A review of things you need to know before you go home on Wednesday; some TD cuts, property value rises modest, labour's inflationary teeth, used import flow slows, Fonterra recovers, swaps little-changed, NZD soft, & more

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes today so far.

TERM DEPOSIT RATE CHANGES
NBS has cut term deposit rates. FE Investments also cut their 18 month rate by -10 bps.

PROPERTY VALUE RISES SPOTTY
Property values in most parts of Auckland are now below October last year, while Dunedin is up +15%. Average housing values are rising in most places but at a slower pace than a year ago, according to QV data.

PAY RISING FASTER
Pay settlements see annual wage growth hit a 10-year high with weekly earnings growth up +3.7% pa in the September quarter, the same rise as in the June quarter and the highest since the March 2018 quarter. But despite the obvious cost-push impact, most of this is in the public sector with the private sector rising at +3.3%. Rising minimum wages also put upward pressure on labour costs. Analysts however don't see this data to be a game-changer for the RBNZ. Oddly, most analysts focus on the "labour cost index" rather than the "weekly earnings" data and therefore discount the underlying cost impacts. Faster rising pay will positively support retail sales (and rents, and mortgage payments).

WHY OUR 4.0% IS BETTER THAN THEIR 3.6%
The jobless rate rose in September to 4.0% (up from 3.9%) - both 'actual' rather than seasonally adjusted numbers reported elsewhere. The youth rate (15-19 year olds not in education or training) dropped to under 16% (22,200 people), but that must be seen in the context of maturity - when they age ten years, the 25-29 year olds have a jobless rates down at 3.9% (or 12,200 people). On the same international basis, the jobless rate in Australia is 5.3% and the US jobless rate is 3.6%. (The advantage New Zealand has is that so many more people are engaged in our labour force; our employment rate is 77.4% vs Australia at 74.5% and the US at just 71.5%. If the US had the same participation rate as New Zealand, another 37.5 mln people would be working there! Their jobless rate, low as it might be, ignores those discouraged workers who have given up and are no longer considered to be in the American workforce.)

LEADING US DOWN
The used vehicle import industry is on a down slope. Used car registrations fell -3.6% in October, with used small car registrations falling -1.4% and used large car registrations falling -5.4%. It is a down-trend that is expected to continue as the low-growth economy settles back down.

GOING UP QUICKLY
Fonterra's FCG share price is up +3% today from yesterday, now at $4.17. That is a gain of +31% from September 20. Today's dairy auction prices, up +3.7% in two weeks, validated the recently announced rise in the payout forecasts. Now shareholders think that Fonterra will also benefit from higher product prices. Dairy commodities are shining as Australia and the US struggle with dry conditions and demand from China stays high.

LEAKING CONFIDENCE
International equity markets have been universally flat today, on Wall Street, in Europe, and now with the openings in Asia. Ditto the ASX. The outlier, despite the Fonterra trend, is the NZX50 which is down almost -0.8% so far today. Large declines are being posted by A2 Milk, Meridian Energy, Auckland Airport, Ryman, and Spark, all of which have lost more than -1% so far today. Maybe those high labour cost numbers have caused the reaction.

BUYING A CLIMATE CHANGE HEADLINE
Mission Control for an international space mission to help monitor methane emissions will be based in New Zealand, with the Government putting $26 mln towards the state-of-the-art satellite.

'WE ARE TRUSTWORTHY'
A survey run by the auditors trade association 'revealed' that the public trusts auditors and their audit reports. This conclusion was drawn from a survey of 514 retail investors.

WHY THE GOLD PRICE IS STALLED
A sharp rise in the international supply of gold in Q3-2019, especially from recycled/scrap sources, has pushed gold supply up to an 18 month high, which probably explains why the gold price is languishing. Gold bugs talk up 'central bank' demand (by the autocrats of Eastern Europe), and the rise in ETF demand, but they ignore the rather sharp fall-off in jewellery demand (lowest in almost ten years) that goes along with the rise in supply. All data from the World Gold Council.

MORE ON BNPL USERS
New research from Roy Morgan Reserach shows 1.95 mln Australians used one of the latest ‘buy-now-pay-later’ digital payment methods such as Afterpay, zipPay or zipMoney in the year to September 2019, up from 1.38 mln in the previous 12 months. Australians between the ages of 14-34 account for 55.9% of ‘buy-now-pay-later’ users, with those in the 25-34 range making up 33.5% of all users. To put this in perspective, that age group represents only 18.1% of the population 14+, which means that those aged 25-34 are nearly twice as likely to be using a ‘buy-now-pay-later’ system as the average across the whole population.

LOCAL SWAP RATES EASE OFF
Wholesale swap rates are now rising as steeply today. The two-year is down -1 bp, the five year is up +1 bp and the ten year is up +2 bps. The 90-day bank bill is unchanged at 1.14%. Australian swap rates are little-changed ahead of their RBA cash rate review. The Aussie Govt 10yr is up +4 bps at 1.25%. The China Govt 10yr is down -4 bps at 3.28%. The NZ Govt 10 yr yield is down -1 bp to 1.35%. The UST 10yr yield is up +5 bps to 1.84%.

NZ DOLLAR SETTLES BACK FURTHER
The Kiwi dollar has slipped back again, down to 63.8 USc now. Against the Aussie we are down more than -½c in a day, now at 92.4 AUc. We are unchanged at 57.6 euro cents. That means the TWI-5 is just under 68.8.

BITCOIN FLAT
Bitcoin is now at US$9,316 and little changed from this time yesterday. The bitcoin price is charted in the currency set below.

SITUATION NORMAL
A quck look at the soild moisture chart below shows we are at a normal place this year with rainfall - as we were last year. And our hydro lakes and river flows are at long-term normal levels. Plus Auckland's water storage reservoirs are also at normal levels. All boringly normal witrh no sign of systemic change or variation.

This chart is animated here.