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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19 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!
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.
"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.
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...
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