A review of things you need to know before you go home on Monday; more TD rate cuts, a huge productivity snafu, credit card use down but not out, bond rates soft, NZD stable, & more

A review of things you need to know before you go home on Monday; more TD rate cuts, a huge productivity snafu, credit card use down but not out, bond rates soft, NZD stable, & more
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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
Westpac made late changes on Friday, and ICBC did so today. Both cuts of course. And this review might help.

EASING UP
Cabinet has decided to move Auckland to COVID19 Level 2 at 11:59pm on Wednesday. It will review this decision in two weeks’ time, on October 5, with the aim of moving Auckland to Level 1 on October 7 (ten days before the election). The rest of New Zealand will move to Level 1 at 11:59pm tonight - Monday. These are moves that were signaled last week, so no surprises.

A TEMPORARY FEE REBATE
ANZ has temporarily waived its $7 international money transfer fee for online foreign currency payments made from New Zealand (or Australia) to ten Pacific Island nations. They inclide Cook Islands, Fiji, New Caledonia, Kiribati, Papua New Guinea, Samoa, Solomon Islands, Tonga, Timor Leste and Vanuatu. But their "usual foreign exchange rates" (and this can be where substantial differences build) and terms and conditions will still apply. And for certain currencies, a correspondent bank may charge a fee for processing the remittance. The ANZ fee waiver will end at February 28, 2021.

HARBOUR BRIDGE CONSEQUENCES
A failure to plan and act has led to a sudden and severe traffic problem in Auckland. You can check today's bottlenecks. Engineers may save the day with a speedy remedy, but the whole issue has exposed the vulnerability of key infrastructure to an unplanned event. Fortunately Aucklanders are practiced at working from home and adaption and adjustment will come quickly. But there will be two severe consequences. Firms will lose confidence in the ability of the CBD to ever recover. And secondly, national productivity will take a hard hit as new costs will come with lower output.

DOWN, BUT NOT OUT
Credit card spending
in August came in -4% lower than the same month a year ago. Seasonally adjusted, it was down -5.5%. Balances on credit cards are falling much faster, with the August levels down more than -15% year-on-year. This is because the proportion incurring interest is now at historic low levels. More here.

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$4 higher than this morning. Silver is up a bit more.

EQUITIES UPDATE
The Shanghai equity market has opened to a modest -0.3% slip. Hong Kong is down -0.7% at its open. Tokyo is up +0.2%. In Australia, the ASX200 is down -0.6% in early afternoon trade and a 10 week low, and the NZX50 Capital Index is down -0.5% near the close. The S&P500 futures trade suggests that Wall Street will open -0.2% lower tomorrow. At least they are looking at a small decline that when we checked earlier today (when it was a full -1% drop expected).

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 down -1 bp at 0.92%. The China Govt ten year bond is also down -1 bp at 3.13%. The New Zealand Govt ten year is down -2 bps at 0.53% and below the earlier RBNZ-recorded fix of 0.54%. And the NZGB five year is even more negative at -0.03% pa now. The US Govt ten year is unchanged at 0.70%.

NZD STABLE
The Kiwi dollar is staying elevated at 67.7 USc. Against the Aussie we are unchanged at 92.6 AUc. Against the euro we are marginally softer at 57.1 euro cents. That means our TWI-5 has taken a slight dip to 70.5 but still in its 2020 range.

BITCOIN HOLDS
Bitcoin is unchanged today at US$10,952.

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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27 Comments

Rather bizarre south island water map . Need to drill a canal through those Alps. Northern North island drying out rapidly, stock prices dropping . Its like the earth has lost its sponge, 2 or 3 days of no rain and the river is down to summer levels .

HB had a good rain end of last week between 15 and 20mm in region, we are still firm underfoot but grass is growing, I should have feed now well into October and more rain is forecast for coming weekend.
Neighbours are all looking good with good covers, it will help that we are all down on numbers. Stock prices are never great this time of year, feed just getting ahead of animals and no income till you start killing, which won't be till mid Oct/Nov
We are all a bit gun shy after last year.

Thats the thing, Ecan Cantetbury consolidated climate model (6 of 40) says in 2090 North Canterbury will be more like Hawkes Bay now, assuming not much done to mitigate anything.

Thats more than our total rainfall for September so far, normally average 80mm for whole sept.
Even Calf rearers are wary, 4 day olds going for $ 60 -80 tops, quickly dropping to $ 30 -10 after the first few pens , or for anything without completely white face/ white socks. the big rearers are obviously not doing a 2nd or tail end batch of calves this season.

As the mean temperature of NZ is rising quite rapidly, this also means a corresponding rise in evapotranspiration. Put simply, rain doesn't go as far as it used to.

it could be but last summer was the first time it felt hotter than normal.

That's saying something, even as a kids it was insanely hot. The HB sun has an extra special kick to it.

Here is TGA detail about testing.
& Australia Govt info about who is at risk.
All good stuff & helpful to be across as we go back to Level 1.
Health level 1, not political level 1.

https://www.tga.gov.au/covid-19-testing-australia-information-health-pro...

https://www1.health.gov.au/internet/main/publishing.nsf/Content/cdna-son...

https://www.health.gov.au/news/health-alerts/novel-coronavirus-2019-ncov...

Who is most at risk
In Australia, the people most at risk of getting the virus are:

- travellers who have recently been overseas
- those who have been in close contact with someone who has been diagnosed with COVID-19
- people in correctional and detention facilities
- people in group residential settings

People who are, or are more likely to be, at higher risk of serious illness if they get the virus are:

- Aboriginal and Torres Strait Islander people 50 years and older with one or more chronic medical conditions
- people 65 years and older with chronic medical conditions
- people 70 years and older
- people with chronic conditions or compromised immune systems
- people in aged care facilities
- people with a disability

At this stage the risk to children and babies, and the role children play in the transmission of COVID-19, is not clear. However, there has so far been a low rate of confirmed COVID-19 cases among children, relative to the broader population. For more information about COVID-19 and children please read this fact sheet.

There is limited evidence at this time regarding the risk in pregnant women.

"the whole issue has exposed the vulnerability of key infrastructure to an unplanned event" - can any country really afford a $6 billion second harbour crossing just to avoid a 1 in 60 year event? Especially when there is another route around the harbour. And if we had a second crossing it would be jammed before the crash (building new roads just builds new demand). So there would still be massive traffic problems regardless.

they as usual had the opportunity to build rail instead of busses when the built the northern busway but like all our governments took a short term cheap view and now we are paying for it , this has happened time and again in NZ since we got rid of the MOW, back in the day things needed to be built for fifty years of growth now they are built for twenty and with our high immigration they are full in ten,
example auckland water storage dams, the last and biggest one built in 1977 and now they can no longer cope with the size of the city, we have had 43 years to do something and have not even planned anything, if the MOW was around there would have been plans already gathering dust

10 years consultation, planning and build. On completion they are basically only just copeing.

NZTA blocked the sky path for 10 years. Just think of cycling and walking was open today. Auckland is going backwards at a fast clip..that's why I left 4 years ago.

Sydney has all sorts of tunnels. Has had for years...

As far as I know they only have two road harbour crossings with a population 4x ours. If one of them was closed the other would no doubt have similar delays.

Aussie population expected to shrink in next 2 years.

In the absence of immigration, Australia's population was expected to fall by 214,000 between a peak in 2019 and a trough in 2021, as a recession devastated the housing market.

https://www.msn.com/en-au/news/australia/australia-s-population-expected...

Really JC, The Daily Mail???? This is where my kids would write LOLZ and LMFAO....

Don't shoot the messenger. Look at the source.

unlikely, i read the other day india is the fastest growing immigrant population, they have billion people wanting a better life, once covid is over and the doors open normal traffic will resum,e and the best part is then us kiwis might not be the ones picked on by the aussies with go home kiwi
https://www.sbs.com.au/language/english/indians-are-now-third-largest-gr...

True, educated unemployment could dip into several millions in the country. Every country should prepare for a larger than ever inflow of migrant from India, especially those perceived easier to migrate (NZ, Canada).

"Credit card spending in August came in -4% lower than the same month a year ago." Considering the rapid decline in using physical cash for transactions, I always wondered if the rosy reports of "Credit card spending increases" were actually sprinkled with fairy dust? So what does a card decline of 4% translate to in the real world?

An interesting graph plotting GDP fall/COVID 19 deaths/population size for OECD countries.

https://www.macrobusiness.com.au/2020/09/can-we-like-stop-praising-swede...

Why House Price...

https://www-newsroom-co-nz.cdn.ampproject.org/v/s/www.newsroom.co.nz/as-...

May be the reason is TAX FREE - where in the world does can make million and pay no tax.

I hypothesized the other day that a CGT might have more impact when yields are so low....only a theory....

I joined up to Radio NZ on Facebook, I expected a reasonably informed comments forum but it's no better than Stuff! Comments here are very sophisticated by comparison!

Newsroom on facebook isn't too bad.

They used to have comments on their website, but knocked them on the head because it was getting too lowbrow. I wonder if the people commenting and the people listening to their programs are two quite different groups?

I see UK banks in general, and HSBC in particular, are taking a kicking because of this leak outlining their inability to meet anti-money laundering laws. They will only learn when we suspend or revoke their banking licenses folks, the soft touch approach to bank regulation has failed.

BBC front page story currently: https://www.bbc.com/news/uk-54225572