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A review of things you need to know before you go home Wednesday; no rate changes, Truckometer on the up, LGFA stumbles, a China trade 'win', inflation murmurs, violence wanes, swaps and NZD stable

A review of things you need to know before you go home Wednesday; no rate changes, Truckometer on the up, LGFA stumbles, a China trade 'win', inflation murmurs, violence wanes, swaps and NZD stable

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

MORTGAGE RATE CHANGES
No changes reported today. 

DEPOSIT RATE CHANGES
None here either.

IGNORING DAIRY'S SLIPPAGE
Dairy prices slipped again at today's auction, the third time in a row. They are now down -6.8% over that period. But the NZD has had almost zero reaction to the news.

OVERCOMING POLITICAL UNCERTAINTY
Perhaps one reason the NZD is looking the other way is that the ANZ Truckometer data is back on the up. This data is a very good indicator of the health of our economy. ANZ says their Index suggests the economy may not have grown much at all in the September quarter, but the October data suggest a more positive start to the last quarter of the year . Analysis of the individual road movements shows that the October increase was driven by a strong jump in heavy traffic on key South Island roads. South Island traffic has been more volatile than its North Island counterpart in recent months as it has been more weather-affected.

POPULARITY DROP
There has been a surprise in the latest LGFA bond tender today; the $30 mln April 2025 portion only found buyers for $24 mln of it. All up, $130 mln was offered and only $124 mln was placed. Overall the weighted average yield accepted rose to 2.93% (2.79% last time) and the coverage ratio was down to 1.6x, down from 2.7x in the previous tender.

MORE OF LESS
New Zealand exports NZ$20 mln of fully processed natural casings to China each year. But we have been blocked from shipping semi-processed casings for some technical reasons. China has now released this block and another $100 mln in exports is expected as a result. But it does seem a little odd that the first trade arrangement announced by the new Government is to add less value rather than more. It is certainly more trade, but you have to wonder if the fully processed casing trade will revert to the semi-processed category in the future.

'MURMURINGS'
ANZ's independent inflation monitoring is giving some signals of rising inflation, although they call them 'murmurings'. Prices in their Gauge are up +2.7% year-on-year. The underlying ex-housing gauge increased only +1.0% on the same basis. That’s still low, but is the highest in three years. "We can see some inflation murmurings," they says, "but it’s patchy and hard to draw any firm conclusions."

LESS VIOLENCE
This is interesting because this data is probably quite different to "what you think". The rate of violence in Australia has fallen over the last decade, according to 2016 Personal Safety Survey figures released today by the Australian Bureau of Statistics. Results from the survey show a drop in the proportion of Australians responding they had experienced some form of violence in the past year, with rates declining from 8.3% in 2005 to 5.4% in 2016. The decline was driven by a decrease in the proportion of Australians experiencing physical violence, from 7.5% in 2005 to 4.5% in 2016. For men, the proportion that responded they had experienced physical violence in the past year has almost halved, decreasing from 10% in 2005 to 5.4% in 2016. Women’s experiences have also decreased over the same period from 4.7% to 3.5%. The survey sample size was 21,242. Violence is defined as any incident involving the occurrence, attempt or threat of either physical or sexual assault experienced by a person since the age of 15. I bet social media chatter has alternative 'facts' (and most people will believe them rather than this proper scientific survey). Making stuff up seems to win out these days, sadly.

WHOLESALE RATES STABLE
Swap rates are little changed today after yesterday's recovery. There is a hint of softness at both the short and long ends however. The 90 day bank bill rate is unchanged at 1.94%.

NZ DOLLAR STABLE, BITCOIN UP
The NZ dollar is also little changed and still at 69.1 USc. On the cross rates we are at 90.3 AUc and at 59.6 euro cents. The TWI-5 is at 72.5. The bitcoin price is at US$7,223 (NZ$10,450), a gain of +2.2% from this time yesterday.

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12 Comments

Says it all! That Michael West is still alive is the wonderous thing.....Maybe not living in Malta has helped....

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I heard on the radio today that 20% of rentals will be dumped on the market due to the incoming government changes. I might have heard that wrong but a rush of people trying to get out of rentals wouldn’t surprise me.

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Fascinating time. Just checked TradeMe - can't recall ever seeing almost 11,400 properties on sale in Auckland before.

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Wow really? That snuck up quickly!??

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Been moving up quickly since it became apparent Labour might form a government.

If investors panic and try to dump things will get real bad real quick. Which is why you see sprinklers on here saying “hold”, “hold”. And if I’m a bank I’m tightening my lending criteria.

I don’t predict a 40% drop - I’m more in the 10%-15% correction camp, but if I’m a bank, I want to be covered for a 40% scenario so I’m being very selective who I lend to.

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I think I recall reading it was much higher around 2008. Does anyone remember?

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Your recall is good. On this same day in 2008, the TradeMe platform listed 18,672 properties for sale in Auckland. (76 of which were mortgagee sales). The detail for some other centres are Waikato = 6,922, BOP = 3,631, Wellington = 4,194, Canterbury = 4,315, NZ nationally = 57,467.

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Thanks David, that is an impressive difference in numbers. Today we have 33,658 nationally which is around 23,000 fewer than in 2008.

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Here is some perpsective:

https://www.interest.co.nz/images/residential-property-listings.jpg

right up to today's data. (Same data on TradeMe is not available.)

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The number of houses consented nationally seems to loosely follow that same downwards trend as well.

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Transfer of wealth to tech. Within last decade - top five global companies are now tech companies. Market cap 30% higher and 45% fewer jobs.
https://twitter.com/DominicFrisby/status/927804838360035328

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