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A review of things you need to know before you go home on Tuesday; more TD cuts, consumer confidence slips, online retail booms again, Green Bond details, swaps unchanged, NZD firmer, & more

A review of things you need to know before you go home on Tuesday; more TD cuts, consumer confidence slips, online retail booms again, Green Bond details, swaps unchanged, NZD firmer, & more
ID 22702269 © Daniaphoto | Dreamstime.com

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

MORTGAGE RATE CHANGES
None to report today.

TERM DEPOSIT RATE CHANGES
NZCU Baywide and its affiliates all cut term deposit rates today. Bank of Baroda did so as well.

WORSE FINANCIALS HURTS CONFIDENCE
Consumer confidence slipped again in September and is languishing at levels we last saw during the financial crisis in 2008, says the Westpac MM version. Increasing numbers of households are reporting that their financial position has deteriorated.

A STRONG RESURGENCE ONLINE
Returning to lockdown mode has supercharged online spending, as it did in the first lockdown. August online sales were up more than +27% compared with the same month in 2019. Domestic online transactions were actually up more than +50%, whereas international transactions were down -6% on the same basis.

HEARTLAND BOOSTS AUSSIE REVERSE MORTGAGE FUNDING
Heartland Group Holdings says it now has access to reverse mortgage loan funding in Australia of A$1 bln after putting in place an institutional investor funded A$142 mln syndicated loan securitisation transaction. Heartland says the 30-year transaction was arranged by Macquarie Bank’s Structured Lending team and has leverage of 98%. M&G Investment Management is a cornerstone investor. Heartland Seniors Finance operates in Australia where it has about a 26% share of the reverse mortgage market.

AUCKLAND COUNCIL GREEN BOND DETAILS
There are more details available for Auckland Council's 30-year green bond offer. It's an offer of secured, unsubordinated, fixed rate green bonds for $300 mln and "with the ability to accept oversubscriptions at Council’s discretion". And the coupon interest rate will be 2.95%.

BIG TICK
The Commerce Commission has blessed Fonterra's milk price calculations, under the milk price monitoring regime in the Dairy Industry Restructuring Act.

BNPL WINS BIG IN AUSTRALIA
The Australian Competition Tribunal found that their competition regulator, the ACCC, failed to show that using BNPL products to buy solar panels would result in any consumer harm. It is being hailed as a big win for the BNPL sector.

IMPRESSIVE REBOUND ...
China has reported that its industrial production rose +5.6% in August compared with the same month in 2019. Electricity production grew +6.8% which was impressive and verifies the factory output claims. That is in stark contrast to most other countries. The US will report its result for this metric tomorrow.

... BUT NOT EVERYWHERE
China also says its retail sales grew, and that was better than the no-change expected.

ANOTHER CLIMATE RISK
The US National Academy of Sciences has published findings of clear satellite evidence that two huge ice sheets are starting to shear off, and move into the oceans. They include so much material that they could account for as much as a +3m rise in ocean levels, the study warned. (Research link currently behind paywall.)

GOLD PRICE RISES AGAIN
In Asian markets, the gold price has risen on top of the London and New York rises, up +US$15/oz from this time yesterday to US$1964. Silver is up proportionately more.

EQUITIES UPDATE
On Wall Street, the S&P500 eased off some gains later in the trading session but still ended up +1.3%. Shanghai has opened up +0.2%, Hong Kong is up +0.7%, but Tokyo is down -0.5% in early trade today. The ASX200 is down -0.1% in early afternoon trade while the NZX50 Capital Index is up +0.1% near the close.

SWAP RATES LITTLE-CHANGED
We don’t have the final data for today yet and if it is significant we will update it here. The 90 day bank bill rate is unchanged at 0.30%. The Australian Govt ten year benchmark rate is unchanged at 0.95%. The China Govt ten year bond is down -3 bps at 3.16%. The New Zealand Govt ten year is now at 0.61% and also little-changed. The US Govt ten year is unchanged at 0.67%.

NZD FIRM
The Kiwi dollar is still firming and is now at 67.2 USc as the USD softens. Against the Aussie we are little-changed at 91.8 AUc. Against the euro we are flat at 56.5 euro cents. That means our TWI-5 is now at 70 although most of that rise occurred last night.

BITCOIN FIRM
Bitcoin has risen as well although most of that change was last night. It is up +4.0% at US$10,766.

This soil moisture chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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28 Comments

The world is pretty much the same level of insane and screwed as it's been. But on the plus side it looks like we're allowed out of the house tomorrow.

Can someone enlarge on Heartland banks 'Leverage of %98' for me?

11
up

Good article on the growing Chinese presence and likely intentions in Kiriabti.
Despite the long time New Zealand presence in Kiribati, the developing situation is being largely ignored by the New Zealand mainstream media.

The government’s party development manifesto, the "Kiribati 20-year vision," “looks set for Kiribati to be integrated into China’s Belt and Road Initiative, and gives highest priority to building two transhipment hubs - major ports in a tiny country that has no economic market for such facilities.”
“The proposed major island-building and development of so-called transhipment hubs (in Kiribati) raise the prospect of Chinese military bases, or, at least initially, potential dual-use facilities, being established right across the center of the Pacific, stretching along the equator for nearly 3,500 kilometers from Tarawa Atoll to Kiritimati Atoll. China also has a mothballed satellite tracking station in Kiribati, which may now be reactivated.”

Kiritimati Atoll lies due south of Hawaii, so China would have bases extending across the central Pacific underlying both the US presence in Guam and Pearl Harbour.
Until the start of this year, Australia and New Zealand were the only two countries with a presence in Kiribati with embassies and aid programmes - but it looks like we are being displaced in the larger geo-political situation.

https://www.maritime-executive.com/editorials/china-expands-its-island-b...

I guess China raising the country above sea level to protect its investment will have the desired effect. The alternative is for the inhabitants is to migrate to New Zealand to keep their feet dry. If China has done its long-term 'groundwork' well, it will wait until the locals have departed?

And the Chinese increasing fossil fuel emissions will help drive up that sea level.

bw
Kiribati has made the statement that it was not worthwhile them having a long term development strategic plan.
Rather than New Zealand as a potential destination, a few years back they purchased land in Fiji as their "lifeboat" when sea level rises made Kiribati uninhabitable.
China with its experience and expertise in pumping sand to build up islands no doubt makes China more attractive alternative to NZ's commitment to carbon emissions.

Great article of China's handiwork in the Maldives with a photo well worth seeing.
https://maldivestimes.com/a-new-island-of-hope-rising-from-the-indian-oc...

Of course simply done as a gesture of no strings attached "aid".

'The city of Hope'
Dystopian...

They just cut their diplomatic tie with R.o.C Taiwan in Sept 2019 and engaged with China... what can happen in a year, compared to what western colonialism has done for centuries

Australia still standing up to Chinas political influence, and stands by their demand for an inquiry into the origin of the Wuhan virus.
https://www.reuters.com/investigates/special-report/australia-china-rela...

At least our neighbours have some guts...

I worked for a time in Kiribati, and spent time in Kiritimati.

- The English used it as a Nuclear testing ground
- The americans built a large military base there (and also in the Phoenix Group). The also introduced fisheries laws specifically designed to disenfranchise Kiribatis rights under the laws of the sea.

Is it any wonder their Government would rather talk to vipers that might at least save their whenua, even if it comes at a cost?

Is it any wonder

Looks like Dr Bloomfield has a troll. Single source of truth & all.

Questioning the Government makes you either a hater; a conspiracy theorist; a troll; or, quite simply, unpatriotic. (1)

While the Director-General of Health thinks the latest COVID-19 outbreak "must have" come through the border, the Prime Minister says there's still no evidence of that. (2)

Chris Hipkins says the podium is the one source of truth. (3).

1. https://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=12...
2.
https://www.newshub.co.nz/home/politics/2020/09/coronavirus-ashley-bloom...
3.
https://youtu.be/jFPb9wN3LK8
Part time health minister doing a 1pm.

Don't follow your point. Yes the outbreak almost certainly came through the border, but there's no direct evidence. So... ?

I think what we have here is a troll discovering a colleague.

And like magic...

Prime Minister Jacinda Ardern has admitted the COVID-19 outbreak "obviously hasn't come from within New Zealand" after the Director-General of Health said it must have come through the border.

https://www.newshub.co.nz/home/politics/2020/09/jacinda-ardern-admits-co...

PM now back on same page with Dr Bloomfield.

BUT, always a but.....
But the Prime Minister said there is still no evidence to suggest the latest outbreak came from the Government's managed isolation and quarantine (MIQ) facilities or that it was passed on through border workers.

- doesn't like giving ground, even when position precarious.
Terribly wasteful as comms spectrum taken by this positioning crowds out practical pragmatic messaging such as therapeutics, and merit of elimination.

For example. Niall Ferguson;
https://youtu.be/OQ4bfsElVNs
From Oxford research:
No correlation between stringency of govt meaures (lockdowns) and health effects.
Great correlation between stringency of govt measures (lockdown) and economic damage.

Yours is the only comment I've seen about this......perhaps you're just a little obsessed?

Nobody sells Doom & Gloom like the PM.
Reviles in it.
Maybe its the go-to activist key, fear as an influencer, be the victim, hence the me-be-carer vibe.

- remember you have all the messed up organizational skills, inability to deliver, unable to manage/grow a ministerial team.
- her comms style is effective to some as it uses the tele tubbies /pajamas party channel that connects with some.

Look at the Bledisloe games, when pressured, the whole quaratine position buckles.
- her original position was never only health driven.
- her original position can never survive the real world, doesn't work in reality.
Just like lots of her other policies & initatives.

Seems extremely obsessed. I've got a couple of friends like that, the incessant screeching whenever Labour fumbles, no matter how minor, is getting quite tedious. Absolute radio silence when National fumble while they are in power. Hell, National could double their taxes overnight and i'm sure they'd be jumping for joy.

Everything is a big conspiracy theory.

Perth Mint Gold Tokens available to NZers from today through Independent Reserve in Australia. Monumental day.

https://www.perthmint.com/media-independent-reserve.aspx

Certainly worth a look. Wait until the robin hooders catch on!

RobinHood focuses on the ETFs. This is entirely different.

Dah I know that, it’s the type of person lol.

Over the ditch,

It's estimated that around one in five customers who opted to defer their home loan repayments are now ghosting their bankers.

https://www.afr.com/companies/financial-services/one-in-five-borrowers-h...

Ouch. Some of these will end in foreclosure.

The deferral scheme has been extended for another four months. 2021 is going to be a humdinger.

I've still got a job, so havent tried some sob story to get reduced rent here in Sydney. That said, I think that puts me in a minority as my property manager is treating me like a king. Phone calls are being returned and repairs addressed. Phenomenal.

The rental protection scheme ends in a fortnight, giving landlords the right to boot tenants out for non payment. I would not be surprised to see properties for sale as a result of this, given the reduction in rent may not make it viable for the owner any more.

The govt has to turn the tap off at some stage, and it ain't going to be pretty.

Shock horror! Hosking inaccurate and misleading? No, never!
Pretty defensive piece from NZME.
How lowly our 'journalism' has sunk in this country.

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12365056

Guess who a large swathe of the public trust.

Days to the General Election: 21
See Party Policies here. Party Lists here.