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
ASB has cut most fixed rates. They were joined by China Construction Bank, and Resimac. Details here. 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
ASB, BNZ and Heartland (and AMP) reduced rates today. And we have summarised where these rates have landed, here. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
FROM VICIOUS TO VIRTUOUS
We are still importing more than we export on an annual basis, but the latest -$2.2 bln merchandise trade deficit is a massive $7 bln smaller than last year and $13 bln smaller than the year before. Our exports rose +19% in September from a year ago, our imports were up +1.6% on the same basis. The fast improvement is occurring because our import appetite has been curbed just as our exports are mushrooming higher.
STILL STUTTERING
The September credit card billing data released by the RBNZ today has picked up some outsized softness in the most recent data. That is consistent with overall economic stutter. It was the largest monthly fall (s.a.) since October 2023
DAIRY'S STRONG RUN ENDING?
There is another full dairy auction tonight and the secondary and derivatives markets are signaling about a -4% retreat for both WMP and SMP. These signals haven't been that reliable in the past but international trends for dairy fats (cheese, butter, etc.) have been weakening recently too. A lot depends on China demand, and recent indicators of Chinese holiday demand, September retail sales, and food prices all point to a lackluster backdrop.
NZX50 ON HOLD
As at 3pm, the overall NZX50 index was little-changed in its Tuesday session, down just -0.1% so far. That puts it +0.4% firmer over the past five working days. It is up +2.0% year-to-date. From a year ago it is now up +3.1%. Market heavyweight F&P Healthcare is down -0.8% today. There are 39 gainers led by Synlait, Briscoes, Ventia, PFI, Infratil and Auckland Airport. There are 40 decliners led by Mercury, Gentrack, Warehouse, and Precinct.
SAFE
It's somehow become a bit of an anti-science culture war sideshow, but the High Court has now ruled that the EPA's approach to glyphosate weedkiller (ie Roundup) has found that the experts the EPA used applied the correct judgement. They reached a similar conclusion to regulators from jurisdictions including the EU, Australia, and the US who have extensively reviewed glyphosate. They concluded it should not be classified as a carcinogen and that any potential risks from using the substance have not changed.
NOW'S GOOD
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US SHUTDOWN UPDATE
In the US, their Federal Government shutdown is getting ever more toxic, now in its third week. A key White House economic advisor said earlier today the shutdown is “likely to end sometime this week,” though warned that if it doesn’t, the Trump administration may resort to “stronger measures” to pressure Democrats. There seems no resolution in sight amid the partisan standoff. Republicans are pushing for a short-term funding bill to maintain current spending levels, something they railed against when Biden was President, while Democrats insist any deal must include expanded health-care provisions, specifically an extension of Obamacare tax credits set to expire at the end of 2025.
SWAP RATES DIP
Wholesale swap rates are will likely be lower today across the board on global trends. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged on Monday at 2.53%. Today, the Australian 10 year bond yield is down -3 bps from yesterday at 4.13%. The China 10 year bond rate is up +1 bp at 1.77%. The NZ Government 10 year bond rate is down -3 bps at 4.00%. The RBNZ data is now all delayed with Monday's rate up +4 bps to 4.00%. The UST 10yr yield is down -3 bps at 3.99%.
EQUITIES MOSTLY UP STRONGLY
The local equity market is now unchanged in Tuesday trade so far. However, the ASX200 is up +0.6% in afternoon trade. Tokyo has opened up +1.4%. Hong Kong is matching it, up +1.5% at its open. Shanghai is up +0.5% to start their Tuesday trade. Singapore is up a strong +1.4% at its open. The Wall Street ended its Monday trade yo +1.1% on the S&P500.
OIL DIPS AGAIN
The oil price in the US is down -50 USc to just under US$57/bbl and the international Brent price is now just under US$61/bbl.
CARBON PRICE HOLDS
There have been few trades today and the price has held at $55.90/NZU but with some showing softness. 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 FIRMS SHARPLY
In early Asian trade, gold is up +US$80 from this time yesterday, now at US$4343/oz. But silver is down under US$52/oz now.
NZD UNCHANGED
The Kiwi dollar is holding from this time yesterday at 57.4 USc. Against the Aussie we are unchanged at 88.2 AUc. Against the euro we are uup +10 bps at 49.3 euro cents. This all means the TWI-5 is still at 61.9, little-changed.
BITCOIN FIRMS
The bitcoin price is now at US$109,573 and up +1.3% from this time yesterday. Volatility has again been modest, at +/- 1.6%.
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32 Comments
Approx 62% of commercial real estate in the U.S. built before 1990 is functionally obsolete - and there's a growing consensus among analysts that aging building stock no longer meets modern demands for sustainability, flexibility, and technology integration. Aotearoa will not be much different.
Bitcoin is forcing real estate to evolve or die. It might take some time to get your head around it but it is what it is. The Ponzi has its challenges.
And if borrowing against Bitcoin becomes easier, safer, and cheaper than borrowing against real estate, why would anyone store wealth in houses?
Simple: they won’t.
Generally speaking, real estate’s value is determined based on the cash flows the property can generate, plus a market-driven monetary premium. Bitcoin, on the other hand, is a pure expression of monetary value, unburdened by physical constraints or ownership costs. As more capital flows into Bitcoin-backed credit markets, this monetary premium baked into property will inevitably collapse, and real estate will return to its utility value.
https://www.nasdaq.com/articles/bitcoin-draining-value-out-real-estate
"Bitcoin is forcing real estate to evolve or die"
How ?
Did you not read the comment Dr Y? When the monetary premium of property disintegrates, it loses its value beyond utility. We're already seeing that as the CRE apocalypse lingers on.
Didn't the CRE apocalypse in certain countries start when COVID sparked working from home and reduced occupancy and therefore demand? Not sure how big a role Bitcoin has played here.
Didn't the CRE apocalypse in certain countries start when COVID sparked working from home and reduced occupancy and therefore demand? Not sure how big a role Bitcoin has played here.
The COVID period definitely impacted the CRE apocalypse. Rat poison didn't play any hand here. But that's not the point. It's more to do with the monetary premium of property relative to BTC in credit mkts going forward.
I did JC is a whole lot of rubbish.
"Real estate’s value is determined based on the cash flows the property can generate, plus a market-driven monetary premium. Bitcoin, on the other hand, is a pure ponzi speculation which does not bprovidevany return at all, nor is it a real financial asset like Gold"
Bitcoin is speculation in its purest form. At least with tulips, you could make a girl smile.
Bitcoin doesn't make CRE worthless. Other aspects impact the monetary premium of property relative to BTC as it increasingly becomes important in credit markets.
Real estate’s value is determined based on the cash flows the property can generate,
No its by the biggest fool you can find to sell it to, or at least until; we ran out of fools, or the foolish realised they where buying and selling to each other....
Is the bigger fool the one who buys a house or the one that buys a few bytes of cryptography? Or the one who buys some useless precious metal? Hard to know really.
The one who fails to get out before the crash..... a.k.a The Bag holding fool
edit - Golds current explosive move is indicating a collapse in trust... possibly geopolitically....
I remember buying gold pre GFC under 2k NZD a coin.
NZ housing’s already had its crash hasn’t it? Bigger than Ireland I’ve been told. But most other assets are bubbling away crazily.
Honestly it’s really hard to find anywhere safe for your money right now. Anyone could be the bigger fool. I’m lucky I don’t have any to worry about.
Yvil prefers to call it a correction, and considering what may occur next it could be just that.
Golds explosive move could just be speculation. It wouldn’t be the first time.
But I know a few girls who would give you more than a smile for some BTC
same ones like lines
"And if borrowing against Bitcoin becomes easier, safer, and cheaper than borrowing against real estate, why would anyone store wealth in houses?"
Because you can live in a house or you can rent it out and get income.
You’d need to be pretty small to live in your bitcoin wallet.
Because you can live in a house or you can rent it out and get income.
You can rent out a property for commercial and residential purposes in North America.
Doesn't mean its monetary premium as a credit instrument remains the same or increases.
And if market value falls 80%, its likely any monetary premium beyond utility has gone.
Art, fashion, wine and even very good whiskey, hell even watches... but the longest lasting ... shines golden.
Gold is money, everything else is credit.
Golds nothing special. Everything is worth whatever you can get for it on the day you need to exchange it, and gold moves up and down just like everything else.
yeah that's why central banks allocate reserves to "Nothing Special",
Sadly Jimbo your comments here show your understanding to be Nothing Special
It might be special to central banks, but to you or I there’s nothing special about it. It would have been great to buy gold a couple of years back, just like it would have been great to buy bitcoin before that or houses before that. Plenty of plebs have lost money buying gold.
You could argue that land has a very long history of retaining value much like gold. It has the advantage of also being useful so you can extract revenue from it. Sure it isn’t held by central banks, that doesn’t make gold the better asset.
It’s the lending that needs to be safe, not the borrowing. If I lend you some of my bitcoin, who’s to say you’ll pay it back? But if I lend you money to buy a house, and I have a legal stake in that house, I’m unlikely to lose.
s u b p r i m e have you been living under a farken rock?
or is tonight special pre hump day, green shoots day?
first gold is "nothing special" and then this that you cannot lose money lending on real estate?
Take a break , come back tomorrow.
Yes more likely currently to be private credit and AI. Greed goes wherever it can and bends the rules until the next crises, time after time again.
I didn’t say you can’t lose money in realestate. But if the borrower has enough invested you are pretty unlikely to lose anything. Subprime was exactly that - but for example my house would need to lose 70% of current value before the bank could possibly lose a cent, it’s a pretty good deal for the lender.
If lending for housing is such a bad idea, I guess that makes those Aussie banks pretty stupid, they must be charities or something.
the latest -$2.2 bln merchandise trade deficit is a massive $7 bln smaller than last year and $13 bln smaller than the year before. Our exports rose +19% in September from a year ago, our imports were up +1.6% on the same basis. The fast improvement
Labour will take care of that improvement in the next term, no problem.
How?
(;-)
If there’s another pandemic maybe.
IKEA have lost a chunk of their 3 year year old plantings at Porangahau.
fire?
https://www.youtube.com/watch?v=9TDSGSg6rr4
One and a half hours of reality.
Steve Keen at his clearest and only slightly antagonistic (and virtually no sales pitch for Ravel)
Money, economy and climate change.
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