oct 24, 5:21pm 1729484495

Like these, the BBC also had it briefly mentioned in their Sports section - it would have been all over the world web had the Brits or USA won

https://www.nzherald.co.nz/sport/sailing/americas-cup/americas-cup-how-…

Dalts would be mad to return to nz after the way he was treated by MBIE

by Mr_Jolly | 21st Oct 24, 7:41pm 1729492888

I see Helen C seems to be a fan of using the money tree to host an AC here. I assume because she knows it wouldn't be at Eden Park.

by Baywatch | 21st Oct 24, 10:35pm 1729503305

No sign of Luxy here but Hooton was running around like a Looney

by rastus1 | 22nd Oct 24, 8:47am 1729540045

Family member in London said it doesn't exist in their press.

by Pa1nter | 21st Oct 24, 6:00pm 1729486858

https://youtu.be/wsOp4PJ9Fk0?si=gWYi7iJNB23aRRe0

Half hour interview with potential Labour leader Barbara Edmonds.

Seems a good sort but holy cow most answers to serious questions are "we'll have to see what the committee says".

So basically we don't get leaders anymore, just a central figure trickle feeding groupthink decisions to us.

by Let me be Frank | 21st Oct 24, 7:11pm 1729491097

She's a tax lawyer...what did you expect?

Sounds like a v nice person but not exactly visionary.

The most important thing is to be (re) elected, not devise a better system.

by J.C. | 21st Oct 24, 6:20pm 1729488048

Billionaire and Mineral Resources CEO Chris Ellison (originally from NZ) allegedly evaded tax for years and gets to cut a deal with the ATO to avoid punishment.

Good journalism on an incredible life story and what people go through to avoid paying taxes.

https://www.afr.com/companies/mining/chris-ellison-s-offshore-secret-20…

by kiwikidsnz | 21st Oct 24, 6:29pm 1729488571

Thanks for your link

"Chris Ellison boasts a brilliant career track that was recognised in 2022 with an investiture as a member of the New Zealand Order of Merit for his services to New Zealand-Australia relations."

🤣🤣🤣