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A review of things you need to know before you go home on Tuesday; no retail rate changes, auction activity jumps, ANZ sees much lower mortgage rates, eyes on SFO, swap and bond rates stable, NZD holds, & more

A review of things you need to know before you go home on Tuesday; no retail rate changes, auction activity jumps, ANZ sees much lower mortgage rates, eyes on SFO, swap and bond rates stable, NZD holds, & more
ID 22702269 © Daniaphoto | Dreamstime.com

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

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
No changes here either.

AUCTIONEERS MAKING UP FOR LOST TIME
Last week, there was a huge jump in the number of properties auctioned by Barfoot & Thompson, with the sales rate holding steady at two thirds.

A NEW DROP IS COMING
Meanwhile, ANZ is saying fixed interest rates for mortgages could fall to 1.75% early next year. Given that bank average two year rates are 2.70% at present, that represents nearly a -100 bps fall that is being forecast by the ANZ economists.

NATIONAL EYES BEEFED UP SFO
The National Party wants to almost double the Serious Fraud Office's annual budget to $25 million and change its name to the Serious Fraud and Anti-corruption Agency. Leader Judith Collins says National wants to give the SFO the resources it needs to deliver on its role as the lead law enforcement agency for investigating and prosecuting serious financial crime, including bribery and corruption.

INVESTIGATION UPDATE
And, the Serious Fraud Office says it will issue a statement in relation to the NZ First Foundation investigation at 5pm today. We will update this when it is released. Update: The SFO says they have filed a charge of ‘Obtaining by Deception’ against two defendants in the New Zealand First Foundation electoral funding case. The charges were filed on 23 September. They say "the defendants have interim name suppression and so cannot be named or identified at this time. We note, however, that neither defendant is a Minister, sitting MP, or candidate in the upcoming election (or a member of their staff), or a current member of the New Zealand First party."

JUMPED OR PUSHED?
The chief information officer of the NZX has resigned. This follows some very high-profile IT problems at the exchange operator in recent weeks. Being tripped up by the daylight savings time transition (!) was just the latest.

RATING UNCHANGED DESPITE PRESSURES
S&P Ratings has kept Auckland Council's credit rating unchanged at AA Stable. They say they see large after-capital account deficits and rising debt levels over the next few years as the council addresses infrastructure needs to "support its rapidly growing population". But they still expect "the city's strong economic and liquidity profile, the council's experienced management, and New Zealand's excellent institutional settings to help Auckland counter these challenges and underpin its rating".

DROUGHT BEHIND US NOW?
After being in a long dry period associated with an El Niño weather pattern, Australia has moved into the opposite La Niña weather pattern where they can expect wetter conditions especially along the eastern seaboard. In New Zealand, La Niña often brings rainy conditions to northeastern areas of the North Island and reduced rainfall to the lower and western South Island. Warmer than average air and sea temperatures can occur around New Zealand during this weather pattern. It is a pattern that can last one or two years.

GOLD PRICE HIGHER
The gold price is trading at US$1886/oz today in Asian markets and up +US$27 from this time yesterday. It is also higher than the US$1881 at New York close and much higher than London's US$1864 close last night. Silver is not showing the same gains.

EQUITIES UPDATE
On Wall Street, the S&P500 ended their session up +1.6%. But the NZX50 Capital Index is heading for a small retreat today, currently down -0.1%. The ASX200 is however up another +0.7% in afternoon trade, similar to yesterday's gain. Shanghai has opened up +0.4%, Hong Kong has opened up +0.3%, and Tokyo is down -0.5% in their mid-morning trade after yesterday's rise.

SWAP & BOND RATES STABLE
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 up +1 bp at 0.31%. The Australian Govt ten year benchmark rate is unchanged at 0.84%. The China Govt ten year bond is also unchanged at 3.15%. The New Zealand Govt ten year is up +1 bp at 0.46% and marginally above the earlier RBNZ-recorded fix of 0.45%. And the NZGB five year is still negative but less so at -0.03% pa. The US Govt ten year is unchanged from this morning at 0.66%.

NZD HOLDS
The Kiwi dollar is holding firm at 65.6 USc. Against the Aussie we are a little softer for a second day at 92.7 AUc. Against the euro we are at little-changed at 56.2 euro cents. That all means our TWI-5 is at unchanged 69.2

BITCOIN SOFT
Bitcoin is -1.9% lower today than this time yesterday, now at US$10,700.

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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23 Comments

Biggest IPO in history in our sights (USD35 bio). And from China.

Ant Group has launched a cross-border trading blockchain platform as it prepares for what could be the largest stock market flotation of all time. Ant said Friday that its new trade platform, called "Trusple," will make it easier for small and medium-sized enterprises (SMEs) to sell their wares to clients overseas. Built on AntChain, Trusple automates key aspects of the payments process, such as order placement and tax liabilities.

https://www.coindesk.com/ant-business-trade-blockchain

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I noticed Muddy Waters ( the short-sellers not the musician) was discussing ANT this morning. I guess they'll be running their programmes over this IPO.

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Wonder who came up with that shocking name "Trusple".

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Bill Barr.
The Consitution & Rule of Law.

Wide ranging comments.
On investigations, elections, media pandemics and bagpipes.

https://youtu.be/IOHo5_DiRdc

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I hope National gets their way and does the cosmetic name change for SFO. It would probably end up as the SFA.

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Would be the only way of dodging a few own-goals, one would have thought.

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The National Party wants to almost double the Serious Fraud Office's annual budget to $25 million
The chief information officer of the NZX has resigned

Too bad there isn't an agency in-charge of investigating and prosecuting management for ineptitude, it would create plenty of high-paying jobs from all the mass sackings across private and public sector boards, C-suite and management roles.

What an epic failure as a country when business leaders making top dollar struggle to keep the lights on (or in this case, systems on after daylight savings).

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25 million is chump change. Pay peanuts, get monkeys. We spend a billion on gender reassignment psychological examinations for confused pet goats every year in the land of the long handout.

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How can this be,

Security is good.
https://www.rnz.co.nz/news/national/427156/man-escaping-managed-isolati…

And yet coming home after a night out.
https://i.stuff.co.nz/national/health/coronavirus/122923852/man-who-esc…

More sounds like the guy was late back.....
Security staff discovered the sheets at the Ramada Hotel in Federal St yesterday morning at 8.20am and the man appeared at the front gate at 8.24am.

Given that...
He has had two negative tests after returning from Australia on a deportation flight on 16 September.

CCTV footage reviewed as part of the investigation found the man walking around Aotea Square around 1am.
“The man has been viewed on CCTV walking in parts of Auckland, from the central city to Newmarket, Epsom, Onehunga and Mt Albert before returning to the facility on Federal Street.”

Security is fine
This isn't something we anticipated, someone scaling down four stories of a building using tied-together sheets, but as always we are reviewing the situation and any changes that need to be made to make sure this doesn't happen in the future will be made."
Keystone in fact.
Is this more like NSW or VIC?

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the guy sounds a few spanners short in the toolbox, he only had two days to go.
maybe he has spent too much time inside so escaping is normal thought, now he will get another stay this time not in a hotel.
i would have thought they would have had perimeter guards for this hotel being full of returned people deported due to convictions.
its only about 150 metres from auckland central police station so makes one wonder if rather than have more than one policeman on ground like the normal isolation hotels the police in their wisdom(LOL) decided it was close enough to respond if trouble occurred.
to me these guys should not be put up in a hotel we have old prisons we could use for them
https://www.stuff.co.nz/national/health/coronavirus/122553915/abandoned…

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The military runs these places. Imagine if Fiji invaded. We'd be saying Bula by lunch time.

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This just over from California - a drive past and some visits into tent and camper van cities of the unemployed:
https://www.youtube.com/watch?v=aaX1tIvDfGk
I don't know what it looks like - post-apocalyptic maybe? Parts of it are a bit Borat.
Driven into the scrub by rent.

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Sky news take on current polls.

https://youtu.be/Fkv4eUKwpKo
If dear leader so loved why unable to govern in own right.
Even David Cameron got to do that.

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my main take-home from that vid: Tax is Love

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Er, the UK uses FPTP, so apples and oranges right? Mr Camerons party got 37% of the vote, but >50% of the seats

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I appreciate the electoral mechanics however PM & her dept have had 3 years to position themselves a top the majority of the electorate.
Given the "comms" of the PM, the recognized "fans" she has, it seems a great wasted opportunity.

She herself recognized the problem, her most effective minister is not in the government at all. Remember the green school money, unforgivable by Shaw, but PM doubles down saying what a good job he does.
Remember PM key international/UN plinth is CChange, & Shaw writes her speeches!

https://www.google.com/amp/s/amp.theguardian.com/world/2019/nov/08/we-a…

Other than that she has nothing.
https://www.theguardian.com/world/2019/dec/31/new-zealands-year-of-styl…

The PM has had the opportunity to bring in any talent into parliament via election list, or direct invite, again wasted opportunity, such a waste (she could have got Shaw to jump across to Labour).

The big wigs in Labour must be beside themselves over the wasted opportunity.

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Get over it Henry Tull. Constant trolling of JA is not going to change the election. Looking at the good and bad points of all leaders might change your way of thinking however.

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You forget I was very critical of Key in his last election.

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For 2 weeks the NZX claimed DDoS Denail of Service pointing to external overseas cyber attacks. Even called in the GCSB. From the scarce explanations available publicly it did not have the hallmarks of an off-shore cyber attack
On 28 August 2020 I said so - here on interest.co.nz
https://www.interest.co.nz/news/106770/us-fed-shifts-policy-emphasis-us…
We await a public apology

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The chief information officer of the NZX has resigned. This follows some very high-profile IT problems at the exchange operator in recent weeks. Being tripped up by the daylight savings time transition (!) was just the latest.

Can one safely proclaim the efficiency of private enterprise is at best misrepresentation?

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Not without extrapolating from a sample size of 1.......

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ANZ calling 1 year mortgage rates of 1.75% by April.

This being the case we have to assume OCR at -25bps and one year swaps similarly at around -25bps or so.

If RBNZs policy of parallel yield curve movements from QE (LSAP) continues, this implies the 29s trading at zero and the 33s at 10bps yield by April.

It also implies Auckland Council could have borrowed a LOT cheaper if they had waited 6 months for their very long bond issue.

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I doubt Donald Trump sits down at his kitchen table and diligently completes his own tax returns but FWIW:

Down in paragraph 78 the New York Times reports: "Mr. Trump was periodically required to pay a parallel income tax called the Alternative Minimum Tax, created as a tripwire to prevent wealthy people from using huge deductions, including business losses, to entirely wipe out their tax liabilities. Mr. Trump paid alternative minimum tax in seven years between 2000 and 2017 — a total of $24.3 million, excluding refunds he received after filing.”
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