What happened on Monday | interest.co.nz


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

MORTGAGE RATE CHANGES
There have been fixed rate increases from Kiwibank and BNZ. But there has also been a set of fixed rate cuts from the TSB.

WE BEAT IT BY 0.05%
TSB no longer just matches Australia’s Big Four banks, it is offering to undermine them. “Bring us any fixed home loan rate currently advertised nationally by ASB, ANZ, BNZ or Westpac for the same term and terms of offer and we’ll beat it by 0.05%, under subject to the borrower meeting the TSB’s loan adequacy and affordability criteria. Offer only applies to the purchase, refinancing from another lender, or construction of (a) owner-occupied residential properties with a loan-to-value ratio (LVR) of less than 80% and (b ) residential investment properties with an LVR of less than 60%. Offer valid until November 30, 2021. “

CHANGES IN TERM DEPT RATES
None were announced today.

THE BEAST IS BACK (H / T JK)
CPI inflation climbed to 4.9% in a full year until September 2021. This is a peak in 10 years. But it’s probably worse than that according to Statistics New Zealand data released today, as price growth rose 2.2% in the September quarter alone, which was far higher than economists and the Reserve Bank have chosen.

IMPORT INFLATION
It should be noted in particular that the inflation of tradable goods is up + 5.7% over one year, up + 1.7% on a quarterly basis (therefore an annualized rate of + 6.8%!). It has been ten years since it was so high and thirteen years since tradable inflation has not exceeded non-tradable inflation by this amount. We have just ended a very long streak where imports have kept our headline inflation rate at bay. Now it’s the juice. Only a rapidly rising exchange rate can catch up with this, otherwise it will make the problem worse.

DIFFICULT INFLATION RESULTS TO SWALLOW
The RBNZ has delayed the publication of its sector factor model which is experiencing “technical difficulties”. (H / T NS)

BREEZE BUT NOT YET ON THE KNEES
The service sector continued to contract in September, according to the BNZ-BusinessNZ PSI. But that rose 11.5 points from dreadful August levels as the country moved to relaxed alert levels in September, freeing some businesses for increased activity. The main positive of these data is employment, which stands 52.0 above average against 49.3 in August. This seems consistent with the fact that companies expect activity to rebound once restrictions are relaxed, government budget support and a reluctance to lay off staff. It bodes well that official labor market statistics are holding up (perhaps very) well in the third quarter, even with a huge drop in GDP, according to BNZ.

NAME CHANGE
The official name of Asset Finance has been changed to Xceda Finance Limited, according to the records of the Companies Office. This reflects his Australian ancestry.

CAPITAL RISK
Kiwibank seeks $ 250 million through the show perpetual preferential shares. They will pay at least 2.5% above the 5-year swap rate, which is now up 2.21%. For them, they’re looking for preferred stocks that will earn more than 4.7% a year – for high-risk capital that could be used to bail it out if the bank stumbles.

SURPRISING POSITIVITY
New Zealand consumers Sentiment tracking reports some unexpected discoveries about personal savings. They say that “15% of New Zealanders had no savings, and 27% were worried about their level of savings and would like to have more.” This hardly sounds like news – surely everyone would like more savings. But what seems unexpected is that 58% of people (3 out of 5) responded to their survey saying that they are either “satisfied” with what they have (35%), “satisfied” with what they have. that they have (18%) or have “more than enough” (5%). In fact, almost half of them said they had saved 5% or more of their income in the past three months. Amid the uncertainties of a pandemic, these results appear remarkably optimistic. They clearly surprised Consumer NZ who instead opted for the negative section.

CHINA FAULT
In China, more signs of a more marked slowdown than expected. China’s economy grew at + 4.9% year-on-year in Q3 2021, and well below the growth of + 7.9% in Q2. It is also lower than market estimates of + 5.2%. This was the slowest pace of expansion since the third quarter of 2020 and is due to their electricity problems, widespread supply chain bottlenecks, a faltering real estate sector and persistent epidemics of Delta.

PANDEMIC UPDATE
In Australia Delta case in victoria have risen to 1,903 cases reported today, and more than expected. There are now 23,376 active cases in the state and there were six deaths yesterday. In NSW there was another 266 new community cases reported today with 4,490 active locally acquired cases, which is less, but they had 5 more deaths yesterday. Queensland is report zero new cases again. ACT has 17 new cases. Overall in Australia, over 68% of eligible Australians are fully vaccinated, and 17% have only had one injection so far. There was five new cases in New Zealand at the border, and 60 new community cases. Today, 84.9% of Kiwis aged 12 and over nationwide have had at least one vaccination, and the Australian rate is now 84.6% of all ages 16 and over.

GOLD MORE FIRM
At the start of Asian trading, gold is up + US $ 3 from where we opened this morning at US $ 1,770 / oz.

GENERALLY NEGATIVE ACTIONS
The NZX50 started in positive territory today but slipped just negative towards the end of the trading session. The ASX200 is up + 0.3% at the start of the afternoon. The very large Tokyo market opened the week down -0.3%. Hong Kong opened down -0.6% and Shanghai also opened down -0.6%. Despite the strong prospect of strong earnings reports, the S & P500 is down -0.1% ahead of the Wall Street opening.

BOND ON SWAP RATES & BONDS
We don’t have today’s one closing swap rate Again. They have probably increased sharply in all quarters. So far, the one-year swap is up +19 bps, the two-year swap is up +18 bps. We’ll update this if there are significantly different changes when the end-of-day data arrives. The 90-day bank note rate rose by +5 bps to 0.74%. The benchmark ten-year Australian government rate is now at 1.70% and up +4 basis points from where we opened this morning. The China Govt 10yr is now at 3.04% and up +4 bps as well. The 10-year New Zealand government rate is now at 2.31% and a massive +13 basis point increase from this morning. All this thanks to the CPI of course. And it is now well above the previous RBNZ fix for this rate at 2.25% (+7bp) as the trend is significantly higher. The ten-year US government is up +1 bp to 1.58% as of this time this morning.

CLOSE NZ DOLLAR
The Kiwi dollar is up +10 basis points to 70.8 USc from where we opened this morning. Against the Aussie, we go back to 95.4 AUc. Against the euro we are at 61.1 euro cents. The TWI-5 is now at 74.4 and well above the top of the 72-74 range we’ve been in for most of the past eleven months and is reaching its highest level in eight months.


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BITCOIN INCREASES
The price of bitcoin is now at US $ 62,375 and + 1.0% above where we opened today. Volatility over the past 24 hours has been moderated to just over +/- 2.9%.

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