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
BNZ and TSB both cut some og their fixed rates to align with where the market is settling just before tomorrow's OCR review. 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
TSB trimmed many of its TD rates today. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
THE ECONOMY IS NOT IMPROVING
The long-running NZIER Quarterly Survey of Business Opinion has shown falling confidence in the September quarter as the anticipated recovery in demand continues to disappoint. This may bolster the case for a -50 bps cut tomorrow (?)
LAWYERS WIN BIG, BANK LOSES, CLAIMANTS GET WHAT'S LEFT
ASB has agreed to cough up $135.6 mln to settle a class action relating to home and personal loans between 2015 and 2019. This is a far larger penalty for breaching CCCFA laws than any regulator would impose. It was won in negotiation by class-action lawyers. That ASB has settled now (caved?) is interesting because the government said they had their back and would change the law. Something happened. ANZ is facing a similar legal class action. The numbers are big for ASB but likely much of it will go to the lawyers who worked on contingency and the funding industry that supports them.
BOLSTERING A WEAKNESS
Bank and financial stability regulations will soon be set by a committee (the FPC, or Financial Policy Committee) made up of Reserve Bank staff, board members, and external experts. Although probably long considered, it is necessary now because the incoming RBNZ governor has no experience regulating financial stability. (Applications are open to join this committee.)
HOME OWNERSHIP LEVELS DECLINING AGAIN
From 1991 to mid 2018, home ownership levels fell, dropping ten percentage points to 64.5%. Then they started rising again and did so until mid 2023 when the almost reached 67.5%. But since then they have reverted to falling again and by September were down to 66.5%. All this is according to updated data released today by StatsNZ for their Dwelling & Household Estimates.
NZX50 RISES MODESTLY
As at 3pm, the overall NZX50 index was up +0.3% net in its Tuesday session so far. It is up +1.8% over the past five working days. And it is up +3.5% year-to-date. From a year ago it is now up +7.4%. Market heavyweight F&P Healthcare is up +0.9% today so far. Ryman, Vulcan Steel, SkyTV, and Oceania leads gains; Mercury, Meridian, Precinct, and Vital Healthcare the main decliners.
MEAT CONSUMPTION MAKES A COMEBACK FOR GEN-Z
The latest survey update on food buying habits shows some notable changes. Households are spending an average of $240 per week on food – just $2 more per week than in 2023. To combat rising food prices and reduced food budgets (in relative terms), Kiwis are preparing better for grocery shopping, with more saying they plan meals and use shopping lists. More Kiwis now say they are cooking or preparing a meal seven-plus times a week, while more also indicate they eat out and/or purchase takeaways two or more times a week. While one in five Kiwis say they are planning to reduce meat consumption, this proportion is lower than in previous surveys, with a growing number in Gen Z (aged 18-28) say they are planning to increase meat consumption. Gen Z have been instrumental in driving a drop in the number of people identifying as vegans (2% from 3% in 2023) and vegetarians (6% from 9% previously).
ANOTHER DAIRY AUCTION DUE
There is another full dairy auction overnight. Derivatives trading suggests SMP prices may rise from the last Pulse event to be little-changed from the prior full event three weeks ago. But the WMP price may slide again, down maybe -4%.
SECOND THOUGHTS IN THE LUCKY COUNTRY
Aussie consumer sentiment is receding. The Westpac-Melbourne Institute Consumer Sentiment Index fell in October from September to its lowest reading in six months. Optimism about where family finances are headed is fading. Uncertainty about future interest rate cuts is rising. And pessimism about housing affordability is rising as house price expectations hit new 15-year high. These are retrograde moves.
A SURPRISINGLY GOOD OUTCOME
Japanese household spending rose +2.3% in August from a year ago and far better than expected. In fact, it was the fourth straight monthly rise and the strongest pace since May. Helping were government support measures at tackling cost pressures (including the big rice price jump) and the new American tariffs.
SWAP RATES TURN DOWN
Wholesale swap rates are will probably be notably softer today for all durations. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -1 bp on Monday at 2.73%. Today, the Australian 10 year bond yield is up +3 bps from yesterday at 4.41%. The China 10 year bond rate is unchanged at 1.88%. The NZ Government 10 year bond rate is down -1 bp at 4.25%. The RBNZ data is now all delayed with Monday's rate up +2 bps to 4.23%. The UST 10yr yield is up +1 bp at 4.16%.
EQUITIES MIXED
The local equity market is now up +0.5% in Tuesday trade so far. The ASX200 is down -0.2% in afternoon trade. Tokyo has opened up another +0.7% even after yesterday's spectacular surge. Hong Kong is down -0.7% at its open and of course Shanghai is still on its holiday break. Singapore is up +0.8% at its open, a big move for them. Wall Street ended its Monday session up +0.4% on the S&P500.
OIL STABILISES
The oil price in the US is little-changed from yesterday at this time at just over US$61.50/bbl and the international Brent price is still just on US$65.50/bbl.
CARBON PRICE LITTLE-CHANGED
There have been some larger trades today but the price has slipped slightly to $56.50/NZU. 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 UP AGAIN
In early Asian trade, gold is up +US$43 from yesterday, now at US$3958/oz. That puts it just 1% below the US$4000/oz mark.
NZD HOLDS
The Kiwi dollar is unchanged from yesterday at 58.3 USc. Against the Aussie we are down -10 bps at 88.2 AUc. Against the euro we are up +10 bps at 49.9 euro cents. This all means the TWI-5 is still holding at just over 65.6.
BITCOIN FIRMS MARGINALLY
The bitcoin price is now at US$124,655 and up +0.4% from this time yesterday. Volatility has again been modest, just on +/- 1.1%.
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20 Comments
Question for the smarter peeps than me. The USA is suffocating under a mountain of debt, it is also sitting on a mountain of physical Gold still valued at $42/ounce because it has not been revalued for… 50ish years.
To me the obvious question is why doesn't the USA sell a large portion of its Gold reserves to overseas buyers at today's price of almost $4,000 to reduce its debt ?
I don't think you understand Dr Y. Gold revaluation refers to the official upward adjustment of the price of gold held by the US Treasury on its balance sheet, rather than a market-based sale. The U.S. can revalue its official gold holdings at virtually any price it chooses, subject to executive decision and/or congressional authorization. This could improve the book value of Treasury assets, potentially allowing for fiscal or monetary maneuvers like recapitalizing the Federal Reserve or writing down other govt liabilities.
Gold is viewed as a strategic reserve asset and ultimate monetary backstop rather than a source of spending liquidity. Selling gold could signal financial distress and undermine confidence in USD and the broader financial system, which is contrary to US policy priorities.
The U.S. could sell its gold for rat poison, and recent policy proposals have explored this as a way to build a national BTC reserve. It would be unprecedented.
Except that I do understand very well that there is talk about a Gold revaluation in the US. This represents creative accounting without any actual money entering the US to repay its debt. Perhaps you don't understand my new, different question: Why doesn't the US sell, perhaps over time, part of its Gold reserves overseas to reply debt ?
Also "Selling gold could signal financial distress and undermine confidence in USD and the broader financial system" No sh!t Sherlock, it's a bit late for this, that's precisely why the Gold price has been spiking since Trump got elected.
Selling gold and bitcoin here looks a bit to early?
The worse things get in the good old USA, the better the gold value is (in whatever replaces USD)...
at the limit , as USD approaches 0, then the usd is worthless and gold has a value of trillions (in USD) of worthless tokens.
One does not sell gold, you spend it - ultimate currency and all that. [ok semantics...]
A mate keeps telling me you cannot eat it.
I wasn't planning to.
Generally gold is not mentioned by central bankers to avoid any unfortunate comparisons with fiat currencies. It sits hidden in vaults unless it is needed to restore faith during currency crises.
Central banks would have to be very desperate to spend (sell) their gold), that would be avoided at all costs. Once it’s gone then that financial backstop is not available.
While all other currencies are fiat currencies then the US can keep operating the reserve (fiat) currency with it’s associated benefits. Their debt level will just keep increasing along with most other countries debt.
Wild arse guess on my part but I think the reason why there is talk of a gold revaluation in the US is because the BRICS are accumulating so much gold and we hear rumours the BRICS or China alone will ‘do something’ with gold. I expect the US just wants to remind everyone ‘well we have gold and could do something with it if required’.
Regarding Gordon Brown’s extremely poor decision/timing in the sale of nearly half of UK’s gold. Below is just one of the theories..
https://auronum.co.uk/the-browns-bottom-gold-sale/
Some analysts suggest the sale was intended to bail out bullion banks that held large short positions in gold. The “gold carry trade,” where banks borrowed and sold gold to invest in higher-yielding assets, was a common practice, and a rising gold price would have caused substantial losses.
Why sell it when you can just revalue it and offset it? The debt collectors aren’t knocking.
I guess the Gold price would crash, the miners go bankrupt and some banks' balance sheet suffer as their equity reduces. Still, does the USA under Trump care ? Also the price obtained by the USA will still be significantly over $42/ounce, and they would not care if mining rich countries like Russia, China or Australia were affected, quite to the contrary.
Yes, I'd expect the price to be affected pretty badly by that kind of sale.
Also the impact on US debt would be depressingly small - from memory the pile of gold is worth something like a trillion dollars at recent prices which would cover a few months deficit, or knock off a little under 3% of the national debt.
Edit: I should add, this kind of sale leaves you open to embarrassing stories like this if the market continues to go up:
"Between 1999 and 2002 the Treasury sold 401 tonnes of gold - out of its 715-tonne holding - at an average price of $275 an ounce, generating about $3.5bn during the period."
Thanks mfd, especially for the link and graph. So I may be very wrong in my assumption that the Gold price would crash if a major reserve bank decided to sell. I don't understand why the price of Gold rose when the BoE and other countries decided to sell vast quantities of Gold ? Who bought them ?
Yes, I'd expect the price to be affected pretty badly by that kind of sale.
If the U.S. sold its gold, prices would likely be depressed in the short term. However, gold’s role as a financial and monetary hedge could mean buyers (including other central banks and private investors) eventually emerge to absorb the supply, stabilizing prices over a longer horizon.
Most recent central bank gold buying is being led by countries such as Poland, China, Kazakhstan, and India, not the U.S.
The U.S. govt is actively investigating a South African fraudster Benjamin Mauerberger because he has been identified as a central figure in a $1.5 billion transnational money laundering and fraud network, allegedly orchestrating large-scale "pig butchering" scams defrauding Americans and global victims.
These criminal enterprises reportedly use call centers, shell companies, and connections to elite political figures across Southeast Asia, especially in Cambodia and Thailand, to move and conceal illicit funds through financial channels spanning from Asia to the U.S.
Mauerberger' had controversial sharebroking and investment promotion activities in Aotearoa. He operated sharebroking firms in Auckland, most notably Mauer-Swisse and Bergers Securities, which were linked to cold-calling “boiler room” operations selling obscure or thinly traded shares to investors. Regulators investigated these companies for potential financial misconduct, leading to a conviction in 2003 for failing to comply with a Securities Commission summons; Mauerberger was fined NZD30,000 and subsequently left the country before appearing for further questioning.
https://www.asiasentinel.com/p/thaksin-shinawatra-mystery-fixer-man-ben…
30k.... that was.... harsh
The fraudster claims that he was never convicted in Aotearoa. He probably ran before paying. https://www.companyhub.nz/companyDetails.cfm?nzbn=9429036641048
The scale of this is massive and the journos responsible for uncovering this were long-time reporters for WSJ and were responsible for uncovering the 1MDB scandal in Malaysia.
Also, the deputy PM of Thailand seems to be backing the fraudster. The politician was convicted of conspiring to import heroin to Australia and sentenced to six years in prison in Aussie.
Is that all?
"The 33 things the government plans to do before the end of year"
https://www.rnz.co.nz/news/political/575209/the-33-things-the-governmen…
solving child poverty , famine, world peace took Jacinda two terms... Give the guy a fighting chance...
Mostly good stuff if they get it done. Bishop must be a busy guy.
Must admit I’m quite liking the coalition, particularly National. Didn’t vote for them last time but probably will this time. Not sure why everyone’s hating on them so much.
Because said people are able to think?
How did the homework go ?
Some of these things are good and real, like no. 24.
Some are fillers, like 15. They should have made a punchier list of ten real things
15. Begin the hospitality sector review
24. Begin construction on a new medical school at the University of Waikato.
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