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A review of things you need to know before you go home on Monday; some minor rate changes, PSI holds lower, Fletchers pulls back on S&T, Fitch sees bigger deficit, phishing risk, swaps fall, NZD holds

A review of things you need to know before you go home on Monday; some minor rate changes, PSI holds lower, Fletchers pulls back on S&T, Fitch sees bigger deficit, phishing risk, swaps fall, NZD holds

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

MORTGAGE RATE CHANGES
The Police Credit Union has reduced it 1yr fixed rate by -20 bps to 4.39%.

TERM DEPOSIT RATE CHANGES
The Police Credit Union has reduce three selected TD rates by between -5 and -20 bps

EXPANDING, BUT SLOWER
The service sector’s rate of expansion has definitely slowed over the last six months or so according to the BusinessNZ PSI. It recorded a minor uptick in September interrupting a longer trend of slowing expansion - but the sector is still expanding at a reasonably healthy pace, just not as fast as it had been,

LEAVING THEM HANGING
Fletcher Building has withdrawn its proposal to acquire Steel & Tube due to lack of support from Steel & Tube’s Board to progress the plan. This comes after Fletcher raised its bid from $1.70 to $1.90/share this morning. FBU shares are down -1.3%, STU share haven't traded today after finishing Friday at $1.50.

WORSENING C/A DEFICIT
Ratings agency Fitch has significantly raised its estimate of near term current account deficits, but seem them easing further out. They forecast it to come in at -3.0% of GDP in 2018 and -2.5% in 2019. They had previously expected a sizable improvement from 2017.

PHISHING RISK
A phishing campaign containing malware is specifically targeting business customers of some New Zealand banks. The phishing emails are branded to look like invoice notifications from common accounting software. Once a user clicks on the attachments or links in the email, malware is downloaded onto the user’s machine. Banks have been notifying their business customers if they are affected. The malware is on the infected computer. The bank’s and the accounting software’s security is unaffected.

DOWN AGAIN
The equities slump has resumed today, but not in China. The Shanghai stock exchange has opened only marginally lower today in early trading. In Tokyo however, they opened earlier and have fallen -1.3% in early trade. The ASX is down -1% to a six month low. The NZX50 is level-pegging.

SWAP RATES DROP
Swap rates are down -2 bps for duration to 4 years and -3 bps for longer. The UST 10yr is lower in off-market trading and now at 3.14%. The UST 2-10 curve has slipped under +30 bps. The Aussie Govt 10yr is at 2.70% (down -5 bps), the China Govt 10yr is at 3.62% (unchanged), while the NZ Govt 10 yr is at 2.67%, also unchanged. The 90 day bank bill rate is unchanged at 1.89%.

BITCOIN UNCHANGED
The bitcoin price is basically unchanged at US$6,245.

NZD STABLE
The NZD is unchanged its opening this morning at 65 USc. On the cross rates we also unchanged at 91.6 AUc, and 56.3 euro cents. The TWI-5 is at 69.1.

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End of day UTC
Source: CoinDesk

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19 Comments

Exit polls suggest Merkel's Bavarian allies may have taken a hit

https://www.telegraph.co.uk/news/2018/10/14/angela-merkels-bavarian-all…

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Fears that the Saudi's could attempt to push oil price over $100 per barrel

https://www.telegraph.co.uk/business/2018/10/14/fears-saudis-could-try-…

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Nic that paper is dodgy, almost as bad as the others.

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I don't disagree but it is useful to get news from a broad range of sources. The Tory-graph is particularly useful if you are playing games in the FTSE.

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Taleb has been on great form today

"A Yuuuge agency problem in journalism: they care abt journalists far more than other pple.

+ Saudi Barbaria does Sept 11, blows up & ethnically cleanses Syria, Salafizes countries, wrecks Yemen. Nobody cares.

+ Saudi Barbaria suspected of killing one journalist, total deluge.
...and said journalist is a Muslim Brotherhood activist, in favor of the ethnic cleansing of Syria, the Yemen war, & other Jihadisms.

His falling out w/the Clown Prince of Saudi Barbaria (a.k.a MBS) is infighting similar to the Castellammarese War betw. mafia families.

Gabish?

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You can bet your bottom dollar that the CIA is up to its neck in this one.

A tentative idea here is that Khashoggi, in his close dealings with Prince Turki over the years, may have gleaned highly sensitive inside information on what actually happened on 9/11. Were the Arab hijackers mere patsies used by the American CIA to facilitate an event which has since been used by American military planners to launch a global “war on terror” as a cover for illegal wars overseas? There is a huge body of evidence that the 9/11 attacks were indeed a “false flag” event orchestrated by the US deep state as a pretext for its imperialist rampages.

https://www.zerohedge.com/news/2018-10-14/did-saudis-cia-fear-khashoggi…

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Seems unlikely. Why such a weird abduction/murder? Is it like Putin's Novichok a public announcement designed to terrify potential whistleblowers? Just don't believe any secret can be kept in the USA. Well except for Elvis who is alive and well living in Glenfield.

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On a mission – the CPI focus and the House Rental component.

Roughly 35% households nationally rent – taking a stab at 50% in Auckland these days?

House Rental component of CPI = 10% approx.

I would suggest the rental component of those renting would take up on average at least 40% of take home – but guessing?

If I'm close, the current CPI for a large percentage of households then bears little relationship to actual expenditure.

No new electronics every week and no overseas trips every week – just petrol, food and rent.

If I’m right – then this is not a good thing.

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I understand, but the CPI has little to do with a representative h'hold, despite what the media, govt, and schools say. I don't believe there is any cost of living index in NZ that is focused primarily on price increases for households.

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Custard CPi rentals like you suggest around 10 percent of the CPI basket (9.28 percent ) up from 6.8 percent in 2007. http://archive.stats.govt.nz/datavisualisation/cpi.html?url=/datavisual…. Great chart s from Stats NZ. Another remarkable chart are Interests monthly rental tenancies. Remarkable that as home ownership continues to collapse with a surge in investor buying , new tenancies lodged have been on a steady decline throughout this decade. Simply put people want to stay in rentals longer, or they cannot ( or maybe do not ) escape due to financial limits and have no alternative

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Custard, I think you're about spot on, which is why I made my comment earlier about RPI (Rich Person's Inflation Index) and PPI (Poor Persons Inflation Index).

The measures are all set to the property owning class and mortgage free retirees. It's a false basket of goods engineered to suit the older demographic. No wonder we lose so many of our productive 20-40 year olds to the rest of the world..

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An Irishman, an Italian, and an Iowan are arguing about which bar is the world’s best. “The best bar in the world is Paddy’s Pub in County Cork,” says the Irishman. “After you’ve bought two drinks at Paddy’s, the house stands you to a third.” “That’s a good bar,” says the Italian, “but not as good as Antonio’s in Old Napoli. At Antonio’s, for every drink you buy the bartender buys you another.” “Now, those sound like mighty fine bars,” says the Iowan, “but the best bar in the world is Bob’s Bar and Grill in Des Moines. When you go into Bob’s you get three free drinks and then you get to go in the back room and get laid.” The Irishman and the Italian are astonished to hear this, but they are forced to admit that Bob’s Bar and Grill must indeed be the best bar in the world. Suddenly, however, the Italian gets suspicious. “Wait a minute,” he says to the Iowan. “Did that actually happen to you personally?” “Well, no, not to me personally,” admits the Iowan. “But it actually happened to my sister.”

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Very good.

I thought for a moment it would be a story of an Irishman, Italian, Spaniard, Greek, Portuguese, Latvian, Lithuanian and Cypriot who all went to drink at a German bar. Had a wonderful session, got thoroughly pissed and then ran off leaving the German to pay for it all..

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Westpac and ANZ both had their pants pulled down today.

Westpac shares falling 1.83% and ANZ 1.85%. Both are now sitting at 52 week lows. The market can make a mockery when the Emperor is wearing no clothes.

https://www.afr.com/markets/asx-hits-sixmonth-low-as-selloff-continues-…

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Shanghai SSE composite now down 1.5%. Could be another interesting week.

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Ok – supportive comments.

Thus my other takeaway – the loss of disposable income / purchasing power that the CPI / RBNZ are possibly not taking into account for a large number of households when it comes to general increases in the cost of living.

Ultimately I imagine retailers get hit – as in clothing, fast food and grocery items – the mall, and then service industries.

Do then taxpayers get hit – as in constantly rising accommodation supplements and general benefits etc.

Again, if I’m right – then this is not a good thing.

So why are we persisting with it.

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Custard. Unfortunately it's gone too far and hence here are the choices.

https://www.youtube.com/watch?v=e4PzpxOj5Cc

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There is no one you can vote for who will get rid of Working for Families and the Accommodation Supplement. Believe me, I tried (with John "communism by stealth!" Key). Both major parties ran the last election on increasing these subsidies.

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Sir John. Or is it Surgeon?... I'm not sure but either way, there are a lot of things that were butchered and then 'sold off' under his neglectful watch.

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