What happened Monday

A review of things you need to know before you go home on Monday; Simplicity raises its floating rate by +35 bps, Firma censured, rents up, Drylie leaving, swaps up and steeper, NZD unchanged, & more

11th Oct 21, 3:59pm by David Chaston

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

MORTGAGE RATE CHANGES
Non-bank fund lender Simplicity has increased its floating rate by more than the OCR, raising it +35 bps to 2.25%. Bank of Baroda raised their by +25 bps, along with their one and two year fixed rates.

TERM DEPOSIT RATE CHANGES
Bank of Baroda raised some TD rates too.

CENSURE BUT NO PENALTY YET
The FMA has censured Firma Foreign Exchange Corporation (NZ) after finding it had materially contravened a number of its obligations as a licensed derivatives issuer because it failed to conduct product suitability tests for clients, repeatedly failed to meet net tangible asset requirements, did not regularly provide statements to derivative investors regarding their investments, and failed to have adequate and effective systems, policies, procedures and controls. Auckland-based Firma NZ provides foreign currency exchange forward contracts to retail clients in New Zealand. It has been licensed as a derivatives issuer since 2015 and is a fully owned subsidiary of Firma Foreign Exchange Corporation, based in Canada.

SBS BANK CEO LEAVING
SBS Bank CEO Shaun Drylie is to leave the bank at the end of the year after five-and-a-half years in the role. Drylie is relocating to Christchurch.

WILL FARMERS BE INFLATION WINNERS?
ANZ suspects they may be on the right side of rising food inflation. They say: "Rising global food prices bode well for export returns, but inflation is pushing up the cost of production. The supply of many commodities is very tight so we could see commodity prices reach new heights. We are forecasting average farmgate returns for beef and for sheep meat to be at record levels this season."

RECORD RENT NEIGHBORHOODS
We updated our suburb rent charts from MBIE data, and a number have reached record levels, including Manukau at $620 per week, Papakura at $600, Franklin $570. In the Central North Island, Hamilton City is now at $480 per week, Tauranga at $595 and New Plymouth at $483. In the Wellington region, Porirua is now at $625 per week, Lower Hutt at $575, and Upper Hutt at $580. In the South Island, records are set in both Christchurch City at $440 per week and Invercargill at $370.

RETAIL PAYMENT SYSTEM BILL PROGRESSES
The Retail Payment System Bill, which will regulate the cost of fees small businesses are charged by their banks for accepting Visa and Mastercard card payments, has been introduced meaning it's now public and awaiting its first reading. The Bill will require reductions in interchange fees as soon as possible, enable direct intervention by the Commerce Commission to regulate different participants in the retail payment system, and introduce a disclosure and reporting requirement to enable the Commission to monitor the retail payment system. After the first reading of the Bill, it will be referred to the Economic Development, Science and Innovation Select Committee for four months, with Commerce and Consumer Affairs Minister David Clark wanting the regulations to come into effect next year.

PANDEMIC UPDATE
In Australia, the explosion of Delta cases in Victoria has fallen to 1612 cases reported there today after Sunday testing. There are now 19,012 active cases in the state. In NSW there were another 496 new community cases reported today with another 360 not assigned to known clusters. They now have 6,731 active locally acquired cases which is lower, but they had 8 deaths yesterday. Queensland is now reporting zero new cases again. The ACT has 32 new cases. Overall in Australia, more than 62% of eligible Aussies are fully vaccinated, plus 20% have now had one shot so far. There were no new cases in New Zealand at the border, and 35 more in the community. So far, 57% of eligible Kiwis now have both shots, another 25% the initial shot. So far the New Zealand vaccination effort is faltering (81.9% of Kiwis nationally aged 12 and over and only rising slowly) and the Australian is also slowing with theirs now up at 82.2% of all 16 year olds and over.

GOLD LITTLE-CHANGED AGAIN
Compared to where this time Saturday, the gold price is down -US$1 at US$1756/oz in early Asian trade.

EQUITIES MIXED
The NZX50 Capital Index has started the week down -0.2% in late trade. The ASX200 has started -0.5% lower, seeing nothing to celebrate in NSW's 'Freedom Day'. The very large Tokyo market has opened up +1.4%. Hong Kong has opened up +1.8%. Shanghai has opened up +0.3%. Wall Street will be on holiday tomorrow for Columbus Day (a partial US holiday). The S&P500 futures suggest it will be down -0.3% when it does open.

SWAP & BONDS RATES RISING
We don't have today's closing swap rates yet. They probably rose in a steepening pattern with the 1yr up +2 bps through to the 10 year up +5 bps. We will update this if there are significantly different changes when the end-of-day data comes through. The 90 day bank bill rate is unchanged at 0.66%. The Australian Govt ten year benchmark rate is now at 1.71% and up another +4 bps from where we opened this morning. The China Govt 10yr is now at 2.94% and up +2 bps. The New Zealand Govt 10 year rate is now at 2.09%, (+4 bps from this morning) and still above the earlier RBNZ fix for that rate at 2.07% (+5 bps). The US Govt ten year is now at 1.61% and unchanged from when we opened this morning.

NZ DOLLAR HOLDS
The Kiwi dollar is holding at 69.4 USc today after a Saturday slip and a small firming today. Against the Aussie we are little-changed 94.8 AUc. Against the euro we are firmish at 59.9 euro cents. The TWI-5 is now at 73.1 and still in the middle of the 72-74 range we have been in for most of the past eleven months.

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BITCOIN HOLDS
The bitcoin price is now at US$55,146 and little-changed from where we opened this morning. Volatility in the past 24 hours has been moderate at just on +/- 2.2%.

This soil moisture chart is animated here.

Keep ahead of upcoming events by following our Economic Calendar here ».

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

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60 Comments

by J.C. | 11th Oct 21, 4:12pm 1633921947

Quite an in-depth read on stablecoin Tether and its threats to financial stability.

https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where…;

by CWBW | 11th Oct 21, 4:15pm 1633922138

More upward rent revision may be on the table as it only make sense that landlords can't be absorbing both inflation rises and mortgage rises at the same time even if they feel charitable.

The rising beef and sheep prices may be temporary as consumers will eventually look for alternative producers or category. With the rise in production and shipping costs, coupled with an anemic Kiwi dollar, the expected returns from farms may be over hyped. However, this narrative on higher returns may be a justification for lenders to raise rates on farm lending.

Interesting times.

by J.C. | 11th Oct 21, 4:52pm 1633924338

More upward rent revision may be on the table as it only make sense that landlords can't be absorbing both inflation rises and mortgage rises at the same time even if they feel charitable.

Don't think so. The hoi polloi can't afford it. Everytime rent goes up without a requisite increase in h'hold income, less is spent into the consumer economy, thereby putting increased pressure on the economy through decreased revenue into things like FMCG, CPG, and services.

by custard | 11th Oct 21, 4:52pm 1633924362

“Less is spent into the consumer economy”

And at that point the RBNZ frowns and responds by pulling the only rabbit it knows out of the hat – lowering the OCR yet again.

Then talks enthusiastically of the wealth effect from such move – get the economy/consumption going again apparently.

Asset prices rise – renters are pushed further into relative poverty.

Rinse / repeat.

by J.C. | 11th Oct 21, 5:57pm 1633928239

RBNZ is limited in its magic here. NZ has high-cost farm to fork. It cannot develop to a low-price retail sector because of scale, efficiencies, and capability. Europe, U.S., and Japan can and have done so.

by Casual Observer | 11th Oct 21, 4:50pm 1633924224

Some NZ ag exporters have globally impressive on time delivery results, which is part of why they are achieving the returns they are.. The long standing Kotahi logistic partnership has been one of the shining stars through covid. Interesting to hear some banks are now funding up to 60% on some farms. Farms seem to back in 'fashion' for banks.

by J.C. | 11th Oct 21, 4:53pm 1633924400

Not sure if this is satire or not.

by Audaxes | 11th Oct 21, 4:17pm 1633922269

Until This Changes, Forget Inflation: Banks Bought Epic Amounts of Safe, Liquid Assets in H1 ’21

by theoutlawtorn | 11th Oct 21, 4:46pm 1633923967

"The comment section on this story is closed. "

WTF is this? We're not being censored on this site too are we?

by lowercase capitalist | 11th Oct 21, 4:48pm 1633924094

Do you reckon that a lot of constructive commentary happens in the comments of these covid updates?

by theoutlawtorn | 11th Oct 21, 4:49pm 1633924190

I believe in the right for people to express their opinion freely.

by Squishy | 11th Oct 21, 4:53pm 1633924385

It just became a cycle of the same people posting the same tripe. I don't blame them.

by Casual Observer | 11th Oct 21, 5:00pm 1633924814

Stuff seem to have a similar policy on govt announcements, not opinion pieces. Perhaps the order has come down from on high?

by lowercase capitalist | 11th Oct 21, 5:11pm 1633925512

"Cindy bad. End lockdown now."

"Vaccine good. Antivaxxers dying is natural selection."

Theres 90% of the commentary for you.

by Noncents | 11th Oct 21, 6:17pm 1633929453

You forgot "Rights are being stripped"

E.g. "Mandatory" vaccines, excluding people who aren't vaccinated, and treating people who don't disclose as unvaccinated.

Given the state of our health and education sector, can we actually afford to lose even one unvaccinated teacher/nurse?

by pacifica | 12th Oct 21, 3:28pm 1634005711

People have a right to be safe from undue harm and work safety guidelines tend to get in the way when very real threat of death to customers, very highly vulnerable clients and staff is on the line. Very very few people have allergic reactions or medical reasons to not be vaccinated and there are legal exclusions for them.

by Casual Observer | 11th Oct 21, 5:11pm 1633925486

by northman46 | 11th Oct 21, 5:05pm 1633925107

You're free to make our own site?

by Albert2020 | 11th Oct 21, 5:51pm 1633927871

At the end of the day this is a financial website not a place to spread misinformation. You have Facebook for that. Good on the editors I say.

by Waikatohome | 11th Oct 21, 9:10pm 1633939804

For the good of your family, the economy and the country, get vaccinated. But it should be down to free will. I am not comfortable with compulsory medication. I am strongly pro-vaccine but I will not be falling out with my vaccine hesitant friends, I respect their right to make their own choices I life.

by northman46 | 11th Oct 21, 8:37pm 1633937834

Sure, but that doesn’t mean Interest owes anyone the right to post whatever word vomit they spew out. Their job is reporting financial news, not moderating the same debate every single day.

by pacifica | 12th Oct 21, 3:23pm 1634005438

Likewise terrorists have never been granted rights to post threatening and harmful media to other people online because it breaches the rights of others first and foremost. Freedom to do anything is generally what people who like to physically harm others without repercussions want. Don't be surprised if Facebook also kicks you off for breaching their rules because that is capitalism for you. You have never, ever been granted rights to post what you want on a company message board. After all it is the company's message board, not your personal message board.

You are not being censored when you are completely free to have your own website, you are not being censored when you are completely free to say what you want in public, (except the public is also meant to be safe from racist, discriminatory and threatening communications e.g. from stalkers, those with harmful intent, terrorists etc), but on a company message board the company is completely free to say they do not like you or what you are posting as it can breach the company rules. You are completely free to dispute with a company directly about this but don't expect the HRC to care one bit if they cut comments to prevent antivax misinformation being published.

by paashaas | 11th Oct 21, 8:08pm 1633936097

Jenee's career plan is to follow Alex Tarrant , in the usual interest.co.nz fashion .. so no surprise she would do nothing that might upset the Labs.

by pacifica | 12th Oct 21, 3:32pm 1634005967

No that is not censoring. Please get educated about laws relating to company websites and online information. If you need an active example of censoring check over the great firewall of China.

by Squishy | 11th Oct 21, 4:48pm 1633924093

So far the New Zealand vaccination effort is faltering...

Judging by what government where saying today I don't think it'll make any difference. Get out of Auckland (or and current/future control zone), go to Europe or the US for a few months where life is moving onwards from the pandemic.

I hate to say the "They are taking our freedoms and won't return them" people seem to be being proven correct, New Zealand is absolutely grinding to a halt now. At this rate lockdowns could go on for a very long time.

by donny11 | 11th Oct 21, 5:42pm 1633927371

Yup if you are between 18-25, you should book a one way ticket out of this kindergarten country. The world is back open go & enjoy it.

by Becnz | 11th Oct 21, 5:50pm 1633927803

I would love to go to europe for 6months to escape our current non leadership but we have no firm date on when MIQ will be finished for fully vaccinated Kiwis to return home.

We are going to be the laughing stock of the world with how this is now being handled.

We need clear dates now on when we will open so we can move forward.

At the moment the only people that seem to moving forward are gangs and prostitutes.

What is the point of vaccinations if we never open up.

by Gummy Bear Hero | 12th Oct 21, 7:20am 1633976425

... a study in Sweden showed that offering just 200 kronor ( $NZ 33 ) was enough to increase uptake of vaccination by 4 % ...

Imagine if we were offered $ 200 as a bribe ... the 90 % target would be gone by lunchtime ....

... we'd all be out & about , recycling that $ 200 into the local economy....

by pacifica | 12th Oct 21, 4:03pm 1634007787

Stats do show poor people are more likely to spend any windfall on basic necessities which improves the consumer market whereas the more wealthy would likely hoard it and not need to spend the money on necessities. Hence offers of windfalls to the greater proportion of poor people would have a beneficial effect for local businesses (including necessary medical companies). Unfortunately with the NZ housing crisis any small windfalls are more likely consumed by rent increases and benefits to housing investors. That $200 might only help make up for a $5 increase in rent per week. Most rents have been going up by tens times that.

by Mark L | 11th Oct 21, 4:54pm 1633924463

Kiwibank upped it's 3 month noticesaver to 1.25% as of today.

by Retail shop | 11th Oct 21, 6:57pm 1633931854

Kiwibank Limited (Kiwibank) is considering making an offer of up to $250 million of perpetual preference shares. First reset date 5 years. Looking like rate will be around 4 percent. They must be expecting rates to be higher than 4 percent over this period.

by Brutus Iscariot | 11th Oct 21, 4:56pm 1633924585

Classic Sam Stubbs. Posturing in the media complaining about banks increasing interest rates, 2 days later he jacks up his own.

by J.C. | 11th Oct 21, 4:58pm 1633924726

Does a lot of pimping of his own self interests in the media does our Sam. Wasn't he pushing the My Food Bag IPO?

by frazz | 11th Oct 21, 5:36pm 1633926961

Sam Stubbs on BTC

"But under no circumstances treat cryptocurrencies as an investment. They are simply not."

by Gummy Bear Hero | 12th Oct 21, 7:25am 1633976730

... there was a regular comedy slot on BBC Radio in the 1950's called the " Goon Show " .... a favourite catchphrase at the end was ... " it's all in the mind , you know " ....

That sums up Craptocurrencies , a goon show , it's all in the mind ... it's gonna end ...

by J.C. | 11th Oct 21, 4:57pm 1633924648

Ol' Ratty (Bitcoin) on the charge today. At NZD85K, it's charging beyond the annual median salary pa.

by HouseMouse | 11th Oct 21, 5:09pm 1633925385

Is anyone surprised our vaccination rates are faltering? I'm not, and have said so for weeks.

It's a pipe dream to get to 90%, they've got an outside chance if they offer cash incentives, but doesn't seem like they will.

There's going to be a good 10-15% of the population who fundamentally are anti-vax.

by Carlos67 | 11th Oct 21, 6:04pm 1633928678

Yep we will be lucky to get to 85% double vaxed. We could get to 90% if the government offered big cash incentives to the balance.

It must now be mandatory for prostitutes to get vaxed, cannot remember are they in the health sector or the education sector or both ?

by pacifica | 12th Oct 21, 3:55pm 1634007326

The WHO and other orgs highlighted it as one of the high priority health issues of our times. Unsurprising then that where NZs education is heading downhill, (with lower performance and clear discrimination leading to some groups with less than 60% of teens in education), and medical science is discouraged in public discourse, (instead promoting alternative and homeopathic remedies) we have growing antivax sentiment. The higher the populace is susceptible to fraud the higher the rates of antivax sentiment and unfortunately NZ has not been well educated in STEM subjects even at the best of times in the best of schools. She'll be right attitudes may protect those with enough wealth and luck in health but in NZ there is very little personal wealth across 90% of the country and we are among the worst for asthma, leaky mouldy buildings, autoimmune and severe health conditions making us very high risk (that is considering those issues people did not have choice over, let alone what people can do around their health). Especially when too many households don't have enough savings for a couple months out of work or even going to a doctor. It is concerning that the govt (and many before them from both sides of a red-blue divide) did not consider the knock on effects for their approaches to housing, health, and education even now. They are even making it far worse with the open door policies to immigration without solving the severe crisis and lack of access to basic living necessities. At best NZ is not a place for a healthy populace, we do however have a market for speculation in housing with a eternal supply of tenants from overseas looking for free healthcare, even with the dropping standards.

by HouseMouse | 11th Oct 21, 6:20pm 1633929642

What with the one-two punch of housing absurdity + covid, it's quite the dystopia playing out before our very eyes, isn't it.

Throw in the apparent limelight of gangs, whores and end of day preachers.

by MortgageBelt | 11th Oct 21, 6:40pm 1633930851

Interesting how Sydney was disparaged and criticised by the media for COVID management and numbers of cases - as if out of control.

Now NSW is pressing on with businesses open and getting on with life.

How on earth are the media and public going to cope with the soon-coming news of 60 cases in every NZ city every day? They will be stampeding in panic and shutting everything down.

by HouseMouse | 11th Oct 21, 6:47pm 1633931253

The epidemiologists will be biting their nails and fretting.

by JimboJones | 11th Oct 21, 9:14pm 1633940085

I think they are all nuts. You would think they should have a pretty solid understanding of statistics but they never seem to say anything other than Covid is bad and we must lockdown forever, despite the fact other countries seem to be doing ok with the vaccination rates we are approaching. Almost all covid deaths occur in old people, most of those are vaccinated. We aren’t letting our kids go back to school even though only 25 people under 18 have died of Covid in the UK, a country more than 10x our population that was ravaged by Covid.

by HouseMouse | 11th Oct 21, 10:26pm 1633944365

I agree. I think their positions tend to be so jaundiced.

by Nifty1 | 11th Oct 21, 7:08pm 1633932534

Why are people still rushing to buy realestate in Auckland? Is it desirable to be locked up...

by MortgageBelt | 11th Oct 21, 7:19pm 1633933147

When all else fails .... property remains.

In Property we trust.

WFH, locked down at home - you can still enjoy your garden, deck, lounge, etc. So may as well buy or upgrade to nice surroundings.

by Nifty1 | 11th Oct 21, 7:25pm 1633933540

you can still enjoy your garden, deck, lounge, etc

What you listed would be 1.4 million, if you're lucky...

by MortgageBelt | 11th Oct 21, 7:34pm 1633934071

1 million is the new $400k

So, yes.

by HouseMouse | 11th Oct 21, 8:04pm 1633935880

Does anyone know what the maximum penalty for the idiotic whore rampaging through Northland is?

by MortgageBelt | 11th Oct 21, 8:13pm 1633936384

Protection for this representative.

Public pillory for the Wanaka couple.

by Lapun | 11th Oct 21, 8:14pm 1633936482

She risks damaging the reputation of her profession.

by Brock Landers | 11th Oct 21, 9:18pm 1633940323

The Queen of Empathy never lies.

https://www.newshub.co.nz/home/politics/2020/09/coronavirus-jacinda-ard…

Aroha suckers.

by Fluffybunny | 11th Oct 21, 9:27pm 1633940876

I know all that selling rainbows and not following through is something that all political bodies get up to.

But this current lot really are kicking it up a gear.

If they were half as good at managing policy as well as they manage the media, we'd probably have got the vaccines 3 months earlier.

I don't understand why she gets such a free pass in the press.

by HouseMouse | 11th Oct 21, 10:31pm 1633944709

Isn't Jessica the partner of Ardern's bodyguard? nice and cosy, nudge nudge wink wink.

And Tova is one of her woke mates too.

by chebbo | 11th Oct 21, 9:41pm 1633941697

It's more likely for something to happen if Jacinda Ardern says it won't, than if Scott Morrison says it will.

by jerry_NZ | 11th Oct 21, 11:23pm 1633947826

Did you see that comments are now closed - this is how censor works!

What we are experiencing now is exactly how communism works. Limit the freedom (lockdown), break the individuals (in lockdown, more lockdown), put conflict in place (vaccinated vs unvaccinated, MOBs etc), laugh out and ignore anyone who is uncomfortable, repeat the same message again, ang again and again - lie that is repeated 100 times is becoming the truth (as per on famous general). They you apply force and just TELL what to do.

WAKE UP NEW ZELAND!

by Zack Brando | 11th Oct 21, 11:55pm 1633949720

We are an apocryphal bunch at times.

Let them have a brake from our musings - we may have temporarily.. psychologically.. broken them. I may not have been the most helpful myself.

by Gummy Bear Hero | 12th Oct 21, 7:29am 1633976983

The Canterbury Show is cancelled , again .... Geraldine street fair cancelled .... Chch leg of the world Sail GP lost .... NZ tennis open cancelled ....

.. what's left for Christmas ? .... travel throughout our own country still gonna be an option ? ... Jacinda ... Chris .... Andrew ... anyone ???

by Casual Observer | 12th Oct 21, 9:45am 1633985130

Looks like 'The Mother of All Protests' is still going ahead on 21 Nov GBH https://groundswellnz.co.nz/events/

by pacifica | 12th Oct 21, 3:25pm 1634005508

Er no. That is actually capitalism for you. You are completely free to set up your own site and write whatever you want there but like other online organizations businesses can be held responsible if commenters and posters submit illegal comments or that which breaches NZ laws. You are not being censored when you are completely free to have your own website, you are not being censored when you are completely free to say what you want in public, (except the public is also meant to be safe from racist, discriminatory and threatening communications e.g. from stalkers, those with harmful intent, terrorists etc), but on a company message board the company is completely free to say they do not like you or what you are posting as it can breach the company rules. You are completely free to dispute with a company directly about this but don't expect the HRC to care one bit if they cut comments to prevent antivax misinformation being published. This is a financial website though and realize with capitalism it is company who decides, not you. If you don't like it then set up a competing site. You are free to do so.

Don't be surprised if Facebook also kicks you off for breaching their rules because that is capitalism for you. You have never, ever been granted rights to post what you want on a company message board. After all it is the Facebook's message board, not your personal message board.