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
WBS (Wairarapa Building Society) cut its floating rate by -40 bps to 8.1% today. They also trimmed some fixed rates. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
WBS cut term deposit rates as well, the only mover so far today. We suspect there would be TD changes from a major or two on Monday. For example, we hear (from readers who got an advance email) that Kiwibank will be adding +20 bps to its six month TD offer. All updated rates less than 1 year are here, for 1-5 years, they are here.
A WIN FOR THE BIG BANKS
The Government has decided on a risk-based approach to levy funding for the Depositor Compensation Scheme, against the advice of the Commerce Commission. The levies will reflect the likelihood of a DCS payout occurring, the impact of the levy on entity soundness and the predictability of levy payments.
DOWNTURN BOTTOMING OUT
More houses and retirement units are being consented but fewer apartments and townhouses, our comprehensive Q3 review shows.
NOT SEEING INFLATION'S PRESSURE RETURNING
The RBNZ's inflation expectations survey of businesses (M14) reveals fall-backs at all horizons in this quarter's report. Expectations for one-year-ahead annual inflation decreased by -33 bps from 2.73% to 2.40%. Two-year-ahead inflation expectations decreased from 2.33% to 2.03%. Five-year-ahead and ten-year-ahead inflation expectations decreased to 2.07% and 2.03%, respectively. The RBNZ will be pleased with these results.
NZX EQUITY MARKET UPDATES
Check out our quick update of how the NZX is faring today, as at 3pm. The Warehouse Group, Chorus, and Goodman led gains, helping the S&P/NZX 50 rise by +1.3%. But NZX, FBU, and Serko were notable decliners, balancing out the day’s changes
NO MORE WEEKLY UPDATES
MSD have now stopped releasing JobSeeker claims data on a weekly basis. They say their monthly reporting will continue however.
CONTINUING CAUTION
Americans remain cautious taking on new personal debt. That rose by only +US$6 bln in September, a slowdown from the almost +$9 bln rise in August and well below the expected +US$14.5 bln increase. Now the average balance is US$23,087, up from US$18,008 four years ago. These are not actually high levels. (The divisor we used is the total population 18 years and older.)
UNWINDING EXTENDS
For the first time since May 2020, the US Fed saw its balance sheet assets fall below US$7 tln last week. That is a -US$53 bln fall in a month, a -US$2 tln fall since it peaked at US$8.96 tln in April 2022.
LIFE EXPECTANCY FALLS AGAIN IN AUSTRALIA
In Australia, they released life expectancy data today - and it declined for a second straight year. An Aussie born today is expected to live to 83.1 years (boys less, girls more). The years 2021-2023 saw the highest number of COVID-19 deaths with 15,982 in Australia, which was up by 4,100 from 2020-2022. (The emergence of the antivax movement and weird alternative approaches won't be helping either.) As a result, life expectancy has fallen by 0.1 years for men and 0.2 years for women over this period. Despite this decrease, Australians still have a higher life expectancy than many comparable countries, like New Zealand (82.8 years), the UK (82.2 years), the US (77.6 years), and Canada (81.5 years). Today, a 60-year-old Australian man can expect to live another 24.2 years, and a woman another 27.1 years.
SWAP RATES SETTLE
Wholesale swap rates are probably not moving around much today. Our chart below will record the final positions. The 90 day bank bill rate is up +1 bp at 4.49%. The Australian 10 year bond yield is down -7 bps from this time yesterday to 4.62%. The China 10 year bond rate is down -1 bp to 2.12%. The NZ Government 10 year bond rate is also down -1 bp from this time yesterday, now at 4.72% while the earlier RBNZ fix was at 4.66% and unchanged from yesterday. The UST 10yr yield is now at 4.34% and down -9 bps from yesterday. Their 2yr is down -5 bps at 4.21%, so that curve is now less positive, now by +13 bps.
EQUITIES ALL RISE
The NZX50 is essentially up +1.3% in late Friday trade. The ASX200 is up +1.0% in afternoon trade today. Tokyo has opened with a +0.4% rise. Hong Kong is up +1.0% at its open. Shanghai is up +0.7%. Singapore is up another +1.3%. Wall Street was up +0.7% on the S&P500 in Thursday trade.
OIL UNCHANGED
The oil price is unchanged 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 STILL FIRM
The carbon price is little-changed today, very marginally higher at $63.60/NZU in moderate 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 RECOVERS HALF
In early Asian trade, gold is back up +US$53 from yesterday at this time, now at US$2701/oz.
NZD REGAINS SOME
The Kiwi dollar is up +70 bps from this time yesterday, now at 60.2 USc. Against the Aussie we are down -10 bps at 90.3 AUc. And against the euro we are also up +30 bps at 55.8 euro cents. This all means the TWI-5 is down a bit more than -60 bps at 69.
BITCOIN HOLDS HIGH
The bitcoin price has risen a marginal +0.7% from this time yesterday, now at US$75,963. Volatility of the past 24 hours has been modest at just over +/- 1.6%.
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