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
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
No changes to report here either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
FARMERS VOTE TO SELL; MANAGEMENT PROMISES NEW PHASE UNLEASED
Fonterra shareholders have overwhelmingly approved the $4.22 bln sale of its consumer businesses to Lactalis at a special meeting today. The Fonterra chair says divestment 'will usher in an exciting new phase for the co-op'; The CEO says Fonterra will be 'unleashed'. The vote was 88.5% in favour (so not many WP supporters among dairy farmers).
END-OF-YEAR RENAISSANCE
The ANZ Business confidence survey has reported a notable rise in sentiment in the business community. Business confidence jumped +8 points in October, to the highest level since February. Wellington was weakest, Auckland the strongest. Expected own activity lifted +2 points, the strongest since April. Even the retail sector claimed improvement, while employment lifted. More here.
NZX50 RISING
As at 3pm, the overall NZX50 index turned firmer in its Thursday session, up +0.5% so far and boosted by the positive ANZ business confidence report. Confidence boosts confidence. That puts it +1.3% higher over the past five working days. It is up +3.1% year-to-date. From a year ago it is now up +6.2%. Market heavyweight F&P Healthcare recovered another +0.9% today. EBOS, Sky TV, Freightways, and Gentrack climb but Kathmandu, Briscoes, Goodman Property, and Oceania are all softer.
HOT PROPERTY BUT MOST BIDS UNSUCCESSFUL
$2.175 bln was bid today for the $450 mln available in the three NZGB bonds on offer. Investors are rushing for liquidity-safe places to park their funds. There were 139 bids but only 26 won anything. In fact, for the $150 mln May 2034 bond, there were bids exceeding $1 bln but only 4 bids were accepted. General investor inability to access these instruments will be causing some anxiety.
TWO HOGS WIN IT ALL
Just two bidders won all the $25 mln on offer today for the Government's inflation-adjusted bonds. They delivered CPI plus 1.36%. That left 36 other bidders and their $83 mln of bids unsuccessful.
WATER UPDATE
For the record, we should note that we go into November with all of Auckland's water supply dams essentially 100% full, way better than the usual 87% level at this time of year. And our hydro lakes have been getting above average inflows so that storage levels are well above their normal levels for this time of year too.
"ROLL BACK THE ENVIRONMENTAL STANDARDS BECAUSE WE ARE STRUGGLING"
We should probably note that importers of used cars are not happy that most of the growth in car sales is being grabbed by the new vehicle importers. Now the Imported Vehicle Motor Industry Association is calling on the government to lower the emissions standards required of all vehicles coming into the country. (They should talk to Fed Farmers who have the Government in their pocket and can get environmental standards watered down by just asking.)
A GAME OF 'STACK-THE-DECK'
All eyes are now on the Xi-Trump talks in South Korea. Expectations that had been raised by Trump are being scaled back sharply now, with most analysts seeing a 'truce' as the best outcome, nothing like the trade 'treaty' Trump thought he would get. The bottom line: the US-China geopolitical tussle will continue in earnest for a long time yet. And 'others' (especially small 'others' like New Zealand) will have to be nimble and anonymous to avoid the wrath of either superpower. There is serious downside for getting it wrong. Neither will reward any country that sides with them, certainly not the US. And given this game is being played by two autocrats, if there are any rewards, they will go to the senior political heavyweights who give in, not the countries themselves.
BOJ TO REVIEW
Later today, the Bank of Japan will be reviewing its policy rate (0.5%) and settings. No changes are anticipated.
LIQUIDITY IS AGAIN THE KEY RISK
And we should perhaps note that global liquidity is tightening in the commercial world, and that should be a warning sign for investors of all sorts. Those with memories of the GFC will understand what can happen. One or two largish international companies that fail and trigger calls on liquidity at their funders could well be at the catalyst for an unexpected shock that cascades. Illiquid real estate could be that trigger again (thinking regional US sub-prime real estate here), or margin lending for cryptos which seem to have grown to be systemically significant, or some industrial failures (like First Brands). One thing will likely repeat - the credit rating agencies will not be the ones to show where the risk is.
SWAP RATES ON HOLD
Wholesale swap rates are will likely be little-changed again today, especially at the short end. 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 Wednesday to 2.50%. Today, the Australian 10 year bond yield is up +10 bps from yesterday at 4.32% in reaction to their inflation pressures. The China 10 year bond rate is unchanged at 1.76%. The NZ Government 10 year bond rate is up +7 bps at 4.06% as collateral damage from the Aussie move. The RBNZ data is now all delayed with Wednesday's rate up +4 bp to 4.05%. The UST 10yr yield is up +9 bps at 4.07% after Powell's comments.
EQUITIES HESITATE, EXCEPT ON THE NZX
The local equity market is now up +0.7% in Thursday trade so far. These are the best gains of any of the markets we follow. However, the ASX200 is down -0.1% in afternoon trade. Tokyo has opened little-changed. Hong Kong is up +0.2% at its open. Shanghai is down -0.2% to start their Thursday trade. Singapore is also down -0.2% at its open. Wall Street ended its Wednesday trade little-changed on the S&P500 and restrained by what Fed boss Powell had to say and less positive that what they expected.
OIL ON HOLD
The oil price in the US is unchanged at just under US$60.50/bbl and the international Brent price is now just over US$64.50/bbl.
CARBON PRICE SOFTER YET AGAIN
There have been some more trades today and some reasonably sized ones, but at marginally lower prices, the latest at $52.90/NZU. We haven't seen a price that low since mid-August, 2024. 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 TURNS LOWER AGAIN
In early Asian trade, gold is down another -US$33 from yesterday, now at US$3940/oz.
NZD STABLE
The Kiwi dollar is down -10 bps from this yesterday at 57.7 USc. Against the Aussie we are up +10 bps at 87.7 AUc. Against the euro we are also up +10 bps at 49.7 euro cents. This all means the TWI-5 is holding at 62.2.
BITCOIN SOFTER YET AGAIN
The bitcoin price is now at US$110,443 and down -1.9% from this time yesterday. Volatility has been modest at just over +/- 1.7%.
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19 Comments
A comment in Tony Alexander's weekly review today gives the lie to CGT justification claims of investors stopping young people buying houses:
"However, while a net 53% say there are more first home buyers in the market only a net 7% say that there are more investors. The low activity of investors helps explain the likes of data recently released by Cotality showing a record 28% of home purchases are being made by first time buyers. It has not been accurate for a long time to say that young people cannot afford to buy a home in New Zealand.
Young people have been taking advantage of the plethora of listings, lower prices, little competition, and accumulated savings to make purchases perhaps long delayed by the previously rampant market.
An important point to note is that first home buyers became dominant well before interest rates started falling in August last year – almost a year and a half before in fact."
He's obviously been reading interest.co.nz !
Investors stopped speculating, and house prices dropped.
This. House price gains have stopped climbing as investors could no longer access bank capital under CCCFA and DTI rules. Well done. Add in the price decreases (OMG that can actually happen) after the unnecessary interest rates suppression post covid (thanks Orrful) investors have had to have a bit of a reset in wether this actually makes sense. Its no news flash that it hasnt stacked up for years.
Thankfully those that chose to stay in NZ, work and pay tax in NZ, have finally saved up enough they can engage and secure a house without the pestilence of investors climbing all over them.
I honestly don't get the deal with CGT. It's an investment so any gains you should pay tax, just like shares, or profits, or on a deposit etc. Why should property get a 28% advantage?
Shares are subject to the same fuzzy 'intent' test as property. If you can show you bought shares for the income, and just happened to make a capital gain when you sell a few years later, you likely pay no tax on the capital gain. If I buy a share with the intent of making a profit selling higher, I pay tax on that gain.
It's a dumb rule.
Cripes I never knew that. Awful.
mfd is only partially correct. For the majority of shares which are listed on the NZX he is correct. Most overseas shares, a few exemptions in Oz, are subject to FIF or the 5% dividend rule (I call it the DDD rule ? for the first D, Dunne, [an ex cabinet Minister] Dividend) which are CGT taxed every year on unrealised capital gains.The Cullen Super fund pays at least $2bill if not more in tax to the govt. Kiwisaver funds maybe $1bill. I don't really know the latter figure. I'm not even sure IRD has the wherewithal to drill down to a lower level, not withstanding there ~2bill IT system.
Yes that's true, different for shares outside NZ and (some of) Australia. Not really a capital gains tax, and also dumb rule.
Exactly. Its multi generational tax avoidance and ingrained entitlement.
Are first home buyers exclusively "young people"? I wonder what TA defines as young
Included in all the bravado and chest beating currently on display by the great powers concerning economics, trade, finance and whatever, is the highly disturbing reemergence of nuclear weaponry as a topic. President Trump has ordered immediate resumption of testing as relative only days after reminding Russia that long range hypersonic missiles are not needed if there is quite a number of deep water subs handily positioned. This sort of rhetoric by the players, is heading the world right back into the Cold War tensions so scarily parodied by the like of “Dr Strangelove.” The repetition on here by PDK resonates, the scrap for what’s left is heating up.
I am in no way blindly loyal to the National Party - however their recent moves supporting the farming community are much appreciated.
Unless you have spent years having your livelihood being undermined and vilified as it was by the Labour led government you cannot appreciate how depressing farming was becoming. Add the rabble rousing of groups such as Greenpeace ( an organization I once admired) and the rural sector was being kicked in the guts from every direction.
Farmers in general have improved our care of the environment, And we can and are striving to do better. So throw away comments as in the above article are not appreciated. .
Thanks. Noted.
Last time I looked NZ primary industries account for ~80% of goods exports and just under ~60% of total exports.
NZ not the only country who can't manage ferry procurement
"Delays, cost blowouts and bureaucratic stuff ups have plagued the deliver of the two new ferries, which are expected to be in service by October 2026."
https://www.abc.net.au/news/2025-10-30/history-of-troubled-spirit-of-ta…
Maybe it was the right move for the Nats to cancel the ferries started under Labour. Here's a puff piece on Chinese ship building with reference to our ferries and some costs (don't know where they got them from). Based on this report I can see why the ferries construction was switched to China. https://www.youtube.com/watch?v=CK745oMEirI This report, 10 months old from an American in China about China's ship building capacity. https://www.youtube.com/watch?v=r2bi1AIiHWo
https://www.construction-physics.com/p/how-the-uk-lost-its-shipbuilding
“in an increasingly competitive industry British shipyards did not successfully perform the financial management tasks—marketing, budgeting and procurement--necessary to build vessels profitably.”
The Geddes report also noted that labor relations were abysmal, and strict adherence to labor demarcation rules (which themselves varied extensively from yard to yard) greatly hampered productivity. The labor demarcation problem was so severe that in some yards it literally took three different workers to change a lightbulb:
…a laborer (member of the Transport and General Workers Union) [to] carry the ladder to site, a rigger (member of the Amalgamated Society of Boilermakers, Shipwrights, Blacksmiths and Structural Workers Union) [to] erect it and place it in the proper position, and an electrician (member of the Electrical Trades Union) [to] actually remove the old bulb and screw in the new one. Production was often halted while waiting for a member of the appropriate union to arrive to perform the job reserved by agreement for them. (sunset 96)"
"And we should perhaps note that global liquidity is tightening" No doubt the Treasury or RBNZ (ie the govt), not quite sure which one will be ready to provide guarantees for our banks. Perhaps someone with a bit more nous than me can explain how NZ is now ready to ride out any shortfall in liquidity.
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