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
There are no changes to report today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
China Construction Bank trimmed their term deposit rates today. All updated rates less than 1 year are here, for 1-5 years, they are here.
CROWN ACCOUNTS SHOW VULNERABLE POCKETS
The Crown accounts to September 2024 revealed some interesting detail, mainly where the weaknesses are showing up. GST receipts are down -3.9% from the same period a year ago, and came in below the Governments BEFU forecast. Taxes on workers is holding up as expected, but company taxes are dragging, down -10.6% from a year ago, and below that BEFU forecast. "Other direct taxes" are up strongly, up +27% principally because of higher collections from withholdings on interest income.
MORE KIDS, MORE CROWDING
2023 census data released today shows that Auckland is the center where most households have families (64.5%), matched only by Gisborne. Gisborne has seen a surge in household crowding since the last census. Auckland household crowing is also high, but actually improved in those same five years. The centers with the least number of children are Marlborough and the West Coast (less than 47%) - and these centers have the least crowing. One person households were stable at 22.8% of all households. More here.
POPULAR BUT WITH HIGHER YIELDS
The latest NZGB tenders offered $500 mln in three maturities, and got bids of $1.41 bln. There were 42 successful bids with 68 unsuccessful. Yields to maturity rose in all cases.
NZX EQUITY MARKET UPDATES
Check out our quick update of how the NZX is faring today, as at 3pm. NZX, Fletcher Building, and Tower lead gains while The Warehouse, Kathmandu, and Investore Property decline
PROFIT STANDSTILL
BNZ's net profit holds unchanged at $1.5 bln for the year to September, driven by lending and deposit growth but offset by lower net interest margins and higher operating costs.
WHAT TO WATCH NOW
The world's financial markets are bracing for the consequences of higher US yields, a higher US dollar, and higher US inflation. All these are starting to be priced in. After betting as low as 3.63% in mid September, the UST 10 year is now 4.44%, an +80 bps rise in just six weeks. The rise started when the 'Trump Trade' became a thing and is now only getting started. The USD's trajectory is less certain; it has appreciated +5% since the start of September, with +2% of that since the election result became clear. This is based on a pull-back by international US investors for 'safety' reasons. But it is unlikely to be sustained in an inflationary burst. Inflation expectations are the next thing to watch, not so much consumer expectations (because they will be as uninformed as the voting public) but producer inflation expectations, and PMIs are the best way to track those.
MARKET RATES FOR SOE DIRECTORS
The Government is bringing director fees for 22 Crown-owned companies closer to market rate in order to retain and attract high quality directors, State Owned Enterprises Minister Paul Goldsmith said. “Ordinary directors’ fees for these companies have been largely static for more than 15 years and have fallen significantly below market rate, some by up to 56%. This is creating a major barrier to attracting and retaining directors with the commercial skills needed for Crown boards," he said.
AUDITOR-GENERAL RELEASES NEW REPORT ON GLOBAL CLIMATE CHANGE ASSESSING TOOL
Auditor-General John Ryan says national audit institutions are getting involved on a global scale in order to better assess government responses to climate change. The Office of the Auditor-General (OAG) released another climate-focussed report on Thursday which assessed New Zealand’s climate change response using review methodology that the OAG helped develop with a group of audit institutions. The NZ assessment found that more needs to be done to progress plans around reducing emissions and adapting to climate change in certain sectors. Another key finding was that public reporting on spending for climate initiatives needed to be improved. “As I have noted elsewhere, the current structure of financial reporting in the public sector rarely provides information in a way that allows Parliament and the public to connect the goals the Government is trying to achieve with public spending and reporting on progress. Climate change is no exception,” Ryan said.
TRADE RETREAT
Both exports and imports fell in Australia in September, something of a surprise. Their export levels fell back to December 2021 levels, and their import levels retreated when September is usually when they peak.
SWAP RATES MOVING
Wholesale swap rates are probably moving around a bit today, but we don't have good fix at present. Our chart below will record the final positions. The 90 day bank bill rate is up +2 bps at 4.48%. The Australian 10 year bond yield is up another +4 bps from this time yesterday at 4.69%. The China 10 year bond rate is up +1 bp at 2.13%. The NZ Government 10 year bond rate is up +8 bps from this time yesterday, now at 4.73% while the earlier RBNZ fix was at 4.66% and up +12 bps from yesterday. The UST 10yr yield is now at 4.43% and up +3 bps from yesterday. Their 2yr is up +10 bps at 4.26%, so that curve is now more positive, by +16 bps.
EQUITIES MIXED
The NZX50 is essentially unchanged in late Thursday trade. The ASX200 is down -0.3% in afternoon trade today. Tokyo has opened with a +-0.4% slip. Hong Kong is up +0.2% at its open. Shanghai is also up +0.2%. Singapore is up +1.2%. Wall Street was up +2.5% on the S&P500 in Wednesday trade, after the US Presidential Election results.
OIL MARGINALLY FIRMER
The oil price is up +50 USc from yesterday, still just on US$72/bbl in the US, and just on US$75.50/bbl for the international Brent price.
CARBON PRICE STAYS FIRM
The carbon price is little-changed today, still at $63.50/NZU in modest trade. But that is still the highest level in almost 8 months, since mid-March. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DROPS
In early Asian trade, gold is down -US$101 from yesterday at this time, now at US$2648/oz.
NZD FALL FURTHER
The Kiwi dollar is down -20 bps from this time yesterday, now at 59.5 USc. Against the Aussie we are also down -20 bps at 90.4 AUc. And against the euro we are also up +40 bps at 55.5 euro cents. This all means the TWI-5 is down a bit more than -20 bps at 68.4.
BITCOIN JUMPS AGAIN
The bitcoin price has risen +5.9% from this time yesterday, now at US$75,421. Volatility of the past 24 hours has been high at just over +/- 3.9%.
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