A review of things you need to know before you go home on Tuesday; no rate reactions yet, house prices at record highs, immigration up +9%, tourist arrivals up strongly, swaps slip, NZD stable, & more

A review of things you need to know before you go home on Tuesday; no rate reactions yet, house prices at record highs, immigration up +9%, tourist arrivals up strongly, swaps slip, NZD stable, & more
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Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No reaction to the ANZ cuts yet. Update: Westpac has followed ANZ with matching rate cuts.

TERM DEPOSIT RATE CHANGES
None to report today here either.

SPRING RISES FOR HOUSE PRICES & VOLUMES
The national median house price hit a record high in September with sales volumes also firmer, the Real Estate Institute of New Zealand says. Auckland is leading the way in the market revival.

IMMIGRATION RISES +9.4%
New Zealand lost 13,577 NZ citizens in year to August, almost double the previous year's loss. But the net gain from migration still almost reached 54,000.

UP, DESITE COMPOSITION CHANGES
Tourist arrivals are changing their source. Arrivals from Australia are up a strong +5.1% in August from a year ago, the USA was up +6.8%. Arrivals from China are well off the boil, down -7.4% year-on-year. And arrivals from Europe are all lower, especially those from the United Kingdom, Germany, France, and the Netherlands. Overall, they are up +2%, similar to the July gain. Locally, Queenstown is the big gainer as an arrivals destination, catering to the Aussies.

UP MORE
The same visitor arrivals data in Australia shows them up and even stronger +6.4% year-on-year. But Kiwis, who make up the largest single group, seem maxed out, with no growth year-on-year. Australia actually got +10% growth of visitors from China, +7.7% from Japan and +8.3% from the US. European visitors fell -3%, led by a -6% drop from Britain.

OWN GOAL?
The recently released minutes for the RBA's last rate review meeting shows they are well aware low rates may be seen by others as a sign of weakness. They are wary of a "negative effect on the income and confidence of savers".

TOO MUCH KIWI EXPOSURE?
Because both the RBNZ and APRA are wanting to ensure the major banks have enough capital in each country in case of economic stress (which could well occur at the same time in each country), the banks are scrambling to balance the resulting dual but different regulatory requirements. ANZ is the most exposed and advised the markets today of its progress.

INFLATION RISES IN CHINA
China's September CPI rose +3.0% year-on-year and a six year high, boosted by high meat prices (especially pork) and high prices for fruit (+8%). Pork prices were up +70%, beef was up +19% and lamb up +15%, eggs up +8%, chicken +6%. Milk however was up only +1.1%. Vegetables were down -11%. TCM was up +5.2% and Western medicine services were up +4.7%.

SWAP RATES SOFT
Wholesale swap rates are lower today. The two year is down -1 bp, the five year is down -2 bps, and the ten year is down -3 bps. The 90-day bank bill rate unchanged however at 1.04%. Australian swap rates are higher in a similar move to NZ. The Aussie Govt 10yr is down -2 bps to 1.02%. The China Govt 10yr is down -1 bp at 3.19%. The NZ Govt 10 yr is also down -2 bps to 1.19%. The UST 10yr yield is leading them down, and now at 1.69% and down -4 bps.

NZ DOLLAR HOLDING
The Kiwi dollar is holding unchanged from this time yesterday at just on 63.1 USc. Against the Aussie we are a little softer at 93 AU cents. Against the euro we are still at 57.2 euro cents. That means the TWI-5 is still at 68.4.

BITCOIN HOLDS
Bitcoin is holding today at US$8,320 and that is a marginal rise. The bitcoin price is charted in the currency set below.

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The recently released minutes for the RBA's last rate review meeting shows they are well aware low rates may be seen by others as a sign of weakness. They are wary of a "negative effect on the income and confidence of savers".

Talk is cheap. Tax paying citizens have forward liabilities that mount up in present value terms every time interest rates are cut.

No less, the present value of the cash flow of wages is increased by the rate cut, penalizing wage earners indiscriminately. In our conception the cash flow of wages comes about as a result of bargaining whereby the wage earner purchases the cash flow of wages against the delivery of his labor. The purchase price of the cash flow has just been increased by the cut in interest rates. There is no adjustment on labor's side of the bargain: the wage earner is supposed to deliver as before. Link

Yes not only is it a sign of weakness but it also locks NZ in to a debt trap for current and future generations.

Thanks, for another good read this rainy evening....

All debtors who have borrowed at a fixed rate find themselves in the same hole. They are all trapped. There is a stealthy and indiscriminate transfer of wealth from debtors to creditors. To add insult to injury, debtors are bombarded by government and central bank propaganda.... "You will love the lower interest-rate environment that is yours free of charge!” The truth is that, in effect, a great injustice has been perpetrated. A huge transfer of wealth from debtors to creditors has been put into effect underhandedly.

Consumption woes hitting hard across the ditch. People furnishing the million-dollar mansions differently? Ikea?

Furniture retailer Nick Scali warned profits could fall as much as 32 per cent in the December half after cautious consumers postponed purchases of sofas, dining tables and bedroom furniture.

https://www.afr.com/companies/retail/nick-scali-warns-first-half-profits...