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
Kiwibank cut its 32 day NoticeSaver rate to 0.65%, a -10 bps drop.
HIGH COMMODITY PRICES HOLD
The ANZ World Commodity Price Index eased just -0.2% in September as lower dairy and meat prices were largely offset by stronger prices for logs and fruit. But in local currency terms the index fell -1.3% as the NZD strengthened.
IT DIDN'T WORK OUT I
Fonterra has sold out of its China farms business for $555 mln. They say sale of the China Farm interests will allow them to 'prioritise the areas of its business where it has competitive advantages'. Even at that price, the China Farms strategy has been a large financial negative. Much of that negative however has already been written off in prior results.
IT DIDN'T WORK OUT II
A car parts supplier has allegedly been misrepresenting car parts as genuine to New Zealand repairers. This has insurers reassessing the quality of repairs they have paid for. Clients may be called to arrange remedial work if the actual parts did not meet OEM standards.
HOPING IT WILL WORK OUT
More than 250,000 New Zealanders are using Sharesies, Hatch and InvestNow to invest in publicly traded shares, with three-quarters of users aged 25-44. The rush to do so is raising concerns that many of these beginner investors are jumping in without a good understanding of what is involved.
BEGINNER RESOURCES FOR UNDERSTANING NZX50 SHARES
We have launched a new resource profiling the companies on the NZX50 - what they do, who leads them, and their financial history. We have released profiles for FPH, MEL, ATM, MFT, EBO, FBU and GNE. A new one will follow each week.
UNINTENDED CONSEQUENCE
Federated Farmers is blaming rushed new Government policies on the recent rash of high country fires that have happened recently following the policy change to destock leased Crown land. They say there is no science to support destocking and that sheep grazing would have effectively controlled these risks. "Now people have lost their homes because of mismanagement by DOC," the farmers' lobby group claims.
A NEW HURT LOCKER
We have just reached the six month anniversary of the serious onset of COVID-19 economic impacts and start of the public support programs. Many of these are expiring now around the world, and only some are being renewed. The economic fallout from this next transition is likely to be outsized. And many new people are in for significant stress.
DID YOU KNOW ...
New Caledonia rejected independence for a second time in a referendum in voting yesterday. But this time it was much closer.
GOLD PRICE UNCHANGED
The price of gold is now at US$1900 in early Asian trading, and little-changed from Friday's closing price..
EQUITIES UPDATE
The NZX50 Capital Index has had a flat day, although that means it gave up some small earlier gains. The ASX200 in early afternoon trade is up a very strong +2.3% on expectations their Budget tomorrow will be very friendly to their economy. Shanghai and Hong Kong are still closed. Tokyo has opened up +1.4%. The futures market indicates the S&P500 will open up +0.8% which is a large turnaround from a -1% indication a few hours ago.
SWAP & BOND RATES SLIP
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 down -2 bps today to 0.27%. In a record that goes back to 1985, the lowest ever was on June 10 this year at 0.25%. The Australian Govt ten year benchmark rate is up +3 bps at 0.89%. The China Govt ten year bond is unchanged at 3.16%. Meanwhile, the New Zealand Govt ten year is up +1 bp at 0.52% and above the earlier RBNZ-recorded fix of 0.50% . And the NZGB five year is not negative anymore and is now at +0.02% pa. The US Govt ten year is up +1 bp from this morning to 0.71%.
NZD HOLDS
The Kiwi dollar is marginally firmer this afternoon compared to this morning, now at 66.5 USc. Against the Aussie we are unchanged at 92.5 AUc. Against the euro we are also little-changed at 56.7 euro cents. That all means our TWI-5 is up very marginally at 69.8.
BITCOIN FIRM
Bitcoin is a little higher in today's trade, now at US$10,716 and up a lit less than +1% from this morning's open. The bitcoin rate is charted in the exchange rate set below.
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
21 Comments
kiwibank also dropped its 90 day notice saver by 40bps!!
No incentive to put money aside and save at these rates... where will it all end?
Studying Overstock dot com over the weekend. Internet retailer in the U.S. that sells home decor, furniture, bedding, and many other goods that are closeout merchandise as well as new merchandise. Their stock price is up 900% in 2020.
Besides being the first online retailer where the shopper is able to use bitcoin, Overstock has a subsidiary that has created the first tokenized digital securities. These securities means that a mom & pop investor can own securities of listed ventures (including Overstock). Very exciting stuff and a glimpse into the future.
https://www.jdsupra.com/legalnews/overstock-rockets-to-new-all-time-hig…
I know zero about overstock in its current form. But I do wonder if being up 900% this year is actually a good sign...
I know zero about overstock in its current form. But I do wonder if being up 900% this year is actually a good sign...
Been plenty of bets on the short side and short sellers are taking Overstock to court. Plaintiffs accused Overstock of fraudulently pumping its stock with misleading financial projections and by promising to issue a digital dividend to shareholders via its tZERO subsidiary, an alternative trading system for digital securities.
https://www.coindesk.com/overstock-short-sellers-fall-short-as-judge-gi…
i wasn't being critical of Fonterra , I was genuinely wondering how far they will go.
Be careful. Overstock rocketed up in 2017 based on crypto enthusiasm then it later plummeted from $82 down to $2.50. The same thing could happen again.
Well yes. Overstock owns tZero. Regardless, its stock price is already back to the 'crypto bubble high.' Big difference is that revenues are soaring for the ecommerce business (doubled in past 12 months).
I wonder if Fonterra will sell it's investments in Brazil and Chile or if they can even sell Beingmate?
share price hovering on 4 bucks, I guess thats a lot better than the ATM and synlait performances of late.
Over the ditch, no inflation is now becoming a worry. Today's inflation gauge shows the trimmed mean measure collapsing, meaning a potential downside risk to the RBA forecast of 1.0%yoy to Q4. This means the Bank will need to take some near term action.
To do what the Japanese could never achieve?
Like what?
The market is going to call central banks bluff, bonds are signaling decades of no growth and all central banks have is a busted flush
Housing Market Update
The agents are not telling us if a house sells for below CV. They only publish high priced sales above CV. This should be criminal. They are trying everything to trap FHB's. Do not be fooled! The truth is told in Australia. The MSM still has some morals over there.
https://www.smh.com.au/national/why-sydney-s-property-market-could-be-i…
Any market where the advocates are paid on a commission basis is always subject to manipulation.
If House X on Y Street sells for $1 million, the agent gets, let's say, $20,000 for the effort they put in.
If that same house sells next week for $2 million, they get $40,000 and if it sells for $500k they get $10,000.
What do we think they will tell us the price will be next week?! Up or down.....
Those running Managed Funds ( eg: Kiwisaver) businesses are little different.
Yes Ive seen this, they leave 'TBC' against sale price and never update it. However, I do think the Auckland market has just jumped about 5 to 10% on many properties. I personally know someone who just paid about 80k more for a 2 bed unit than it was last year.
FHB in Auckland will be extinct breed as come what may government will not allow it to fall as any softness will be doom for NZ economy.
Many expects some softness, once various stimulus ends but have doubts as Government may extend or bring some other incentive to boost the ponzi which has to be maintained.
"Hoping it will work out" - I joined Hatch as a reasonably seasoned investor about a year ago. Man, you should see the facebook groups of these "investor" sites. So many "I have 10k, what should I buy?" posts... or "SHOULD I SELL?" when the market drops.
Basically a whole bunch of completely inexperienced investors jumping on each others band wagon. Which explains the crazy prices of some companies. Robin Hood effect is in full flight, a lot of young people I suspect are going to lose their shirts, just by not understanding the basics.
Just like housing market Fed will not allow the stock market to crash as it isthe stock market that is keeping the positive economy alive otherwise will be all doom so fed has to keep the stock market up to avoid disaster.
As long as reserve bank are in printing spree, asset class will not fall and it seems liquidity is been flooded in stock and house market for the same and now reserve bank has no option of backing out as are forced by their own doing. Debt will support now and debt will also be the reason for the disaster so is screwed if they do and also if they don't but as world over are opting for debt, will follow - herd mentality.
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.