A review of things you need to know before you sign off on Tuesday; Rabobank raises longer TD rates, NZIER survey finds optimism ahead, consumer spending weak & stressed, NEVs rule, swaps rise, NZX firmish, NZD holds, & more

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
WBS (Wairarapa Building Society) has added a three year fixed rate offer, of 5.75%. All current mortgage rates are here. And note, you can compare mortgage offers with our unique calculator that takes into account other costs and cashback incentives, here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Rabobank increased its TD rates for all terms 18 months and longer. WBS has also launched a three year TD rate at 4.55% pa. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

BUSINESS CONFIDENCE (ABOUT THE FUTURE) SURGES
The Q3 NZIER survey finds business optimism bounced back during the quarter as firms expect stronger economic recovery over the next 12 months. However they report patchy conditions here and now as an increasingly number of firms bemoan a lack of sales currently.

WEAK & NOT GETTING BETTER
Consumer spending continued to run below year-ago levels in August and September, as consumers coped with rising petrol prices, rising interest rates and bad weather. That is according to Paymark who said their transaction data shows September  reaching only $3.6 bln, which is down -1.3% from the same month a year ago. Remember, their data does not adjust for inflation (4.1%)

RISING FASTER THAN INCOMES
That was followed by ANZ's card tracking data for September, also released today. It was up +0.5% from August, to be +5.8% higher than the same month a year ago. Annual spending growth is positive across all groups. But much of this is because spending at service stations was up +2.8% in the month as fuel prices lifted, up +14.2% for the year. Spending at second-hand stores is also lifting strongly, in contrast to a sharp fall when oil prices first jumped. Spending on public transport was up +10% from a year ago.

NEVs RULE
Yesterday we noted the high level of new car sales in September. But we missed an interesting point of context. More than 70% of those new cars sold were NEVs, that is EVs or hybrids. That level has been climbing sharply recently, and was only exceeded once in the past - in December 2023, the last time you could get a government subsidy. It does rather prove the point that the subsidy wasn't actually needed. Buyers will buy if the features justify it.

THINGS GETTING TIGHT
With only 32 days until the general election, the polls and debates are coming thick and fast. The latest one seems to have the Nats atrophying quickly in a slide that must be worrying them - especially given the NZIER survey today. There are now only 11 percentage points between them and the Greens in this poll. Ouch.

TOWER INCREASES ITS FULL-YEAR PROFIT GUIDANCE
General insurer Tower has raised its full-year underlying net profit after tax guidance for the September year to be between $69 million and $79 million. This is up from its previous guidance range of $55 million to $65 million. According to Tower, the uplift reflects the insurer’s $45 million large event allowance not being fully utilised during the 2026 financial year, which meant Tower returned to a more “typical earnings profile”. Tower will release full details of its FY26 performance with its financial results announcement on November 26.

NZX50 FIRMISH
As at 3pm, the overall NZX50 index is up +0.2% so far and also up +0.3% for the past 5 trading sessions. It is up +5.1% from six months ago. From a year ago it is only up +1.8% now. Market heavyweight F&P Healthcare is down -0.1% so far today. Gentrack, EBOS, Property for Industry and Tower gain whil Serko, a2 Milk, Sanford and Hallensteins decline.

LOOKING AHEAD TO TOMORROW'S GDT AUCTION
Tomorrows full dairy auction, the first since September 15, is likely to bring mixed results although generally higher in USD. The WMP and SMP prices should be up by about +4% from last week's Pulse event. The milkfats (butter, AMF, etc) might well be quite soft, down about -5%.

"WORST SINCE THE EARLY 1990s"
In Australia, the Westpac-Melbourne Institute consumer sentiment survey for October makes grim reading too. This is how they introduced these results: :"Australian consumers remain stuck in a cost-of-living nightmare that seems to have no end in sight. At just over 80, the latest sentiment Index is amongst the forty worst reads since our monthly survey began in the early 1970s. We have had two others in this unfortunate group already this year – in April and June – with another eight recorded in 2022–23. Altogether this marks the worst period of recurring extremely weak sentiment since the disastrous recession in the early 1990s."

A RECORD NOW WITH INTENSIFICATION TO COME
And just so you know, El Niño is now at near-record levels. Both oceanic and atmospheric indices reflect values consistent with a strong El Niño, with further intensification forecast during the rest of spring (that is, until the end of November).

SWAP RATES RISE
Wholesale swap rates will likely be firmer today, maybe up as much as +5 bps. Keep an eye on our chart below which will record the final positions closer to 5pm. The RBNZ 90 day rate was softer by -1 bp at 3.22% on Monday. Today, the Australian 10 year bond yield is up +11 bps at 5.41%. The China 10 year bond rate is now at 1.68% and unchanged. The Japanese 10 year bond is now at 3.12% and up +3 bps. The NZ Government 10 year bond rate is now at 5.12% and up +4 bps from this time yesterday. (The RBNZ 10 year rate is 'prior day' and was down -1 bp at 5.04% on Monday.) And the UST 10yr yield is now at 5.32% and up +7 bps from yesterday. That last time it was this high was in 2002.

EQUITIES MOSTLY FIRM
The NZX50 has firmed +0.2% from Monday's close. The ASX200 has opened up +0.7%. Tokyo is up +0.2%. The KOSPI is down -0.5% today. Hong Kong is up +0.7% in Tuesday trade while Shanghai is still closed for their public holidays. Singapore is down -0.3% in early Tuesday trade today. Wall Street ended its Monday trade with the S&P500 up +0.7% and the Nasdaq up +1.1%.

OIL PRICES SLIGHTLY SOFTER
American oil prices have eased -80 USc from this time yesterday with the WTI benchmark now at just over US$89.50/bbl, while the international Brent price is just under US$100.50/bbl and down -US$1 despite the renewed Middle East uncertainties.

CARBON PRICE HOLDS
After yesterday's flurry of trades, today there are veery few. The price remains little-changed at $52/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD DIPS SLIGHTLY
In early Asian trade, gold has fallen almost -US$20/oz from this time yesterday, now at US$4140/oz. Silver is down -50 USc at just on US$61/oz.

NZD HOLDS SOFT
The Kiwi dollar is still  just under 56.1 USc and little-changed from where we were this time yesterday. Against the Aussie we are also down -20 bps at 80.4 AUc. Against the euro we are still unchanged at 49.9 euro cents. This all means the TWI-5 is is now just under 59.8 and down -10 bps.

BITCOIN DIPS
The bitcoin price is now at US$85,876 and down -0.8% from yesterday at this time. Volatility has been modest at just under +/- 1.1% again.

HOW THE GLOBAL ECONOMIC FORCES AFFECT US
If you want to catch up on what happened last night, try our Economy Watch podcast, here.

This soil moisture chart is animated here.

Keep abreast of upcoming events by following our Economic Calendar here ».