A review of things you need to know before you go home on Tuesday; more interest-free lending, retail strong for food & drink, budget deficit halves, ANZ exec pay revealed; bond rates jump again, NZD firms again, & more

A review of things you need to know before you go home on Tuesday; more interest-free lending, retail strong for food & drink, budget deficit halves, ANZ exec pay revealed; bond rates jump again, NZD firms again, & more
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Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes today.

TERM DEPOSIT RATE CHANGES
NZCU Baywide Group (NZCU Baywide, Aotearoa, NZCU South, NZCU Central) trimmed TD rates today.

MORE SURVIVAL LENDING
Cabinet has agreed to extend the interest-free Small Business Cashflow Loan Scheme by three years and it will consider making larger loans available. It's a move that may see standard institutions pull out or pull back from SME lending (and concentrate only on housing and big corporates?)

TIMELINE
Research, Science and Innovation Minister Megan Woods says Pfizer and BioNTech's COVID-19 vaccine could be delivered to New Zealand as soon as the first quarter of 2021.

A BIG SPENDUP ON FOOD & DRINK
Statistics New Zealand says spending on food and beverage services last month was the second highest in over 20 years following Auckland moving to Alert level 1 early in the month.

ONLY HALF THE TREASURY FORECAST
The Government's books are only -$3.2 bln in the red in the three months to September, as New Zealanders spend more and require less support via the wage subsidy than expected. That means the deficit is less than 50% of the PREFU forecast of -$6.8 bln.

PAY AT THE TOP
ANZ's annual report is out and it gives the detail on what the bank's top people were paid in the 2020 financial year (to September 30). In terms of this side of the Tasman, ANZ NZ CEO Antonia Watson - officially appointed during the year - received A$1,639,428 (~NZ$1.75 mln), up from the A$389,695 she received prior to getting the job in 2019. Previous ANZ NZ CEO David Hisco, who departed during 2019 before the end of the year, got A$1,497,588. John Key in 2020 got NZ$391,000 for chairing ANZ NZ (up from NZ$382,950 in 2019). Key's also on the ANZ parent board in Australia for which he separately received a total of A$301,000 in 2020, up from A$249,780. His total pay received in 2020 came to over NZ$700,000.

SETTLING
ANZ is reporting its truckometer monitoring shows traffic volumes returned to more normal volatility over October as activity settled down after alert levels eased and catch-up activity was evident. The Light Traffic Index lifted a further +0.6% in October, while the Heavy Traffic Index eased -3.0%. Both are still higher than the same month in 2019.

VICTORIAN REBOUND LIFTS ALL BOATS
In Australia, the October business sentiment survey from NAB is reporting a sharp improvement following the lockdown easing in Victoria

COAL MINER NEAR BANKRUPTCY - AGAIN
US coal mining giant Peabody has warned it may default within the next month or two unless lenders accept a debt haircut deal. Less than 4 years ago, it emerged from an earlier bankruptcy. Low interest rates are not available to it because of its precarious cash flow deficits. The company itself says it may not be viable within the next 12 months. Peabody also has major Australian mine exposures and debt from these operations are part of the haircut they want lenders to accept. Part of Peabody's woes relate to China's sudden cut in coal imports, especially from Australia, down -47% in October.

GOLD PRICE THUDS
The price of gold has bounced off its low in Asian trade, now at US$1871/oz and down by -US$84 from this time yesterday. The closing New York price was US$1864 and this was -US$3 lower than the afternoon London fix. Still, these prices are much higher than the levels 2020 opened at, US$1515/oz.

EQUITIES UPDATE
Although the S&P500 was up more than +3% in midday trade, it fell away in late afternoon activity and ended up +1.2% on the day. Shanghai has opened up +0.1%, Hong Kong is up +1.3% and Tokyo is up +1.1% early, in each of their trading sessions today. The ASX200 is up +1.4% so far today in early afternoon trade. The NZX50 Capital Index is only up +0.5% in late trade however.

SWAPS AND BOND YIELDS MUCH HIGHER
Short end rates rose again yesterday along with long end rates. The 90 day bank bill rate is unchanged today at 0.29%. The Australian Govt ten year benchmark rate is up +13 bps to 0.91%. The China Govt ten year bond is up +1 bp at 3.26%. And the New Zealand Govt ten year is up +12 bps at just over 0.72% and above the earlier RBNZ-recorded fix of 0.70% (+12 bps). And the US Govt ten year is back up another +10 bps to 0.92% in the continuing US election shadow.

NZD UP AGAIN
The Kiwi dollar has risen again today and now up to 68.3 USc and its highest against the USD since March 2019. Against the Aussie we are up at 93.8 AUc. Against the euro we are firmer too at 57.7 euro cents. That all means our TWI-5 has risen to 71.2.

BITCOIN LOWER AGAIN
Bitcoin is down -1.0% from this time yesterday at US$15,359. The bitcoin rate is charted in the exchange rate set below.

This soil moisture chart is animated here.

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47 Comments

The price of gold has bounced off its low in Asian trade, now at US$1871/oz and down by -US$84 from this time yesterday.

Forced liquidation to meet margin calls?

Good question. But any evidence?

That's not available to the public - I took over a gold reuters dealing trading operation for central banks and middle east clients on my desk when the normal dealer had a protracted illness over a couple of months. I certainly instructed my guys to quote low bids in times of general price volatility in all other markets. They still got hit.

Its not margin calls it’s more to do with Phizers vaccine announcement. The fundamentals for PM’s remain the same.

What - nobody covered shorts at a loss in any market. Or liquidated losing long positions in reaction to the news.

Def holding my gold for now

Aussie bank stocks roaring with the standout being NAB up 7.7%. Surely this is a good indicator of the resilience and strength of Antipodean bubble economics. I'm surprised little attention is paid to the bank stocks given that they're the engine of all this and can run on fuel created from next to nothing.

I look at ANZ once a day

CNN have taken electorial college votes off Biden.
AZ & GA.

https://edition.cnn.com/election/2020/results/president?iid=politics_ele...

Real Clear Politics, took off PA.

Where is the blue wave?

https://youtu.be/L55mppgpj2k
The Goodfellows.

Head of DOJ election crimes unit RESIGNS in protest after Bill Barr authorized federal prosecutors across US to pursue 'substantial allegations' of voter fraud during presidential election despite little evidence - as AG tears up rule book Link

Due to recounts/law suits? Doesn't really matter with PA in the bag.

Every person should watch that.

No, Q did not send me here, nor do I sit in my Dodge Ram at night polishing my AR-15 with Freebird playing on loop.

Theres questions, and they need answers. If the Democrats are so confident they have the numbers, they should be supportive of finding answers.

The legal system is responsible for adjudicating electoral issues not the Democrats. It needs to be an independent judiciary outside of the political sphere. Also, everyone loves Freebird.

There have been 31 recounts in the past 20 years and only three times have they changed a state's election result. A recount has never resulted in a change of more than 500 votes. Georgia is the only state which Trump could take off Biden. Despite lots of talking, there has been no evidence of fraud or bias which would make a recount go one way or the other.

Surely this is a delegitisming exercise to call the Biden presidency into disrepute.

Trump surely endured the same with Russiagate.

Tit for Tat is not an unknown human response.

The Dems have spent the last 4 years ripping the face of Trump, now Biden says it’s now time for healing and to bring the country together.
What utter BS.!

Have you seen what Trump was up to? Divide and conquer.
For example, Mexican immigrants:
“They’re bringing drugs. They’re bringing crime. They’re rapists. And some, I assume, are good people.”
It is not a bad idea to try and undo some of that.

Plenty of evidence - now many sworn affidavits of election and postal workers observing illegal actions.
The media are actually now untruthful repeating their mantra ‘no evidence’
There’s also circumstantial evidence from data analysis of the counting trends.
https://www.newsmax.com/us/detroit-affidavit-vote-fraud/2020/11/09/id/99...

I've just had a look at the Jessy Jacobs affidavit (your link is only to one single affidavit, not many). They are making several allegations.

Jessy is stating that they were asked to change the date on the ballots when they were sent out to voters back in September, not when they were received (which is what Trump campaign alleged was the issue ie stop the count). I'm not sure how the date of when the postal ballots were sent out to voters indicate fraud provided they were received in time for the voter to be able to utilise them? Can anyone explain?

The good news is that if the allegation is true that people who voted in person were also sending in absentee votes, then that is actually relatively easy to uncover. There will be two duplicate ballots. And if this person is telling the truth, they should find multiple instances of this and it will be sufficient to have swung the election for Trump because the numbers of instances will be so high.

People are actually entitled to register to vote in person and vote by post. They may have wanted the option back in Sept not knowing what the pandemic would be like in November. It doesn't necessarily follow that there is any fraud. As far as I am aware the election protocol prevents double voting. Although, as aforementioned. It's easy to uncover so further evidence should be forthcoming.

It's also worth noting that one person making a claim is sufficient to trigger investigation, but there would have to be further evidence to prove any kind of criminality. Otherwise any old person could just rock up, accuse someone of something via word of mouth and force a prosecution. The law requires a greater burden of proof.

With all this going on, why didn't they video it covertly or even overtly? Why didn't they report is earlier? People are always covertly videoing dodgy stuff? No one else noticed people coaching democratic votes? Everyone else at the voting center was a crooked democrat criminal? Not a single person coming in noticed something? Surely there must be more witnesses? Again, there will probably need to be much more substantial proof. But that's the beauty of the law. Someone makes an allegation and then it gets investigated.

On this article you can read the affidavit;

https://thepostmillennial.com/sworn-affidavits-allege-voter-fraud-in-mic...

I think the date deadline issue is around when a booth can legally accept a ballot. So Pennsylvania & maybe a few others sought a court ruling that they could receive late votes, or late but date stamped. Then there is the delivery issue - postal service plus informal ‘delivery’ by civilian car or van with possible influence by political operatives.
There are also some interesting sophisticated data analysis and BI tracking systems benchmarking over time periods - comparing normal data vote counting even in scenarios where Biden could be expecting 60-70% in his favour but tracking st 90-100% batches. That’s not necessarily fraud but it is circumstantial evidence of unusual numbers over time.

Heard on US radio - a number of mail in ballots were received with the DOB not filled in. The receiving booths entered default DOB's of 01/01/01. Later, those votes with a default DOB were removed by the scrutineers to physically verify the existence of the voter and get a true DOB

Isn't it interesting that Republicans are thrilled about their success in the House and Senate and have no problem accepting those votes, even though they occurred on the exact same ballots, in the exact same election protocols as the votes they are contesting for President?

The level of hypocrisy is incredible.

if there is doubt you need to investigate and show the people the results. Otherwise you end up with something akin to the IRA, there be killers out there with little to lose.

Is getting rid of trump worth destroying people's faith in democracy?

Errrm. When have I suggested otherwise Andrew? The Dems aren't preventing the Republicans from pursuing their legal challenges, nor could they. They're not above the law. I absolutely agree that for the health of their democracy, they need to investigate every single allegation and do recounts as necessary, now that allegations have been made.

I just don't believe, that the kind of widespread fraud that the Trump Campaign is alleging, is possible. There is undoubtedly, always, a small level of human error. There might also be a small amount of fraud , that slips by the checks and balances but I will be very surprised if that turns out to be substantial enough to change the result in Trump's favour.

And it doesn't change the fact that the Republicans are overt hypocrites for only taking legal challenges to the Presidential campaign because they don't like the result, but not challenge the House/Senate results from the *same* ballots because they are okay with that result.

I can't wait for the "evidence" and the legal process. It absolutely needs to happen. I welcome it.

The press was emphasising the presidential election when many others were simultaneously in play. I am certain public media pressure was being exerted to force Trump to concede defeat when it was not a regulatory necesssity.

It's clearly never a regulatory necessity, just a behavioural norm. Of course DT does not go in for those regardless of any social pressure (which is generally how behavioural norms are 'enforced').

Audaxes, they did. I'm still very confused by how early Fox called it for Arizona. But then not Nevada, later on, when there were hardly any votes left and a more substantial Biden lead at that point.

I didn't and still don't understand it. But that isn't entirely unusual for the American networks. They are all just making projections aimed at gaining ratings. Usually though, the networks aren't all that far off the mark. They probably won't be this time either.

About Fox's ratings
"Catastrophic Viewership Collapse"
https://thenationalpulse.com/breaking/fox-ratings-falter/

NZX50 back at ATHs. But how's this. The Nikkei hit a level it hasn't seen in 30 years.

https://mainichi.jp/english/articles/20201109/p2g/00m/0bu/087000c

Keep cutting official interest rates in half and kid investors government transfer payments into the public's pocket will sustain future asset cash flows at historical levels or higher and investors will capitalise their discounted present values.

Our view is that no form of investment risk is always worth taking without regard to valuations, fundamentals, economic conditions, or market action. The strategy of buying and holding index funds for the long run is essentially a strategy that says that market risk is always worth taking.

Yet the iron law of investing is that a security is nothing but a claim on a future stream of cash flows. Valuation is a crucial determinant of long-term returns. The higher the price an investor pays for those cash flows today, the lower the long-term rate of return earned on the investment..

The corollary is also true. The lower the long-term rate of return demanded by investors, the higher the price moves today. So clearly, changes in investors' attitudes toward risk will strongly affect short-term returns. If investors become more willing to take market risk, it is equivalent to saying that they are demanding a smaller risk premium on stocks (that is, a lower long-term rate of return). Prices rise as a result. Now, the fact that current stock prices are higher also implies that future long-term returns will be lower, but that's part of the deal.Link

I should put a trigger alert on this, Auckland house price rises comfortably the highest of any prime city.

https://content.knightfrank.com/research/323/documents/en/prime-global-c...

I guess greater foreign fools with superior wealth resources will be able invade and deny affordable housing for ordinary households. Didn't the Sultan of Brunei buy 12 or more Auckland properties over a decade ago?

Why do you need a trigger alert? Not the highest of any 'prime city' but the highest of the 'prime cities' in the Knight Frank Index.

Possibly - here is a link to my old home in London which I bought for STG 219,000 in 1989 and sold for STG 402,000 in 1998, now valued at ~STG 2.04 million. I am sure the base salary for bank dealing traders has not risen much above the ~STG 100,000 to STG 150,000 range.

That's quite interesting. So what has an equivalent Auckland house done over that period? Also the exchange rate has moved massively in the Kiwi's favour and I would say Auckland has performed better.

Yep, sold up at 3.06 Kiwi to 1 STG before I returned to NZ.

Moved to Wellington so I have no real experience to call upon in respect of Auckland prices.

From around 2010 NZ, has far outperformed UK property - both at a headline and currency adjusted level. Covid and Brexit are only going to accelerate that trend. You are correct on banker salaries as well.

1989? You'd have had a close-up-and-personal look at a real property crash then.
I bought in Old Town, Clapham Common ( just a stone's throw from yours) in '93 -£205k as part of my "Now! Where do I want to live now that I'm 'retired', tour" - and people were still shivering in their boots about what had just happened. New build; off the plan (Berkeley Group) and the house across the Mews couldn't settle. It was sold up by the developers for the balance of £180k they were owed before I'd even moved into mine with the buyers doing their deposit of £20k. Instant paper loss! Sold '96 when I had grand hopes of "Farming, in New Zealand!" being it.
Until you've seen or been part of a property crash, it won't really mean a thing to those who've just read about it online.

Great story. You're doing very well if you were looking at retiring in 89 by the way!

Same property also sold in 1997 for 395k

Yes that was my mistake - my memory failed me.

Are you incapable of accepting a post without semantics? Ok, what prime cities are missing from the Knight Frank Prime Cities Index then?

It's far from semantics. It's being honest and accurate with data sets.

You didn't answer the question.

You and JC should both be in polly-tiks ... awesome