A review of things you need to know before you go home on Friday; eyes on more TD cuts, truckometer signals promising; offshore signals glum, swaps soft, NZD firms, & more

A review of things you need to know before you go home on Friday; eyes on more TD cuts, truckometer signals promising; offshore signals glum, swaps soft, NZD firms, & 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
None here either. But we suspect a main bank will take term deposit rates to new lows next week, possible more than one of them. Update: Westpac has reduced its TD offering, but only to levels already in place from their main rivals.

ENCOURAGING RECOVERY
ANZ's truckometer index was out today for September, reporting a good bounceback in activity. The Light Traffic Index (essentially car traffic) bounced back +12.3% in September, while the Heavy Traffic one (trucks) lifted +4.1% as the Alert Level restrictions eased. Both indexes are higher versus a year ago, reflecting, says ANZ, "catch-up activity rather than an economy running hot. But still, it’s encouraging".PDF iconANZ-Truckometer-20201009.pdf

SEPTEMBER DATA DUE
REINZ announced that their September sales volume and price data will be released next Tuesday, October 13, 2020.

HANGING IN THERE
In Auckland, households have been conserving water much better than target and despite there being little rain recently, reservoir levels haven't reduced much and are still 67% full. La Niña conditions may be enough for the City to get through the summer. That's the hope, anyway.

ONE SECTOR STILL STRONG
Commitment for home loans in Australia rose sharply in August according to data released today. They were up almost +13% on a seasonally adjusted basis from July and are now more than +14% higher than the same month in 2019. Over the past twelve months, these commitments are up almost +10% compared to the equivalent twelve months to August 2019. These results are much more than was expected and the impact of the Victorian lockdown is nowhere to be seen. However personal lending in August (other than for housing) is down -12% compared to August 2019.

GLUM ASSESSMENT
The RBA's latest financial stability review is somber reading. Business failures and household financial stress will rise significantly over the coming months when loan repayment deferrals and government income supports end, they say.

WORST EVER
In the US, their budget deficit tripled in the fiscal year ended September. It widened to -US$3.1 tln from just under -US$1 tln a year earlier. Four years ago this Administration inherited an annual deficit of -$585 bln. This is the largest and fastest deterioration ever. As a share of GDP, the annual 2020deficit reached -15.2%, the largest since World War II.

GOLD PRICE LUP
The price of gold is now at US$1898/oz in early Asian trading, and up another +US$13 from yesterday's equivalent price. That is +US$4 more than the closing price in New York earlier, and +$US11 more than the London afternoon fix.

EQUITIES UPDATE
On Wall Street, the S&P500 ended trading earlier up +0.8%. The four days of trading so far this week, they have posted a +2.9% rise. Shanghai has reopened after their week's-long break and is up +1.4% in early trade. Hong Kong is +0.2%, and Tokyo is flat so far in their opening session but they are heading for a +2.8% gain for the week. The ASX200 is down -0.2% in mid-day trade but is heading for a very good weekly rise of +5.2%. The NZX50 Capital Index is up +0.2% near the close and heading for a +3.7% weekly gain.

SWAP & BOND RATES RISE
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 today to 0.28%. The Australian Govt ten year benchmark rate is down -2 bps at 0.86%. The China Govt ten year bond is up +5 bps at 3.21% as their markets get back into gear. Meanwhile, the New Zealand Govt ten year is down -1 bp at 0.54% and matching the earlier RBNZ-recorded fix of 0.54% (-2 bps). And the NZGB five year is down -6 bps and is now back at +0.01% pa. The US Govt ten year is down -1 bp from this time yesterday to just over 0.78%.

NZD BACK UP
The Kiwi dollar is up almost +½% from this time yesterday at 66 USc and making back most of yesterday's fall. Against the Aussie we are little-changed at 92 AUc. Against the euro we are firmer at 56.1 euro cents. That all means our TWI-5 is up at 69.2.

BITCOIN UP
Bitcoin is much stronger in today's trade, now at US$10,881 and a gain of +2.4%. 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 ».

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End of day UTC
Source: CoinDesk

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27 Comments

Such a strong correlation to gold price vs NZ dollar now... any suggestions why that is?

Really? There has long been a correlation between JPY and the gold price. And the correlation between JPY and NZD is usually an inverse relationship during risk off periods.

https://seekingalpha.com/article/4067139-curious-case-of-gold-and-yen

Square's purchase of $50 mio of Bitcoin is another corporate move to diversify away from fiat currency. Jack Dorsey has long been a believer and it will be interesting to see if this becomes a trend among corproates.

https://www.businessinsider.com/bitcoin-price-square-buys-million-ubiqui...

Been a fascinating day.

From last night, the US VP debate.
C Span
https://youtu.be/t_G0ia3JOVs
Pence ran through the Trump administration record without the Trumpisms.
Harris put on a pitch perfect copy of our current PM. Acted just like Hilary, just like Jacinda.
- reaction to last night's indicates Pence comprehensively cleaned up, & Harris showed why she had earlier dropped out of the nomination race.

The reaction was the same as here.
Some love her to bits.
Some see a dud record, all hat no cattle.

An explanation has been offered this afternoon.
Dave Rubin and Dr Gad Saad
https://youtu.be/qN9I9K2uyZA
Q&A The parasitic mind.
https://www.amazon.com/Parasitic-Mind-Infectious-Killing-Common/dp/16215...

The thesis being the lovers & PM are operating in the Affected mind,
https://en.m.wikipedia.org/wiki/Affect_(psychology)
The critical minded, more on evidence based, more basis the scientific method.

There's a war against truth... and if we don't win it, intellectual freedom will be a casualty.

The West’s commitment to freedom, reason, and true liberalism has never been more seriously threatened than it is today by the stifling forces of political correctness.

Dr. Gad Saad, the host of the enormously popular YouTube show THE SAAD TRUTH, exposes the bad ideas—what he calls “idea pathogens”—that are killing common sense and rational debate. Incubated in our universities and spread through the tyranny of political correctness, these ideas are endangering our most basic freedoms—including freedom of thought and speech.

The danger is grave, but as Dr. Saad shows, politically correct dogma is riddled with logical fallacies. We have powerful weapons to fight back with—if we have the courage to use them.

i will miss trump when he gone, now china is invading with a virus
In videos posted to Twitter on Wednesday and Thursday, Trump said China is responsible for the coronavirus pandemic, claiming the virus “was sent over by China” and promising the country will pay an unspecified price.

Wow Henry, that's a pretty sad small dark room you're living in. All bile and spittle. You draw a long bow when you link the freedoms of the west and 'rational debate' to the self-promoting narcissists that have taken over the right. Politically correct dogma is a pain I agree, but just because it annoys you, don't become an acolyte of those who are setting reasoned debate back 100 years.

Rhumline, nothing to do with my bow.
You completely missed the point.

Try again, consider the Afected minded compared to critical minded.
Watch the Q&A.

We are 'trucking-on' as the economy runs through the gears picking up speed as it goes. Will be a relief for many when Dec 25 arrives. Please also spare a thought (or some spare change) for those who are struggling

Keystone stuff up there
Fortunately nothing to do with anyone in Wellington or Webb.

That was because of a “local decision”, he said.

Police spoke to the woman who revealed she had escaped the night before. She had left the hotel, in Auckland’s CBD, about 1.07am and returned about 3.09am.

Webb said the woman was able to escape because security guards who were normally stationed near the fire exit were elsewhere on October 7.

https://i.stuff.co.nz/national/300126831/woman-escaped-auckland-managed-...

I think it was the rubbish bin, with the bedsheet rope in the Lift at the Coolstore.

they need to make some examples of these people, when they do this transfer them straight to a prison cell for another 14 days, we dont need some jerk ruining our level one, and for every 100 people there are always one or two that think their s--t dont stink.
and if she is not a resident or a citizen depot her straight away

It’s not really that unexpected. There are plenty of people with mental health issues, addiction issues, attitude problems, etc. There are always going to a percentage of people that just can’t handle 2 weeks of isolation or without their addiction. I doubt making examples will change anything. I guess it might make us feel better.

The US Govt ten year is down -1 bp from this time yesterday to just over 0.78%.

We previously showed that when it comes to Wall Street bets on what the Treasury yield curve does next, there has never been greater confidence in even more steepening: as the below chart of leveraged and speculator net positions in 30Y futures shows, traders have never been more short, with the latest CFTC data showing combined net shorts in long bonds both at records with a combined net short of over 620,000 contracts.Link

Short squeeze on the way?

How to buy a legacy
Trump's legacy is a USD $3.1 trillion deficit
He reduced taxes on US multi-nationals to 15% on their off-shore earnings
The multi-nationals used that to do massive share buy-backs
A share buy-back does not increase the value of the underlying company
But it increases the value of the reduced number of shares over the same business
Trump's claim to fame is he has increased the value of the NYSE 50%
What he doesn't say is it has cost the Treasury USD $3 trillion this year
And that's recurring
It will be another USD $3 trillion next year, and again the year after, repetitively

$3 trillion next year if Trump wins, much more if Biden wins. That's how socialist roll, they give away money while not haveing much of a clue of how to run the show.

12
up

https://www.politifact.com/factchecks/2019/jul/29/tweets/republican-pres... “Reagan took the deficit from $70 billion to $175 billion. Bush 41 took it to $300 billion. Clinton got it to zero. Bush 43 took it from zero to $1.2 trillion. Obama halved it to $600 billion. Trump’s got it back to a trillion." (And now 3 trillion)

Locally the Clark Cullen government paid down truckloads of debt (they got criticised by National for running too much surplus!).

Thanks Jimbo. I don't consider myself a leftie but people like Kezza and Co. who are too lazy to acknowledge the contributions of good centre-based Government are beginning to dominate this site. The louder they shout, the less likely it is to be fact-based.

Centre based Gov't is pushing people to the fringes. How many people that actually work are in Labour these days? Perhaps it's time for a name change.

Pleanty working but still getting handouts whole they work. No wonder they vote for Labour.

No hand outs for you then Kezza..last we heard you were sitting on your bum most days?

Any chance you could retype this so we can actually understand what you said? Nah forget it, it’s all the same drivel.

Same applies to National... and New Zealand First... and Act. I'm a proud New Zealander who believes in the national interest, pays my rates and my taxes - and yes I work in front of a computer (part time, I'm old) and get paid for my labours. I personally think the dishonesty (and lack of common sense) at the extremes is pushing people like me firmly back to the centre.

Labour and the Greens will take new debt to the extreme while not delivering. We are in for the biggest comedy show ever.

You secretly love Jacinda though :)

The queen of non delivery / mismanagement with a smile.

So which party should we be voting for Kezza?

Can you have too much of a good thing?

https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018767732/em...

Motels and accommodation providers receiving millions of dollars in emergency housing payments from the government have also claimed tens of thousands of dollars in wage subsidies.

Is this:
1. Crony capitalism, or
2. More a trotter trough business model.

Be nice to see all the contributions.

I don't see any WP TD drop on their website.