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 RATE CHANGES
There are no changes to report today. All rates are here. And note, you can compare mortgage offers with our new calculator that takes into account other costs and cashback incentives, here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Gold Band Finance have trimmed their TD rates for terms 1 to 4 years. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
FARMERS GET THE CREAM
Dairy giant Fonterra is paying farmer shareholders $10.16/kgMS and a total dividend for the year of 57c after reporting a $1.079 billion after tax profit. That will result in an overall annual flow into the economy via the milk price and dividends of $16.2 bln in total cash returns to shareholders. In addition they expect to return $3.2 bln after the sale of its consumer brands. Looking ahead, milk flows are expected to rise +1% in the upcoming season over the good current season. For reference, on-farm costs are estimated to be $8.60/kgMS.
RENEWAL FADES
Updated StatsNZ subnational population projections over the next 28 years (to 2053) show our population growth rate will generally slow across most regions, and urban areas with slower growth in the second half of the projection period (2038–2053), due to population ageing and the increasing number of deaths relative to births. Most areas will be home to a greater number and proportion of people aged 65 years and over in 2053. Deaths will increase relative to births in almost all areas as the population ages. Bay of Plenty, Auckland, and Waikato are the only regions where median increases will exceed +1% pa. These demographic projections will be very tough on housing markets especially.
PASSED THE LOW POINT?
StatsNZ produces an activity index, and that rose +2.4% in August from a year ago. The activity outlook, the performance of manufacturing index, heavy and light traffic movements, grid demand, and job advertisements recorded increases. But retail activity as measured by electronic card transaction activity recorded a decrease together with a rise in jobseeker numbers. This overall activity index is a broad measure of economic activity. It provides a more timely and frequent indicator of economic activity, which complements a more definitive measure, such as GDP which is invariably out of date when it is released.
FEWER IN SOCIAL HOUSING
There were 441 households in emergency housing in August, according to MSD data. That is down from 1215 in August 2024. There were 24,480 people on the Social Housing Register at the end of August, and that is down from 27,312 in August 2024.
MASSIVE DEMAND, AGAIN
There was massive demand for the two NZ Government Bonds tendered today with 112 bids worth more than $2 bln for the $450 miln available in two durations. So more than 4x covered. But demand has been high recently and this one didn't reach the $2.5 bln in demand at the end of August. Yields achieved were largely stable from the prior equivalent events.
NZX50 DIPS
As at 3pm, the overall NZX50 index was down -0.4% net in its Thursday session so far. It is now unchanged over the past five working days. But it is up +0.4% year-to-date. From a year ago it is now up +7.4%. Market heavyweight F&P Healthcare is down a massive -3.9% today so far. Freightways, Kathmandu, Ryman, and Vista are rising, but F&P Healthcare, Oceania, a2 Milk, and Mercury are the main decliners.
RBNZ GOVERNOR PROFILE
We have a profile of the new RBNZ Governor here. She is Dr. Anna Breman a 49-year-old Swedish central banker who has promised radical transparency and to stay ‘laser-focused’ on inflation. So, if fiscal looseness ("going for growth") generates inflation outside the 1-3% target range, expect tensions with the Finance Minister.
FOSSIL SECURITY
Following the passing into law of the Crown Minerals Act, the Government has moved to revive gas exploration activity in new prospects and existing gas-producing reserves. It is a reversal after the ban from the prior government. It seems unlikely that there will be bipartisan agreement for the required long-term investment, so bidders will likely be wary in the absence of a bipartisan approach. Until then, it will likely just be a Shane Jones talking point.
SWAP RATES HOLD AGAIN
Wholesale swap rates are will probably be little-changed today in the short durations. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged at 2.83% on Wednesday. Today, the Australian 10 year bond yield is up +2 bps from yesterday at 4.33%. The China 10 year bond rate is up +2 bps at 1.92%. The NZ Government 10 year bond rate is unchanged at 4.26%. The RBNZ data is now all delayed by one business day now, and was down -2 bps, at 4.20% at the end of Wednesday trade. The UST 10yr yield is up +4 bps at 4.15%.
EQUITIES MOSTLY LOWER
The local equity market is down -0.4% in Thursday trade. However, the ASX200 is up +0.2% in afternoon trade. Tokyo has opened up +0.2%. Hong Kong is also up +0.2% with Shanghai up the same. Singapore is down -0.3% at its open. Wall Street ended its Wednesday trade with the S&P500 down -0.3%.
OIL RISES AGAIN
The oil price in the US is up +US$1 from yesterday at just over US$64.50/bbl and the international Brent price is now over US$69/bbl.
CARBON PRICE HOLDS
There have been more trades reported today, and the prices are slightly softer at $57.50. The next official carbon auction is on December 3, 2025 and likely heading for another failure. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DIPS
In early Asian trade, gold is up to US$3736/oz, down -US$19 from this time yesterday.
NZD DIPS FURTHER
The Kiwi dollar is down -40 bps from yesterday, still at 58.2 USc. Against the Aussie we are down -30 bps at 88.2 AUc. Against the euro we down -10 bps at 49.6 euro cents. This all means the TWI-5 is now just under 65.3.
BITCOIN ON HOLD
The bitcoin price is now at US$112,798 and up a minor +0.3% from this time yesterday. Volatility has been modest,just on +/- 1.0%.
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15 Comments
GST at 32%, pension age of 72 among Treasury solutions to financial crunch: https://www.stuff.co.nz/business/360835292/gst-32-pension-age-72-among-…
I personally think people should work for the state pension, if physically and mentally able. If you want to go and play golf and go on cruise ships, that's fine. But do it on your own dime. Not the labor of the young people whose futures you've made it all the more difficult through monetary debasement.
Phase in a muscular universal Kiwisaver. Phase out National Super entirely. It should take about 30 years to complete, but the financial benefit to the country would start to show very soon.
Real resources...stop thinking 'money' is one.
100%. Social security is meant to be a safety net
Parliament watchdog to investigate National MP over his trusts’ 25 rental homes: https://www.stuff.co.nz/politics/360835388/parliament-watchdog-investig…
Pointless. What is the govt going to do if he's found 'guilty'? Make him apologize?
It might lead to more conversations about the obvious conflicts of interest from so many MPs owning rental properties.
In most cases, perfectly legitimately and within the rules, but are we really pretending that these same people will attack issues such as housing supply and immigration with the same vigor as someone without that self-interest?
More conversations. That'll solve it.
In most cases, perfectly legitimately and within the rules,
Nancy Pelosi uses this excuse. There is no accountability.
Obviously Fonterra in discarding its branded products, and concentrating instead on streamlining its basic commodity products, had concluded that they were putting more into the former than they were getting out of it. This means that the operation will now ride to where the markets take it. However if it is so that dairying has already taken up virtually all the pastoral land suitable for the industry then in reality it will be more or less running that market supply, even in seasons of optimal production conditions, in a flat line.
Business leaders and academics are united in the opinion that value add is critical to pricing power and profitability.
I'm not close enough to Fonterra to comment on their branded strategy and performance, but I can say their position as purely cost-leader in dairy production is the beginning of the end for them.
Very simple in form and name but “growth” is hardly an element that any outfit can afford to ignore. Certainly gains may be made with introduced and enhanced efficiencies, but sooner or later the operation flat lines. In a sense Henry demonstrated much of that feature and outcome with his Model Ts once Messrs Chevrolet & Buick & Co had got into gear.
For reference, on-farm costs are estimated to be $8.60/kgMS
That's actually a lot higher than I expected. Wouldn't take much to swing to a loss.
And most of those 'on farm costs' (inputs) are imported....excepting land 'value'
It depends on the farm. There are some a lot lower. Our break even not counting drawings for this year looks like it will be about $5.10 per kg of milk solids.
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