A review of things you need to know before you go home on Wednesday; more retail rate cuts, higher dairy prices, higher log prices, lower credit card balances, swaps lower, bonds higher, NZD firms, & more

A review of things you need to know before you go home on Wednesday; more retail rate cuts, higher dairy prices, higher log prices, lower credit card balances, swaps lower, bonds higher, 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
BNZ cut its 6 month fixed rate back to market levels, and its 18 month rate to 2.49% matching rival ASB.

TERM DEPOSIT RATE CHANGES
SBS Bank has cut its TD rate offers today.

DAIRY PRICES RISE ...
Today's dairy auction brought only marginally higher prices (+0.4%) but it was the third rise in a row. But it is impressive when you realise milk production is rising around the world. What happened is that Chinese buyers returned to the market (after their Golden Week holiday), And Europeans (and possibly the US ?) are back into pandemic lockdowns that disturb supply chains in those major countries. So the immediate future for New Zealand supply looks quite good, in the view of many industry observers.

... BRINGING HIGHER FARMGATE PRICE EXPECTATIONS
Westpac has upped its Fonterra farm gate milk price forecast for the 2020/2021 season to $7.00/kgMS from $6.50, the highest of the forecasters we monitor. BNZ has also upped theirs, to $6.80. (The 2019/2020 actual milk price Fonterra payout was $7.14/kgMS.)

... PROVIDED OUR WEATHER COOPERATES
Our irrigation network has been built out well and most rivers and reservoirs are full and running to plan. So if La Niña results in a dry SI east coast, dairy production there should be ok. La Niña should mean good grass growing conditions in NI dairy regions.

HIGHER PRICES
Log prices are rising again on domestic and China demand. But there are questions about the sustainability of the Chinese demand.

60% BAU SALES RATE
Activity remained strong in Barfoot & Thompson's auction rooms during the election week. There was zero evidence of this election holding back consumer spending due to uncertainties.

$1 BLN HIT
Credit card balances in September were more than -$1 bln less than the same month a year ago, but at least they are now nearly +7% higher than they were in April. Credit card activity is taking a double hit; one from the pandemic, the other from Buy Now, Pay Later schemes. Still, bank bosses will be worried that they haven't been able to get any growth traction since the May-June bounce - and that one was only a partial recovery.

AVOIDING INTEREST
Compounding bank boss angst is that the proportion of credit card debt that incurs interest is still declining, down to a near-record low 58%.

ANTI-COMPTETIVE BEHAVIOUR
Hong Kong-controlled Wilson Parking has agreed to divest the leases of three car parking facilities it currently operates in central Wellington, in a settlement agreement with the Commerce Commission. Itfailed to get competition authority when it bought the leases and promplty hikes fees as it had a dominant position there.

AUSSIE RETAIL SALES GROWTH EASES OFF
In Australia, their bounce-back retail sales surge faded in September although there is still an echo of that impact still showing.

GOLD PRICE RISING
The price of gold is now at US$1919 in early Asian trading, and up a full +US$13 from the earlier New York close. They in turn were up +US$8 from the afternoon London fix. US uncertainties are adding to golds demand today. Silver is following.

EQUITIES UPDATE
After a mid-day flurry, the S&P500 retreated later in the session as hopes for new stimulus were dashed, and ended up only +0.5%. Shanghai is down -0.3% in early trade, Hong Kong is up +1.2%, and Tokyo is up +0.4% in mid-morning trade. The ASX200 is up +0.1% early afternoon trade and the NZX50 Capital Index is down -0.3% in late trade.

SWAPS LOWER, BONDS HIGHER
Yesterday, swap rates slipped with the two and three year rates getting down cloer to zero again. 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 0.27%. The Australian Govt ten year benchmark rate is up +4 bps at 0.79%. The China Govt ten year bond is down -2 bps at 3.22%. And the New Zealand Govt ten year is also up +5 bps at 0.59% and above the earlier RBNZ-recorded fix of 0.56% (+2 bps). The US Govt ten year is up +5 bps to 0.82%.

NZD FIRMISH
The Kiwi dollar is back rising again and now at just on 66 USc but that is mainly because of USD weakness. Against the Aussie we are holding above 93.3 AUc. Against the euro we are also holding at 55.7 euro cents. That all means our TWI-5 has held at 69.3.

BITCOIN FIRMER
Bitcoin is up another +2.7% from this time yesterday, now at US$12,012. That means this crypto is up +12% from the start of October and up nearly +40% from just before the pandemic hit in earnest. 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 »

The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
End of day UTC
Source: CoinDesk

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.

27 Comments

BTC prices to watch. $12,500 = 2020 ATH ($300 to go), $13,900 = 2019 ATH, $20,000 = ATH.

Shame about my alt coins and even stocks though. Ethereum is still hanging on and doing well overall this year (+150% or something I think)

Yes. Watching the BTC action on Bitbank in Japan and it's furious. The Bitcoin horse may have bolted with all the news this week. Time will tell.

ETH / USD is up 180% YTD but that's kind of meaningless as most ETH owners didn't buy and hold on Jan 1.

Chamath Palihapitiya had one thing to say y'day. HODL.

Looking like BTC has effectively breached US $12,000 support level.

Yes but it needs to turn 12k into support over perhaps a week or two (easier said than done with a USA election coming). If it can do that, $14k could be next, then it is effectively clear skies above.

If it can do that, $14k could be next, then it is effectively clear skies above.

Meh. It could or it couldn't. Do not necessarily form your views from YT or Twitter. That's foolhardy.

When I say clear skies I mean literally no charts that tell us what will happen

Gotcha. Even as a TA skeptic, some of the patterns are hard to ignore.

I agree with that. The trend has been noticeably steady over the last month.

Things have been going a bit flaky around here. Interest media bias ranking.
https://mediabias.co.nz/media/interest.co.nz
https://mediabias.co.nz/home

There are two types of NZ MSM. Left and lefter.

ACT=Fake libertarians
Labour=Chardonnay Socialists
National=Self-interested crony capitalists
Greens=Mad as hatters

Shaw & Co plus Green school are the crony capital prize lifters.

it's a single example. Crony capitalism is National's bread and butter.

Kris "I can't put anything in writing" Faafoi is banana republic stuff and he is still a minister. I guess he didn't get anyone to tile his roof.

Uhhh they think Newstalk ZB leans heavily left. I think their algorithm needs a lot of work.

Incredible! I have to flick over to red radio for the news feed given how nauseatingly dripping wet the ZB feed is. Goes to show how far the window has shifted left.

that is crap how can you call newstalk left leaning, hosking, would be blowing his top, mike gets his and his kates opinions published in the herald to help his beloved national party and i have seen the herald retract a story earlier about jacinda being more popular than JK after he blew up next morning on his radio show.
i would say whomever came up with that they measure it has never listened to newstalk , apart from mlush (whom is getting roasted at night) the rest of the hosts have been acting like we are in a funeral and the world has caved in and have been quite open in that they support the national party.
next they will be saying newshub am show is left leaning especially mark richardson
https://www.nzherald.co.nz/nz/mike-hosking-already-a-mess-we-are-all-in-...
https://www.nzherald.co.nz/nz/mike-hosking-national-can-still-win-this-e...
https://www.nzherald.co.nz/nz/mike-hosking-on-tvnz-poll-national-surges-...

Of note, it is most not usual, unusual to have people sharing rooms in quarantine, fly in fly out workers.

https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018769412/mi...

The fishing industry has big leverage in this country. I helped someone in the employment tribunal against them once and they pulled out all stops, no way my associate was ever going to win against that might. If you are looking for a weakness in the Covid plan, well big business is one. However you have to wonder why they are bringing in foreign workers.

Is there a fishing school PTE? There must be plenty of young men and women who would love the chance to get into this industry. And it would make a welcome change from the pretend PTEs delivering dubious Level 4, 5 and 6 Certificates in Business as the road residency.

according to the CEO of sealord they can not find kiwis to train up that want to do the work. they are supposed to set up training and improve conditions for kiwis this time around to bring in the workers, sorry wont hold my breath on that one

When I lived in Aberdeeen Scotland 50 years ago the population of the fishing towns Fraserbrugh and Peterhead had the biggest savings in the UK and the highest incomes for manual workers. Understandable since they were away from home for weeks at a time and they had a job seven times more dangerous than coal mining. If NZ paid these workers elite wages then they would find Kiwis willing to do the job.
Under-cutting Kiwi workers by employing staff from poorer countries will continue until they increase the cost of a work visa.

Bad news Auckland.

https://i.stuff.co.nz/national/health/coronavirus/300139095/covid19-auck...

Twitter started murmurs this afternoon.

Best we all take a "Spoon Full of Sugar"

That explains this...

https://mobile.twitter.com/covid19nz/status/1318721260524769280

The app has recorded a total of 95,433,191 poster scans, and users have created 3,985,810 manual diary entries.
The current low usage of the app means if there is a future outbreak our contact tracers might not get a head-start on breaking the chain of transmission.

Their problem is by showing the activity numbers its easy to conclude that this near as tacks you in real time.
Exactly what was not promised.
MoH or MoFools?

it will be interesting to watch to see if they can ring fence this with quick track and trace. it seems the first guy that caught is was doing everything he could to make sure he followed good practice but close contacts ( fellow office workers) seemed a bit relaxed about the risks
Covid-19: Auckland pub owner concerned as patrons are deemed 'close contacts' of new coronavirus case
https://www.stuff.co.nz/national/health/coronavirus/300139095/covid19-au...

Yes, interesting to see the how now.

For instance, now people from the pub are recommended to double test... - from your link..
ARPHS said anybody who attended The Malt on Friday and got sick, even after a negative test result, should self-isolate again, and get tested again.

Remember, in Auckland, you are not allowed a snake bite, even on a barmmy spring evening..

And its ARPHS that is driving the bus.
MoH nothing, all ARPHS in comms.

https://www.rnz.co.nz/news/national/428890/infectious-covid-19-case-visi...

Auckland Regional Public Health Service (ARPHS) issued the notice as it tries to establish the person's movements while they were infectious.

An ARPHS spokesperson said a few close contacts in the pub had already been identified and were being contacted. The pub's staff are also getting tested.

- lets get ARPHS people in front of the camera, don't need second MoH stuff.