What happened Tuesday

A review of things you need to know before you go home on Tuesday; no retail rate changes, more farms sold, many more lifestyle block sell, eyes on dairy auction, swaps stable, NZD sinks, & more

20th Oct 20, 3:59pm by David Chaston

ID 22702269 © Daniaphoto | Dreamstime.com

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

MORTGAGE RATE CHANGES
No changes here today.

TERM DEPOSIT RATE CHANGES
No changes here either.

A LIFT IN ACTIVITY
The latest NZIER Quarterly Survey of Business Opinion shows a rise in confidence ahead of election - and firms were much more upbeat about hiring staff. Also see this.

MORE SALES, BUT MORE SPECIALISED
There were 123 farms sold in September, a month when few dairy units change hands. There were far fewer grazing units sold this year than last, but many more finishing units. There was also a big jump in forestry units changing hands in September. Overall, 35% more properties chnaged hands last month than the same month in 2019. And overall prices/ha were about +5% higher. More here.

LIFESTYLE IN HOT DEMAND
There was a rush to buy lifestyle blocks in September with 959 sold in the month, up sharply from just 514 sold in September 2019. It adds to the high 942 sold in August. Prices were almost +9% higher but this makes no accounting for various block sizes.

AUCTION EXPECTATIONS
There is another dairy auction tomorrow, one that comes after two consecutive gains (of +3.6% and +2.2%). Futures pricing suggests WMP is expected to rise again, by +2.5%, whereas SMP prices are expected to fall again by -1.0%.

BIG THREAT
International ratings agency Moody's says central bank digital currencies could displace commercial banks from their current role in the payments system, disrupt their business models, and force changes to their funding model.

AUSSIE PAYROLLS SHRINKING
Between the week ending 14 March and the week ending 3 October 2020 Australian payroll jobs decreased by -4.1% and wages fell by -3.3%. That means -440,000 jobs were lost over that period. Over the two weeks to October 3, the number of jobs fell almost -1% and wages paid fell -2.2%, reversing improvements on the previous fortnight.

RBA VIEWS HIT AUD
Last weeks revelation that the RBA would set its monetary policy based on their actual inflation, rather than inflation expectations was given more sunlight in today's RBA minutes release. It is a major dovish shift and the AUD is taking a hit after the policymakers highlighted concern over its relatively high value. The NZD is sinking in sympathy.

HOUSE PRICE RISES EVERYWHERE
Chinese house prices rose on average +4.6% in the year to September, marginally less than the +4.8% rise in the year to August. Among the 70 big cities in this survey, that range was from -2.9% to +16.8% annual change. Increases in both Beijing and Shanghai were mid-range.

GOLD PRICE STABLE
The price of gold is now at US$1903 in early Asian trading, and little-changed from the closing New York price earlier. The London afternoon fix was US$1906/oz.

EQUITIES UPDATE
In New York, the S&P fell away sharply at the end of today's trading, ending down -1.6%. Shanghai has opened -0.4% lower, Hong Kong is up +0.2% and Tokyo is down -0.3% at each of their openings. The ASX200 is down -0.3% in early afternoon trade while the NZX50 Capital Index is up +0.7% near the close here.

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 down -1 bp at 0.27%. The Australian Govt ten year benchmark rate is down -1 bp at 0.75%. The China Govt ten year bond is unchanged at 3.24%. And the New Zealand Govt ten year is also unchanged at 0.54% and the same as the earlier RBNZ-recorded fix of 0.54% (unchanged). The US Govt ten year is up +1 bp at 0.77%.

NZD FALLS
The Kiwi dollar is very much lower today, falling a full -½c to 65.8 USc. Against the Aussie we are firmish at 93.4 AUc. Against the euro we are also lower by about -½c at 55.9 euro cents. That all means our TWI-5 has fallen to 69.2, a -50 bps drop.

BITCOIN FIRM
Bitcoin is up +2.0% from this time yesterday, now at US$11,701. 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

Source: RBNZ

Source: CoinDesk

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38 Comments

by Andrewj | 20th Oct 20, 4:40pm 1603165240

For all of you that used to vote National, what would it take to get you back?

I know this is the job Collins has been hanging out for but losing all those electoral seats really is a huge disaster for the party.

So for me it's a total clean out all the upper echelon, no survivors. The loss of this number of electoral seats leaves National run by a bunch of list Mp's and the risk of losing touch with the community. It's big change time, the people have spoken.
As a someone who was a paid up member for over 20 years, I'm never going to vote for National as it stands today, National needs people like me, it needs to rebuild it's membership it's far to much about the Mp's not enough about keeping strong membership and connection.

by Masher | 20th Oct 20, 4:53pm 1603166011

Disagree. The Rat Pack of Bridges, Barclay, Ross and Walker have presented a massive image problem for the party over recent years. They're like democratically elected versions of Terry Serapisos.

by frazz | 20th Oct 20, 5:04pm 1603166674

Why does it need people like you? What has National every done that has improved your life?

by Andrewj | 20th Oct 20, 5:19pm 1603167544

because I was was a paid up member and you need an active membership. What has any party really done? just lots of empty promises.

by Albert2020 | 20th Oct 20, 5:37pm 1603168644

Yes but I would rather not have to fork out additional disposable income in "membership" dues for the privilege

by puketepapa | 20th Oct 20, 5:58pm 1603169933

You knew English groomed Barclay into his old seat, and remained silent while the furore over Barclay unfolded. Boag was not exactly the type of material one would accept in grandee circles. What was it in National's empty promises you preferred over others. The warning was their for all to see when John Key promised to fix the housing crisis, yet failed to do so the minute he got the power, and instead increased GST which was an instant increase in the cost of building new homes and developing new land. Did you express any concern to your membership committee. You should elaborate further.

by Nzdan | 20th Oct 20, 6:04pm 1603170293

And on the other side of it, what has Labour done to many National "fanboys" that's had a detrimental impact on their lives? A colleague today stated that having Labour in power would be chaos for the downtrodden farmers.... Until I pointed out that many of the typical "farming" electorates in the South Island voted Labour so maybe his view on behalf of others is not shared by those 'others'.

by Andrewj | 20th Oct 20, 6:33pm 1603172003

also a lot of National voters are getting old and thousands drop off their perch every year.

by Jack Lumber | 20th Oct 20, 10:13pm 1603185220

Not many - all SI electorates to Labour. National only won 2 rural and 2 urban in the NI and not by much. I know quite a few farmers friends who realise change is here, not coming, and are getting on with positioning themselves for the new world. They quietly told me there is no way they are voting for National in its current form and leadership as its a road to ruin.

by Andrewj | 21st Oct 20, 7:05am 1603217114

same on this coast National out of the electorates, it takes a lot of arrogance mixed with ignorance to start blaming others. My children, none of them vote N, that's five votes gone my parents would be horrified but it's the future.

National need to move away from big business banks etc and not be the evil capitalist party. People need top be able to afford a house and a decent life, immigration has been a disaster. The rich making off with all the money has been a disaster, why can they not see this.

by refactornz | 21st Oct 20, 8:04am 1603220641

"People need to be able to afford a house and a decent life, immigration has been a disaster. The rich making off with all the money has been a disaster, why can they not see this."

You can't just blame National for that though.

by Jack Lumber | 21st Oct 20, 8:47am 1603223277

100% agree - none of my children and partners would even think of voting for them - their Grandparents would be horrified but they need to recognize this huge shift in belief and attitude and adjust - Im not seeing any sign of it mind you.

by Jack Lumber | 21st Oct 20, 9:10pm 1603267849

Well just spoke to my 80 year old father - blue man - he came straight out - National have been told their policies are out of date its not the 70s. I was a bit stunned. If an 80 year old can say this they had better listen hard in National.

by sharetrader | 20th Oct 20, 5:40pm 1603168804

GB was busy telling jokes to the press today, Gerry in case you did not watch saturday christchurch does not want you to represent them any more
National Party veterans Gerry Brownlee and Nick Smith are promising to stay on as list MPs after losing their long-held electorate seats.
Brownlee, the party’s deputy leader and campaign chairman, said he was responsible for how the campaign was “presented” and would participate in a review of the campaign. Brownlee said representing Christchurch as the city’s only Opposition MP was “the main factor” behind his decision.
“Christchurch needs to have some National presence, and we don’t have that as of Saturday night, so I think there’s a job to be done there.”

by Andrewj | 20th Oct 20, 5:50pm 1603169437

National is stuffed isn't it.

by muzled | 20th Oct 20, 7:00pm 1603173657

A friend texted me that Gerry was staying on earlier.

I replied back that Labour must be ecstatic, Jacinda might even be so happy that she's was inviting him around to celebrate. Gerry and Nick, Labours best friends.

It sums up the problem in the party perfectly though, they're too self righteous to indignant to stand down even in the most obvious of situations.

by iconoclast | 20th Oct 20, 7:08pm 1603174099

National needs to "clean house"
Starting at the very top with Peter Goodfellow

by sharetrader | 20th Oct 20, 9:28pm 1603182482

that is the problem with our parliament now , we have too many numpties in there that need to be moved on but because of the list and us as a voting public unable to effect change on those lists you end up with some of the wealthiest beneficiaries in the country.
its the same for every party , what will it take to get trevor mallard to retire. or to get twyford to go, hopefully they will move eugenie (does not play well with others) down the list and i sure it wont take long for an ACT MP to show their wears and us all wonder how did they get i.
maybe we need a rule you can only do ten years or three elections consecutively, then you have to spend time in the real world

by sparrow | 20th Oct 20, 5:46pm 1603169160

National lost me over housing and immigration.

I think basing the economy on mass low-value tourism, mass low-skill migration and speculation in residential property is making us all poorer.

I think the cost of housing is transferring wealth from the poor and young to old and rich.

I also think growing the population rapidly is insane considering the environmental challenges coming up.

by sparrow | 20th Oct 20, 5:48pm 1603169294

And also I'm not keen on the affiliation with the CCP.

by Plutocracy | 20th Oct 20, 7:00pm 1603173652

I think the cost of housing is transferring wealth from the poor and young to old and rich.

Don't forget to the banks. They're the parasites of the modern economy

by Rob Reid | 20th Oct 20, 8:12pm 1603177977

Visualising a cat with a buffalo sized mosquito sucking it's blood

by MLSmith1 | 20th Oct 20, 7:52pm 1603176767

We don’t need to do anything. The coming dire economic climate will put anyone on the throne - just as COVID has for incumbent leaders worldwide

by Jack Lumber | 20th Oct 20, 10:05pm 1603184749

Well firstly they have to accept what has happened. They are starting to say "oh well they all voted Labour to keep out the Greens" - if they believe this they are doomed and avoiding the facts. We are seeing a transition of power from the baby boomers to the new generation and its very different. Running a campaign based upon 1970s style is - well pathetic and so out of touch. Judith has to go - her style, patronising and condesending manner is a complete turnoff to woman and younger voters. Saw some comments from the Rangitata National campaign manager - "Our people F****d us and are stupid" - great start - not - entitled - yes. The voters are not wrong - you are. Labour had all their policies endorsed by a huge margin - time to get on and accept change is here and stop fighting the tide. For farmers they need to quickly get in the tent and start getting some control on the conversation or else be further left out of the decision process. Storming around saying we are the backbone etc doesn't wash as the result shows.
The real story of this election is how the Greens increased their vote, and won a seat, after being in coalition - I thought Jacinda would have vacuumed up all the soft green voters but was very wrong. In 3 years more oldies will have left us and more young ones joined the pool. In 3 years you will have a Labour Greens coalition as Labour will fall a bit from here but the rise of the Greens is worth watching and maybe a sign of the future.

by Andrewj | 21st Oct 20, 7:09am 1603217342

Some farmers around here need a boot up the backside for what they are doing to the rest of us. Totally unacceptable environmental outcomes often backed by Regional councils who believe they should support business.

by Sorbent | 21st Oct 20, 4:12am 1603206764

Context: As an IT professional, I left Wellington for London last year where I'm now working in a fintech. I think I would return to NZ if house prices dropped or I became a millionaire.

The key issues for National to get my vote would be sharing my values. Collins praying in a church does not help. Bill English refusing to take a stance on abortion does not help. The cost of housing increasing while John Key was Prime Minister does not help. Jacinda Ardern promising to decriminalise abortion, big help. Labour promising to make letting fees against the law, big plus.

Currently I don't see any meaningful difference between National and Labour on immigration or housing, so I lean left as support for euthanasia/decriminalising abortion/protecting renters.

I hate the situation that some of my friends are in. For example I have a friend who is a jeweller with an awful boss, and he has.. no hope. He is unlikely to ever make enough to stop renting, and he doesn't have skills that are useful internationally so..

by Andrewj | 21st Oct 20, 7:07am 1603217260

Issues around beliefs like the sanctity of life, euthanasia are not a winner for any party, people don't change their beliefs. Best of the party creates the best environment it can for people to get ahead and see a decent future, create a framework for success.

by Sorbent | 21st Oct 20, 10:20am 1603228822

Beliefs (maybe values is a better word to use here?) are tricky to do well, but (imo) Labour have won this space with basic charisma and letting more of New Zealand see their values represented (whether or not it's true). They did not need to take a strong stance to win in this space because National were doing their best to fulfil the old, white, religious stereotypes without any nod towards progressive social policy.

Maybe I could frame this differently. If I had different beliefs to Judith Collins or Jacinda Ardern, but had to work with one of them, I would want to work with Jacinda.

Or I could frame it differently again. Labour have cast a big tent that many people can see their values in, National have a drawn a small box and told everyone that obesity is a matter of personal responsibility in the middle of a pandemic.

by Sorbent | 21st Oct 20, 10:36am 1603229818

Actually I think I should take this in a different direction.

National is unlikely to appeal to me on social issues over Labour, so to get my vote they would have to offer a compelling economic case. Tax breaks won't cut it, because the increase in cost of a house each year is usually more than I pay in tax, so doing something about the cost of housing would be a great start. Last I heard they were still defending house price increases during the last 9 years of National.

I care about immigration, and foreign policy with the CCP, and lots of other issues, but I would forgive almost anything for a plan that I thought would deal with housing costs (I never believed the 100k Kiwibuild plan, so it counted against Labour when thinking about who to vote for).

by Jack Lumber | 21st Oct 20, 8:59am 1603223960

Housing is the key here - I own a section with an older, but very tidy nice house on it - Im removing it to build a new house (yeh Boomer). I decided to give it away free (not really as you need some land and have to shift but for @$130k you will get it on the land and setup). I wasn't sure what response I would get - well my phone has gone none stop - its been soul destroying for me having young couples with 2 to 3 kids coming around all wanting it - they are hard working, good people who just want a chance but cant rent and save a deposit. I have to choose 1 couple and just wish I had 10 to give away. Im not looking forward to telling the others I can tell you. We need a real circuit breaker here as Im not saying you give people houses but they have to have a chance to get in and work hard to pay it off.

by sharetrader | 20th Oct 20, 4:46pm 1603165576

unbelievable, as chairman is it not his responsibility to make sure his bank lends responsibility and he carries enough capital for any down turns,
after all he had nine years to bring in policies to curb house price growth, and now he is head of the major NZ lender he wants the RBNZ to do his job for him
Sir John Key: ‘We worry about a potential asset bubble growing’
Former PM and current ANZ chair calls on RBNZ to extend capital requirements holiday.

by blobbles | 20th Oct 20, 5:17pm 1603167434

Don Key was obviously a charlatan for international banks, I think that was pretty clear for anyone that looked hard enough. Orr and co are just following on from his lead. It certainly did not surprise me when he left to become chairman of ANZ bank. Once he set NZ up for even more exploitation from the big Aussie banks, they gave him a "thanks mate" chairman job. He scratched their backs, they scratched his. The revolving door between government and big business and all the corruption it brings will likely continue unabated however.

by J.C. | 20th Oct 20, 8:04pm 1603177461

Puppet for international banks is more apt

by Chairman Moa | 20th Oct 20, 6:55pm 1603173305

JC is dumber than I though. Someone smart should've never taken on a leader position knowing it'll be an uphill battle to unseat the current government. Now she lost the election, the stigma will be with her...
Learn from JK!

by muzled | 20th Oct 20, 7:06pm 1603173972

When else was she ever going to get the chance to be the fearless leader though Chairman?

She's had about 3 cracks at getting the job before and been resoundingly rejected every time because most of her colleagues hate her. When Bill English stepped down I think she got two votes.

by frazz | 20th Oct 20, 7:58pm 1603177086

She makes a mean cheesecake...enough said

by Independent_Observer | 20th Oct 20, 9:42pm 1603183375

There are/were clearly a number of National party members who thought they were more talented than they really were - but were simply living in the glow of Key and English. Remove that leadership group and the quality (or lack of) those remaining has become clear. Quite possible Labour will do the same in the future if/when Adern goes.

by sharetrader | 20th Oct 20, 10:17pm 1603185471

if you have a look at the photo of the new caucus for labour you see kira allen sitting at the top table, i expect her to get an associate minster role this time around and maybe Kieran McAnulty to take the racing minister from WP. at the moment his is junior whip .
they have a lot of what i would class as younger people coming through in there late thirties and early forties, a lot of health people this time round as well as the usual lawyers, teachers, union people. and a refugee that started as a cleaner whom i will be keeping an eye on to see how he goes