A review of things you need to know before you go home on Tuesday; no rate changes, fewer foreign buyers, housing costs stable, NAIT to be updated, sudden Aussie consent drop, swaps & NZD unchanged

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

MORTGAGE RATE CHANGES
No changes today.

TERM DEPOSIT RATE CHANGES
None here either.

BIG QUAKE
Wellington (an much of the middle of the country) was hit with a 6.2 earthquake today. Damage reports are still being brought together.

DATA FOR THE CULTURE WARS
Statistics NZ released its quarterly data on 'foreign buyer' activity for September, reconciled to all buyer activity. This continues to show very low national levels with only a new inner city neighborhoods with anything material. Overall, pure foreign buyer activity was 2.0% of all buying transactions. This is down from 2.8% in the June quarter, and is the lowest recorded since these records were first collated quarterly in December 2016. If you add in legal residents who aren't citizens, the rate rises by 8.4%, a level stable over the data series. And 10% are bought in corporate structures, also stable. Individuals buying as citizens is also stable at 79.4% and marginally higher than the same month a year ago. The levels are higher in some inner city suburbs in Auckland (of course). The same data was released for sellers.

A DECADE ON, NO CHANGE
Statistics NZ also released data on housing costs. They make the point that the overall share of household budgets being used for housing is virtually the same in 2018 as it was in 2008. In Auckland, there is no change, in Wellington, they report a solid improvement (that is, 2018 took less of household incomes for housing than 2008). In Canterbury it was a similar improvement. The places worse off were regional North Island, and regional South Island. The growth in incomes isn't evenly distributed however, and those on lower incomes found it much tougher than those on higher incomes (obviously). (Today's Statistics NZ data can be compared with our with our housing affordability data. In September 2008, Stats NZ household-income-for-housing was 16.0% whereas our household HLA level was 27.4%. In 2018, the Stats NZ ratio is 16.3% vs our HLA of 22.3%. A key difference is that Stats NZ uses gross before-tax incomes, whereas we use net after-tax take-home-pay. Income tax levels affect affordability. Adjusting for that difference, both series show stable or improved housing affordability between the two periods.)

UPDATING NAIT
MPI is moving to change the NAIT system, a flawed animal recording system that has frustrated farmers for years and which was shown to be deficient when it was really needed to track and control the m. bovis outbreak.

SUDDEN SWING NEGATIVE
In Australia, data out today revealed a sharp drop in building approvals in September. They are down -19% from the same month in 2017 with most of that decline in non-house dwellings (apartments, etc). Those were down a whopping -27%. This is even a more dramatic shift that that, because for the year to September, this data is actually up +3.3% - so the month-alone data is a major reversal. The industry is blaming access to financing as the core reason for the downturn, not consumer demand.

CONSEQUENCES
After yesterday's sharp fall, today the Shanghai stock exchange has opened just a little lower. But any looses now are building a bad momentum with most holders now sitting on major losses that will need to be brought to account at the end of the month. Beijing is pleading with banks not to enforce sales for indebted holders. The State is buying up distressed companies to save them from bankruptcy, although it would be wrong to suggest this was a major effort yet.

SWAP RATES LITTLE CHANGED
Swap rates are up +1 bp across the whole curve today. The UST 10yr yield is unchanged at 3.09%. The UST 2-10 curve is holding at +27 bps. Other benchmark bond rates are holding as well. The Aussie Govt 10yr is at 2.59% (unchanged from this morning), the China Govt 10yr is at 3.58% (up +3 bps), while the NZ Govt 10 yr is at 2.55% and unchanged. The 90 day bank bill rate is up +1 bp to 1.90%.

BITCOIN DIPS
The bitcoin price is now at US$6,288 and that is a decline of -2.1%, a rare movement. We haven't found any source that can explain why this sudden drop which happened about 12 hours ago.

NZD UNCHANGED
The NZD is also unchanged at 65.3 USc. On the cross rates we are marginally firmer at 92.3 AUc, and 57.4 euro cents. Against the GBP we are back up over 51p. That leaves the TWI-5 at just over 69.8.

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