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
FMT cut its minimum mortgage lending rates 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
Xceda Finance has cut rates today, many of their now below 4%. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
MARKET CAN'T TOLERATE HIGH DAIRY PRICES
The latest full dairy auction results aren't good. Not so much because the overall result was down -3.0% in USD terms, more because that makes it seven declines in a row from early August, taking the cumulative drop to -13%. And the recent retreats seem to be getting more intense. We now have prices lower than year-ago levels. And the decline in USD is being matched by the decline in NZD now, down -2.9% in this latest event. Clearly analysts will be dusting off their current season payout forecasts because they are risk of being downgraded. Behind the softness is a faster-than-expected rise in dairy production levels due to good weather conditions globally. That is as true for New Zealand as anywhere, where milk production is rising. The pointy end of this pressure is the butter price, and that dropped -7.6% at this latest auction. WMP was down a lesser -1.9%, SMP down only -0.6%.
MORE SELECTION, LOWER RENTS
More rental properties available and fewer prospective tenants are forcing rents down in most parts of the country. Advertised rents on Trade Me Property have dropped to a two-and-half-year low.
PPI TURNS 'POSITIVE' FOR THE FIRST TIME IN EIGHT YEARS
For the first time in two years, producer output prices have risen faster than producer input prices. And if we look past the effect of the pandemic and the subsequent sharp adjustments of this unusual period, the gain has been the best since 2017.
THERE IS NO NET INFLATION ON THE FARM ANYMORE
Overall farms, and excluding livestock costs, farm expenses were up just +0.1% in the year to September. Admittedly, that covers a range of costs that did move, but largely cancelling each other out. Farm electricity rose +9.a% for the year, fertiliser was up +13.5% on the same basis. But fuel and pest control costs dropped, and interest costs dropped a massive -19.8%. Overall costs for dairy farms actually fell -1.0% from a year ago, for sheep & beef units they were up +0.6%, for cropping up +1.2%, and for horticulture they were up +1.8% from a year ago.
BEING NICE
The FMA has chosen an 'education' strategy rather than an 'enforcement' strategy to deal with insider trading in the financial investment industry. It has released a best practice note to guide industry professional on how to avoid insider trading risk, and 'materiality' is an aspect of what could attract regulator action. It is a tricky area for everyone (including the FMA), so you hope this guidance doesn't just provide a cheat-sheet on how to avoid prosecution through regulatory gaming.
TAKE OUR NEW QUIZ
If you haven't already done so, don't forget to take this week's quiz. Join the more than 600 who did it last week. This week's version ends on Sunday. You can bookmark this page.
NZX50 DIPS
As at 3pm, the overall NZX50 index is down -0.5% so far on Tuesday following global trends. That puts it also down -1.3% over the past five working days. And it is up +2.8% year-to-date. From a year ago it is now up +5.2%. Market heavyweight F&P Healthcare is up +0.6% so far today. Kathmandu, Napier Port, Port of Tauranga, and Spark top the gains with Stride, Serko, Tourism Holdings, and Vista leading the decliners.
EMBEDDED HIGH
In Australia, payroll costs rose pretty much as expected in the September quarter. They were up +3.4% year-on-year in Q3 2025, unchanged from the previous quarter. Public sector wages increased +3.8%, slightly above the +3.7% rise in Q2, while private sector wages grew by +3.2%, easing from +3.4% previously. (Overall, total wages and salaries for all employees rose +5.3% for the year to September, boosted by an expanding workforce.)
RISING ORDERS
In Japan, September machinery orders rose a better-than-expected +11.6% from the same month a year earlier, up an impressive +4.2% from August. (This result is not twisted by large, volatile items like for ships or major infrastructure machinery such as electric power plants. That would have pushed the rise even higher.) Export orders were particularly notable.
SWAP RATES SOFT
Wholesale swap rates are probably softer today. 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 at 2.49% on Tuesday. Today, the Australian 10 year bond yield is down -3 bps at 4.43%. The China 10 year bond rate is little-changed at 1.81%. The NZ Government 10 year bond rate is down -6 bps at 4.26%. The RBNZ data is now all delayed with Tuesday's rate is down -2 bps at 4.28%. The UST 10yr yield is down -1 bp at 4.12%.
EQUITIES STOP FALLING ON SOME BOURSES
The local equity market is now down -0.2% in Wednesday trade so far. The ASX200 is little-changed in afternoon trade. Tokyo has recovered +0.6% at its open. Hong Kong is up +0.1% and Shanghai is up +0.2%. Singapore is up +0.1% at its open. Wall Street ended its Tuesday trade with the S&P500 down another -0.8% and now down -3.7% over the past week.
OIL FIRMS
The oil price in the US has held has risen +US$1 to just on US$60.50/bbl and the international Brent price is now just over US$64.50/bbl.
CARBON PRICE STAYS DOWN ON TINY VOLUME
There have again been very few trades today and the price has firmed ever-so-slightly to $43.50/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 FIRMS
In early Asian trade, gold is up +US$40/oz from this time yesterday, now at US$4060/oz.
NZD LOWER
The Kiwi dollar is down -20 bps from this time yesterday at just on 56.4 USc. Against the Aussie we are down -30 bps at 86.8 AUc. Against the euro we are down -10 bps at 48.7 euro cents. This all means the TWI-5 is down -15 bps at just under at 61.1.
BITCOIN STAYS LOW
The bitcoin price is now at US$92,691 and up +1.5% from this time yesterday. Volatility has been moderate at just on +/- 2.3%.
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63 Comments
Lower dairy prices sound good to me. What has high dairy prices achieved?
Try thinking deeper.
Dairying is the process of turning fossil energy stocks - finite ones - into food energy stocks. In the case of NZ milk, I reckon you could count 20 calories of oil, to one calorie of produced food.
In that light, food - all food - is way too cheap to reflect the draw-down.
But to understand that, needs an understanding of the way energy underwrites money - and few choose to take the opportunity to learn that inconvenient fact.
If only there was someone to keep telling us that.
The current costs reflect the current climate. The current climate isn't in perpetuity. But, until it changes.....
Weeeee!
What has high dairy prices achieved?
There is this thing called the terms of trade, it's actually very important for a whole host of reasons, not the least of which is lower inflation and our overall standard of living and quality of life. You get the gist...
The average NZer isn’t getting the gist. We were much better off a few years ago when those terms were much worse.
I do understand it is somewhat important, but often overrated. Japan normally has a good trade balance yet has lower GDP per capita and lower wages than NZ.
You asked why higher dairy prices are good, I told you.
Being much better off a few years ago has absolutely zero to do with lower dairy prices.
Things felt much better because we could sell each other houses for record tax free profits and labour where borrowing billions to stimulate the economy...., some of us did mention things could not last.
National are still borrowing billions, so are the peeps. The farmers are selling off their value add assets. The economy is knackered, businesses are closing all over town. Good times.
Our rural towns have been gutted. Timaru and Oamaru I heard are really struggling. Apparently, there are now supermarkets that specialise in food at or past their use by dates? Boarded up shops etc etc.
Sounds bleak.
Plenty of dairy jobs out there. We have to import foreign labour to do it because kiwis dont want to do that work.
Perhaps we will start to value solid jobs again.
There are some really well paid jobs in the rural areas that someone with minimal experience can do. As there is a dearth of young people, and we have some quite lucrative export businesses.
But the default human mode is to occupy a city, and complain all the good real estate is already owned by people wealthier than you.
Waiting for some silly comments to follow the falling dairy prices.
Some city folks seem unaware of how we pay for the vehicles they drive, the petrol they use, the computers, the phone, the microwave, and on and on.
Apart ,of course, from the continued overseas borrowing now ingrained in NZ society.
Over the last couple of years farming returns have been one of the few industries in NZ to continue to succeed and keep us afloat.
However shouting from the rooftops that cheese will drop 20c a kg will be tomorrows headline..
I’ll bite with another silly comment.
Dairy prices have been high the last few years. But our economy? And the government tax take?
I am being a bit facetious, I would actually prefer dairy prices to be high. But I don’t think exports are the only aspect of a good economy.
No, but in an environment where we can't produce everything we want, it helps we have some sort of international income.
We could look at the other side of the equation, for example becoming less reliant on oil would help. Maybe some kind of discount for buying an electric car instead of a gas guzzling ute for example.
both are made offshore needing foreign cash to purchase... next stupid question?
They both are purchased offshore, but one needs a supply of offshore oil for its lifetime and the other doesn’t.
We obviously need foreign cash to some extent, but we’d be better off reducing our dependence on it than praying for high dairy prices.
The time delay for an electric car to compensate for an ICE's fuel usage is about the usable lifespan of the vehicle.
Discounts for EVs might swing some new car buyers, but the catastrophic depreciation of them indicates overall consumer value of these vehicles is far lower what the state could subsidize them for.
Try insuring them, cost is outrageous
Thanks to the deflationary nature of much technology/software, we tend to think there's sweet cheaper hacks for many of the legacy processes and products we use.
Quite often we're already doing things the cheapest way.
All new cars have catastrophic depreciation don’t they? Look at what you can pick up a 5 year old ICE BMW for.
Besides, the clean car discount wasn’t just for pure EVs, it applied to all fuel efficient vehicles, and applied a penalty to all guzzlers. If a hybrid costs the same as a pure ICE, most would buy the hybrid, and the fuel usage is significantly lower.
All new cars have catastrophic depreciation don’t they? Look at what you can pick up a 5 year old ICE BMW
That's a bimmer, who's running costs jump exponentially as they age. Not a good example.
I can dig you up some stats if you want, but EVS are the worst depreciating vehicles, by a lot. A 2nd hand EV version of an ICE car is often worth half has much. The market simply doesn't value their promoted benefits at a rate that can sustain their cost.
The economics of hybrids are fairly self evident, and don't require additional subsidization.
A lot of previous EVs have been in a similar category to BMW; overpriced to start with and not reliable in the long term. I think that will improve pretty quickly, more recent batteries seem to be doing well.
If hybrids were a no brainer, we wouldn’t be buying any non hybrids. But we do because they are “cheap”
Even EVs that are relatively good still get poor resale. If people won't pay half the price after only a couple of years that should indicate the level of market enthusiasm, and how far a chasm a government would need to subsidize.
People buy non hybrids for a myriad of reasons, that price alone won't compensate for.
In short, the theory is lovely, we buy EVs, and won't import fuel, big savings. The reality is a little more complicated, and also dependent on probably another decade or two of product development for majority percentage of market penetration, if ever.
I think you are getting lost in Boolean logic; a subsidy won’t make everyone buy an EV or hybrid so there is no point. But it would make a lot of people make different choices, as it did when Labour enacted it. And over time that could change our balance of trade. Won’t happen over night.
I'm explaining how the reality of the theory is playing out.
- initial uptake has waned as early adopter types have purchased
- sales growth requires massive discounting to shift units; China has invested half a trillion dollars into this, has over 100 EV manufacturers, and you can count the profitable ones on one hand
- 2nd hand ones are very hard to shift, so demand is low even at heavily depreciated pricing
Either the product mix is wrong, or there's not the consumer demand. Likely some of both. This market will maturate but ultimately needs to do so organically, because for someone like us who are only going to be consumers, we can't subsidize it enough to compensate the expense.
Like, maybe if we had excellent health and education systems, we could look at treating ourselves to an EV. But we're already not affording the basics, do we also need extra cost to make us feel we're somehow more self sufficient?
So the only option is to pray for high dairy prices, we need it to import lots of oil as efficient vehicles might be a little bit worse than guzzlers. And if we import more oil we can have better healthcare and education.
National voter I assume?
If we want to remain part of a global economy, we are reliant on earning significant export dollars. At the moment, that's coming from commodities we have a competitive advantage in producing due to our climate/geography/application. The path to alternatives is longer, more expensive, and far less clear.
If we spend a dollar to save 50 cents, we have even less money for things that already need more money.
I'm not aligned to any political party. I want competent stewardship of the country, I don't need to join anyone's club.
Look at what you can pick up a 5 year old ICE BMW for.
Wouldn't own a Beemer myself. Too many things put in odd places and a hassle to work on when things go wrong unlike the Japanese. Now 1990-2005 toyotas and nissans? They have held value remarkably well as that was the golden era for simple, reliable, durable cars, easy to fix, plethora of spare parts thanks to high ownership at the time of the same models, and less electronics complicating things. Today I could sell my 2001 toyota for more than I bought it in 2019 and it has 350k on the clock, well maintained and reliable.
"Spending less than $1.7 billion means the taxpayer has saved $2.3 billion while still getting the ferries and infrastructure they want, because we have done away with the expensive consultants who hijacked the project by adding more and more infrastructure until Treasury warned the project would cost $4 billion."
https://www.rnz.co.nz/news/political/579360/new-cook-strait-ferries-won…
Let's wait and see what the costs for maintaining/improving/replacing the existing terminals add up to over the next couple of decades.
It's a flaw that the terminals weren't made obsolete.
These ships can been seen regularly visiting Aotea Quay Wellington to unload vehicles.
What's your relationship to the National Party?
Probably as much as some other people's relationship with reality (& avoidance of irrelevant ad hominem innuendo). Zero.
Similar to Trumps relationship to Clinton?
both seem hard dogs to keep on the porch?
We’ve got a half arsed solution that still costs a lot due to cancellation of the existing work and ferry purchase, neither of which Winston includes in his costing.
And another thing that always gets forgotten is a lot of that cost would have come back in tax. The companies and people designing and building those new terminals would have paid lots of tax, spent their income in the local economies, and stimulated the economy. I’d be surprised if they’ve saved a cent overall.
I hope you/Winston are right. If the current scenario blows out any more than Labour was going to write the cheque for, then this will be Winston firsts nemesis (said that about a year ago). Of course Labour writing a cheque is about equivalent to how long is a piece of string. Hopefully Treasury's or their consultants estimate weren't too far off the mark on their last prediction.
Approx timeline and costs. 2021 detailed business case $1.45bill. Nov23, Treasury $2.61bill. Late 23 $3bill+. Apr-Jun24 no costs located but revised scoping. Courtesy chatgpt.
When faced with the $3B+ uncosted estimate Labour (Grant Robertson) refused to write the cheque 6months before the election, did nothing & gave National the hospital pass.
And if he’d committed billions before the election you would have criticised him too.
I think they both got it wrong. First Labour for letting it blow out so much, then National for just cancelling it instead of looking at cutting it back a bit.
They did cut it back. They determined several billion dollars for roll on roll off freight facilities would be hard to recover.
Which they're probably right with, anything 150ks or more from Wellington or Picton would be better off sea freighted than railed between the islands (freight by water being usually cheaper than freight over land).
They didn’t cut it back, they canceled and started from scratch. But when you take into account the cancellation costs, the time lag for the project benefits, the unemployment and economic penalties, the new facilities that would last much longer, and the fact we won’t have rail, it seems like a bad call. Maybe the correct call in the first place, but not after you’ve bought the boats and done some of the work.
Agree with all this... except your comment they won't have rail? Pretty sure Winston made sure the new ships are RORO enabled...
So total current cost is ~$2.3b, given the 600-700m cancellation costs. For ferries that are more expensive and worse.
Remember this is an initial cost, pretty much always this balloons over the next few years. We will basically be lucky to come in under the $4b mark, for a significantly less future proof outcome. Winston is being disingenuous about saving billions and he knows it.
Infrastructure simple cost more year after year. Delaying critical infra for a few years means same cost for worse outcomes.
More rental properties available and fewer prospective tenants are forcing rents down in most parts of the country. Advertised rents on Trade Me Property have dropped to a two-and-half-year low.
As renting is cheaper then buying and prices are stagnant, it looks like paying interest is dead money...
Some of us still like to own their own home but.
It’s hard to see why anyone would invest in property right now. So many better options for speculation, and the yield is so bad.
nek minut investors start selling
I looked into it for a few seconds as I feel this could be the bottom of property prices, although I acknowledge there is a big risk it isn’t (for reasons you have mentioned). But the potential upside doesn’t seem that much, maybe a small capital gain and small yield after all the expenses. And possibly a capital gains tax that doesn’t just tax the gains, but inflation too.
Imagine you bought a 1mil rental now, and made 3% per year capital gain while CPI ran at 3%. Labour get elected, enable their capital gains tax. After 10 years the house is worth
$1,349,354, but in real terms it’s the same as when you bought it. But you owe 98k in tax if you sell it.
Indeed.
absolutely! house always wins
“To grow to 10 million population … New Zealand would need an average net migration of around 125,000 per year, which would require a policy and infrastructure shift.”
"Labour crunch: NZ is facing a workforce shortfall of 250,000 in next 20 years"
https://www.nzherald.co.nz/business/labour-crunch-nz-facing-250000-shor…
https://www.rnz.co.nz/national/programmes/checkpoint/audio/2019013366/d…
By 2050, they'll be please to be down to 2 million, and aiming for less.
Because solar acreage per head, will be the only - repeat only - yardstick. The underground fossil acres will all be gone, and/or unavailable.
And it takes a surprising number of acres, to support one human.
my 15H will support me
Unless your lower back is shot and there's not enough resources to get the operation you require in any timely manner for you to be capable of working the promised land....
Because solar acreage per head, will be the only - repeat only - yardstick.
Patently not true. We have lots of other things to burn for fuel. We did have machines and stuff before oil, aye.
The underground fossil acres will all be gone, and/or unavailable.
Or just, kinda expensive and limited to specific use.
Agriculture is 5% of our energy usage. No one should starve.
Life would be very different.
Should be a good time to be young then. Pick of jobs. Or just join the bus west. How are those crap rental yields going?
ANZ offering 1.5% cash back of total loan amount for new home loans. Not a rate drop but certainly shaking things up...
With the 1 year swap rate at 2.44%, how can banks charge 4.5% for 1 year?
They have to maintain the billions of profit. Sucking NZ dry one over priced house at a time.
China’s debt shock is coming. Our high house prices won’t protect us
Within three years, Beijing must rebalance from investment to consumption, putting downwards pressure on iron ore prices. Australia’s economy isn’t ready.
Over the weekend, China’s busted property market quietly clocked up another unwanted milestone: house prices have been falling for 40 straight months. October’s rate of decline – 3.5 per cent on an annualised basis – was the fastest in a year.
Countless column inches have been dedicated to China’s property woes in the past decade. But it’s notable that the latest data came just weeks after Goldman Sachs increased its forecast for Chinese gross domestic product growth this calendar year from 4.9 per cent to 5 per cent.
It'd just be easier to have a daily memo that there's potential disaster at pretty much every juncture.
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