A review of things you need to know before you sign off on Friday; more retail rate changes, rental investors suffer negative cashflows, consumers positive, bank lending inches up, TD savings rise, swaps and NZD on hold, & 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 announced its -50 bps floating rate change to match the OCR cut. It new rate becomes 6.99% on December 13. They also cut their reverse mortgage rate by -50 bps too, to 9.39%. NBS also cut their floating rates by 50 bps. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Heartland bank also cut its savings account offers, effective today. Their notice savers and Digital Saver account fell -50 bps, but the Direct Call account only went down -40 bps. UnityMoney cut almost all its term deposit rates today. General Finance reduced all rates effective December 1, by between -10 bps and -55 bps. All updated rates less than 1 year are here, for 1-5 years, they are here.

NEGATIVE CASHFLOW + NO CAPITAL GAIN = PAIN
Some residential property investors are likely still burning cash, but at least the fire is getting smaller, according to our latest quarterly Rental Yield Report for Q3-2024. These negative cash flows come even though interest rates are falling.

NOT SO GLUM. IN FACT LOOKING AHEAD WITH OPTIMISM
Yesterday we noted a somewhat surprising rise in business sentiment despite the tough track the local economy is on. Today, surveyed consumers are increasingly optimistic as well with sentiment level almost back "to par". Both the current and future conditions indexes lifted markedly.

BETTING ON A THIRD ONE
However, ANZ economists has changed their tune. Previously they expected a -25 bps OCR rate cut on February 19, 2025. Now they think it will be another (third) -50 bps cut. That would take the OCR to 3.75% and very near the 3.50% level they now think it will settle at.

NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. NZX flat to end the month even though there were 50 gainers and only 28 decliners today. But the market is subdued with no big movers

2DEGREES MAKES PROGRESS
Privately owned telco and fixed connections provider 2degrees saw revenue and earnings before tax growth for its 2024 financial year, on the back of gains across broadband, mobile and energy sales. Total revenue climbed +7% year-on-year to $1.34 bln, with broadband revenue increasing by +12% to $415.9 mln, mobile rising +9% to $555 mln, and energy up +12% to $122.7 mln. This growth reflected 2degrees’ continued expansion in consumer and business markets. Underlying statutory EBITDA rose +16% to $339 mln, which excludes the $620 mln generated by the sale of 70% of its passive tower assets in the previous financial year. Operating cash flow increased +$59 mln to $169 mln, providing support for continued investment in the network and customer experience initiatives, they said.

UP, BUT THERE ARE RISKS
Rabobank has settled on a 2024/25 farmgate payout forecast of $9.70/kgMS, conservative compared to other analysts. It provided a full analysis of why, here.

VERY AVERAGE
In its November log market report, PF Olsen says export log prices have risen slightly but only because the NZD has fallen. China & India demand remains soft, domestic demand is weak and mills are shutting for longer than usual ovr the holiday break/

MODEST RISES, BUT TO NEW RECORD HIGH LEVELS
Even though the October lending data was relative cold coffee (H/T DH), with changes that are unremarkable, there are some resulting points to note. Bank lending for home loans rose $1.6 bln in the month, not too different to recent months, but still it was the most of any month since December 2021. The debt due by borrowers are at new highs for homeowners, businesses and almost a new high for rural borrowers. Again, noit be much, but still new benchmarks. Total bank and non-bank sector debt is now at $579.4 bln with households accounting for $380.8 bln as at the end of October.

MOST HOUSEHOLD BANK BALANCES ARE IN TDs
Total deposits at banks are now $460.7 bln, of which household hold $254.5 bln (55%) and that is the highest share in a long time, certainly since 2016 when the modern series started. Household transaction account balances are still trending lower, savings account balances are not changing much, but term deposit balances rose to a record $140 blon in October even though the rise from September was less than a third of what it was in July. Term deposit balances now represent 55% of all household bank balances.and that makes them the highest share since late 2019.

JUDGMENT TIME
Tomorrow is the final day of November, so the real estate trading data is now locked in. Time to mark your estimate/guess as to sales volumes and median prices for the month. The buying/selling for 2024 isn't over yet of course, but the 'season' nearly is.

HOUSEHOLD WEALTH MAKEUP
It is probably now only of academic interest, but the March 2023 National Accounts by sector were released today and they told an interesting story. Household 'investment' in housing fell -8.6% in 2023 from the prior year, after rising +9%, +23% and +14% in the prior three years (during the pandemic). That fall was the latest in at least 20 years, the last one of this magnitude being in 2009. At the same time household financial assets kept on rising. These now represent 57% of all household wealth (after deducting household liabilities). The 57% level is back to the 20 year average. As at 2023, total household housing assets were worth $1.16 tln, household financial assets were worth $1.57 tln, and household financial liabilities were $288 bln. No-one is suggesting these assets (or liabilities) are evenly spread. Stages in life will be a key factor.

SWAP RATES FALL
Wholesale swap rates are probably little-changed today as markets are subdued with Wall Street closed. Our chart below will record the final positions. Yesterday the 90 day bank bill rate was little-changed again. The Australian 10 year bond yield is unchanged from this time yesterday to 4.42%. The China 10 year bond rate is down more than -2 bps at 2.04%. We make that its lowest ever. The NZ Government 10 year bond rate is down -3 bps at 4.52% while today's RBNZ fix was 4.50% and unchanged. The UST 10yr yield is now at 4.24% and down another -2 bps. Their 2yr is down at 4.22%, so that positive curve is now only to +2 bps.

EQUITIES MIXED
The NZX50 has risen +0.4% near the end of the week. The ASX200 is down -0.4% in afternoon trade. Tokyo is down -0.7% at their open. Hong Kong is little-changed at its open and Shanghai is up +0.2%. Singapore is starting down -0.5%. Wall Street is on holiday today (Thanksgiving).

OIL LITTLE-CHANGED
The oil price is up +50 USc from this time yesterday, now at US$69/bbl in the US, but unchanged at just over US$72.50/bbl for the international Brent price.

CARBON PRICE STILL ON HOLD
The carbon price is unchanged today at US$63.80/NZU today. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD FIRMER
In early Asian trade, gold is up +US$17 from this time yesterday, now at US$2644/oz.

NZD HOLDS
The Kiwi dollar is unchanged from this time yesterday, now at 59 USc. Against the Aussie we are slightly firmer at 90.8 AUc. And against the euro we are still at 55.9 euro cents. This all means the TWI-5 is now at 68.3 and unchanged.

BITCOIN HOLDS
The bitcoin price has slipped a minor -0.4% from this time yesterday, now at US$95,960. Volatility of the past 24 hours has been low at just under +/- 1%.

This soil moisture chart is animated here.

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