A review of things you need to know before you go home on Friday; ANZ joins in cutting TD rates, Fonterra profitable again, NZGB 5yr goes negative, NZD jumps, & more

A review of things you need to know before you go home on Friday; ANZ joins in cutting TD rates, Fonterra profitable again, NZGB 5yr goes negative, NZD jumps, & 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
ANZ has moved to cut its TD rates now too.

BACK IN THE CREAM
After two years of hefty losses, Fonterra has returned to profit ($659 mln) and is strong enough to resume paying dividends, even if it is only a tiny 5c/share. It is paying a final milk price of 7.14/kgMS its best since 2014. And it is retaining 38c/kgMS, its most ever and building some resilience - the bane of producer-owned cooperatives. Sales rose +5.3% to $21 bln, a record high. Staffing fell to 19,600 with most of the reduction offshore. 11,500 people work in New Zealand.

BEEFING UP MORE?
Rabobank says that China's protein deficit problem stemming from its ASF crisis will last a long time and will only be good for New Zealand's beef exports. They claim eating habits in China are moving toward beef. China already takes more than 40% of our beef exports - relatively high considering China takes 28% of our overall export trade (year to July 2020 data).

MORE NEGATIVE RATES
Today the five year NZGB bond is being quoted at -0.02% after falling -4 bps today. Not only are live secondary market platforms reporting this, the RBNZ's benchmark data records it as well. Terms shorter are all unchanged and positive. Terms longer are all lower and still positive. No other tenor is about to go negative.

TOPPED OUT?
The latest data on iron ore prices suggests they may not only have topped out now, but be heading lower. It's early days on such a conclusion, but we have had seven straight weeks of prices near modern high levels, but this week the range down is notable.

A SURGING FORECLOSURE PROBLEM
In 2018, a data service reported 180,000 home foreclosures in China. In 2019 the same source reported 300,000. To the middle of September 2020 they are saying 1.25 mln homes were foreclosed on by banks as vast numbers of people struggled with meeting mortgage payments due to "deteriorating job prospects and shrinking income". How credible the source is is up for conjecture, but it is part of the giant Alibaba service. You would think they would know.

BEEFING UP TOO
The US Fed balance sheet is rising again, up +$54 bln in the last week to September 16 and the fastest rise in 15 weeks. In the period from mid-May to early July, it was well over $7 tln and then fell back steadily. Now it is back up sharply to US$7.06 tln.

GOLD PRICE RISES
In Asian markets, the gold price has risen after the New York markets closed. It is currently at US$1953 which is +US$8 higher than the closing New York price. And that was +US$9 higher than the earlier closing London price of US$1936. Silver is not following gold up.

EQUITIES UPDATE
On Wall Street, the S&P500 had a tough day and ended of its session down -0.8%. The futures market suggests it will open tomorrow -0.3% lower again. That same vibe is not affecting open markets in our timezone with Shanghai up +0.4% at the open, Hong Kong up 0.3% at its open, but Tokyo is flat after starting positive. The ASX200 is currently +0.1% in early afternoon trade, and the NZX50 Capital Index is down -0.6%. The ASX200 is heading for a weekly gain of just +0.4% while the NZX50 Capital Index is heading for a weekly loss of -0.7%.

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 up +2 bps at 0.93%. The China Govt ten year bond is down -2 bps at 3.14%. The New Zealand Govt ten year is now down -3 bps at 0.55%. But the NZGB five year is now quoted negative at -0.02% pa (see above). The US Govt ten year is unchanged at 0.68%.

NZD JUMPS
The Kiwi dollar is sharply stronger, up almost a full +1c from this time yesterday at 67.8 USc. Yesterday's GDP data hasn't hurt the Kiwi. It's a change that all happened after the RBNZ fix at 11am this morning (so is not in our chart below). Against the Aussie we are up at 92.6 AUc. Against the euro we are firm at 57.2 euro cents. That means our TWI-5 is now at 70.6 and that is its highest since the end of January 2020.

BITCOIN HOLDS
Bitcoin is unchanged today at US$10,943.

This soil moisture chart is animated here.

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

Daily exchange rates

Select chart tabs »

The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
End of day UTC
Source: CoinDesk

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

31 Comments

Its very hard to get an idea of what is going on in China.
But of course property speculation is rife. I am told that there is favourable tax treatment on owning investment property just like here....
Plus the added kicker that in order to get the best possible wife, first you need an apartment, preferably foreign car etc etc....

Today the five year NZGB bond is being quoted at -0.02% after falling -4 bps today.

The RBNZ purchased $100m 2.75% 15-04-25 notes at a weighted average yield -0.038% in today's LSAP operations.

Wow, a nice $3,000 air-drop for every person who uses the dex-exchange uniswap. In fact, one air-drop per account. I know a person who had 21 accounts and claimed them all. I bet IRD is watching: https://www.coindesk.com/uniswap-defi-buzz-uni-token-airdrop

Yes, free internet money. December is the launch of Flare and XRP holders got a similar 'gift.'

Whats the drill
If you have a test don't you stand down until result to hand.

The family of a child who briefly attended a South Auckland primary school while positive for Covid-19 were unaware of the test result at the time, the Ministry of Health has confirmed.

https://www.rnz.co.nz/news/national/426393/family-unaware-of-child-s-cov...

Who would suggest otherwise?

Yes, unless you are a dope.

to go with the Rabo bank on beef

Aquatic product imports fell 10 percent so far this year, reflecting a drop in trade during China's peak pandemic months and Chinese authorities' assertion that frozen salmon, shrimp and other seafood can transmit the covid-19 virus. The value of China's cotton imports is down 31 percent this year, due to a textile industry slowdown.

'The quantity of meats and soybeans imported rose significantly. China imported nearly 2.5 million metric tons of pork in the first seven months of 2020, up 150 percent from a year earlier. Imports of pork offal totaled 837,000 metric tons, up a more modest 26.6 percent. Beef imports of 1.2 million metric tons were up 41.5 percent from last year. The Center did not report poultry imports. Mutton imports were steady and milk powder imports were down 3 percent.'

https://dimsums.blogspot.com/2020/09/chinas-ag-imports-up-13-despite.htm...

The median property price in Auckland is forecast to hit more than $1 million by the end of the year, rising $57,000 in three months – more than many Kiwis will earn in a year.

Wellington was expected to see a $43,200 rise in median house price over that period to $763,200, Dunedin a $31,140 increase in price to $550,140, and Christchurch a $24,750 rise to $519,750, said comparison site Finder.

median-auckland-house-price-tipped-to-hit-1-million-by-end-of-year

#Let'sKeepMoving

Every time house prices rise, NZ becomes slightly more (insert f word here).

despised by the working poor.

in need of Labour to finally deliver on Kiwi Build!

feeble?

awesome if you own a smack of houses.

Awear that politians, whatever their flavor don't want to fix this.

House prices tipped to rise by 10% this year....

And we now know what actually happened, don't we?!
Ireland's Auckland, Dublin, fell 67%.
Like everything, it's all easy looking back.
https://www.irishtimes.com/business/house-prices-tipped-to-rise-by-10-th...

Heh. How's this quote from the article:

A strong economy, full employment and growth in personal disposable income would all drive demand for property.

What gets me is how we’re normalising insanity. This isn’t normal, this isn’t rational and the potential outcomes are possibly very bad for the future of NZ. But hey, banks updated their forecasts so all must be fine :-)

It's just mental ey.
They have totally lost it.

Thanks Adrian Orr. All the young Kiwis are loving the boots being put in.

Whether its road or rail, Auckland's infrastructure is falling apart. 4 lanes on the bridge could be out of action for weeks.

It was hit by a truck, not falling apart.

Maybe it's not resilient enough...one truck?

Two trucks, one didn’t tip over

Such a NZ situation.

Shook my head with laughter when everyone was trapped in Wellington one Friday last year due to two roads being blocked/closed.

Can anyone tell me how to login to not see ads on a mobile device? I’ve subscribed today but signing in via press patron doesn’t send me got the interest website without ads?

you need an ad blocker, like using Brave Browser.

The Warehouse confirms job cuts across NZ.
How many jobs will be shed over the next 6 months across various sectors? Can they be put to use in the primary industries?

Sadly, these kinds of cuts will keep coming for months

Labour executing some helicopter money via a new head office
https://www.stuff.co.nz/national/education/122774439/nzs-new-mega-polyte...

'A “nimble” body set up to run the nation’s 16 '
Labour being able to set up or be nimble???.... Knee jerk certinally but not nimble.