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%.
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60 Comments
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…
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.
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.
“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.
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.
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.
Not sure if this is satire or not.
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?
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.
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.
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.
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.
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.
... 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....
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.
... 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 ...
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.
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 ?
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.
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.
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.
The Queen of Empathy never lies.
https://www.newshub.co.nz/home/politics/2020/09/coronavirus-jacinda-ard…
Aroha suckers.
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.
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!
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 ???
Looks like 'The Mother of All Protests' is still going ahead on 21 Nov GBH https://groundswellnz.co.nz/events/
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.
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