A review of things you need to know before you go home on Tuesday; mortgage-cash back is back, FMA warns on derivatives, RBA readies more ammo, NZGB yields lower, NZD lower, & more

A review of things you need to know before you go home on Tuesday; mortgage-cash back is back, FMA warns on derivatives, RBA readies more ammo, NZGB yields lower, NZD lower, & 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. But cash incentives are back. TSB is offering up to $4000 depending on the loan size (and financials) until October 11. ASB is now offering $2000 for loans of $250,000 and larger. (Westpac has its $10,000 interest-free 'warm up' loan too.)

TERM DEPOSIT RATE CHANGES
None to report today. We are in the shadow of the RBNZ OCR review tomorrow and the related MPS.

RESTRICTED
The Financial Markets Authority has imposed conditions on the derivatives issuer license of Hong Kong-owned CLSA Premium New Zealand (formerly KVB Kunlun) that prevent the firm from making an offer to, or receiving further funds from, retail investors in relation to derivatives, (except in certain limited circumstances to close out open positions for clients).

MORE AMMO NEEDED
In Australia, their central bank says they may buy even more government debt to lower interest rates as the Aussie economy faces an uneven recovery. They are targeting their three year rate, holding it 0.25% by aggressive bond issuance and started with an AUS$84 bln warchest. But today they announced it is likely to be expanded to $140 bln or 5% of the AU$2.7 tln debt market.

GOLD PRICE SOFT
The gold price is soft in Asian markets. Last night it closed sharply lower in London at just US$1909/oz and down -US$36 on the day. It rose marginally in New York to close there at US$1912. But in open trading on Asian markets it is now at US$1910 and showing more minor softness.

EQUITIES UPDATE
After a small, late session rally the S&P500 ended down -1.2% in New York. (At one point it was down -2.6% mirroring European markets.) At their opening, Shanghai is down -0.6%, the same as in Hong Kong. Tokyo is closed for a holiday today. The ASX200 is down -0.6% and falling in early afternoon trade. The NZX50 Capital Index is up +0.5% in late trade.

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 0.91%. The China Govt ten year bond is unchanged at 3.13%. The New Zealand Govt ten year is down -2 bps at 0.51% and below the earlier RBNZ-recorded fix of 0.53%. And the NZGB five year is even more negative at -0.05% pa now. The US Govt ten year is down -3 bps at 0.67%.

NZD LOWER
After falling hard last night, the Kiwi dollar is firming slightly today but is still down -1c at 66.7 USc. Against the Aussie we are little-changed at 92.5 AUc. Against the euro we are -½c softer at 56.7 euro cents. That means our TWI-5 has fallen to 69.9.

BITCOIN DOWN
Bitcoin is lower today and down -4.6% from this time yesterday at US$10,453.

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

Things seem to be getting pretty dicey in Aus economically.

And disturbingly, Australia is probably one of the better performing economies. What does that tell us about ours and The Rest?

And disturbingly, Australia is probably one of the better performing economies.

According to who? The Aussie media? Scomo? Quite frankly, the Aussie economy is exposed as any. Iron ore exports are not the economy.

14
up

Neither are houses to be fair.

Neither are houses to be fair.

Yes they are. Houses have more to do with consumer spending than iron ore.

Perhaps, but they are not the economy.

AU Economy = Houses and Holes
NZ Economy = Houses and Cows

"According to who?"
I think you've completely missed my point!
Australia ISN'T doing well, so where does that leave us and everyone else. (It's one of the least dirty shirts in the washing basket etc)
We all just happen to be WORSE than their 'better'.

Finally something about CT

Director-General of Health Dr Ashley Bloomfield said on Tuesday the “cycle threshold” (CT) value of the person’s polymerase chain reaction (PCR) test was high, which suggested an old infection.

https://i.stuff.co.nz/national/health/coronavirus/122850846/covid19-asym...

However the actual numbers need be disclosed, was it 25, 35, 45. Who knows?
That CT range is being used to deem a positive?

Light at the end of the COVID tunnel; expert commentary from Prof Mark Thomas
https://www.rnzcgp.org.nz/GPPulse/GPPulse/Opinion/An_update_on_potential...

Great link. Thanks.

Bank Santander share price back to 92 levels. Boom and bust on a property bubble. Putting on my DGM hat, what about the Aussie banks that comprise a large chunk of the ASX that the average joe have been encouraged to buy for super with high dividend payouts and franking credits?

ANZ share price on a downward track again.

"We are in the shadow of the RBNZ OCR"
Not picking any change - economy seems to be going better than expected and housing market running too hot.
Very little powder left and no reason at all to use any of it currently.

Not picking any change - economy seems to be going better than expected and housing market running too hot.
Very little powder left and no reason at all to use any of it currently.

Is that water cooler consensus or have you wet your own finger and held it above your head?

J.C.
Water cooler consensus?
I am capable of reading recent reports from Stats.NZ, Treasury, RBNZ and REINZ, bank economists etc.
However, much as you seem to be surprised and hate it, the economy and housing are strong as quarterly GDP figure has been better than expected and that REINZ monthly data has shown prices up.
Pretty simple really and happy to help you out.
Cheers

Meh. To suggest you don't expect a cut in the OCR is neither here nor there.

Check out the data though, for some reason during the first 11 weeks or so of 2020 the number of deaths compared to the previous years was significantly below the average of the previous years. Perhaps they were lowering the total number of deaths somehow significantly this year. This skews the graph presented. Looking at the data there is a clear spike around when the COVID outbreak happens. It's pretty clear until you look at the full graphs.

4% increase over the 5year average. Not insignificant surely.

"The New Zealand Govt ten year is down -2 bps at 0.51% and below the earlier RBNZ-recorded fix of 0.53%. And the NZGB five year is even more negative at -0.05% pa now. The US Govt ten year is down -3 bps at 0.67%."

This morning the Apr 23s and Apr 25s were offered at -10bps and -9bps respectively.

At today's LSAP window RBNZ purchased the 23s at an average weighted yield at -0.077%.

Ardern and Collins on tv, full of empty garbage, both of them

John nailed it. Both spouting their respective parties bull.

Yep phoney garbage

I wish we had John back at the 7.00 news current affairs time slot, rather than that crap they dumb the nation down with at present.

Judith, do know what. Not interested.

Talofa, fellow Samowens!