What happened Thursday
A review of things you need to know before you sign off on Thursday; tough for FHBs but they borrow anyway, fraudsters jailed, NZGB tender 880 delayed, long swaps jump, NZD lower, & more The Bank of China has raised fixed rates by +10 bps for terms 2 years and longer, and Unity Money is the latest to raise key TD rates to 6% of more. Home loan affordability reports show that first home buyers have been poorly served by both Labour and National-led governments over the past 12 years, and two Auckland men were sentenced to between two and four years imprisonment for mortgage fraud. Exports are rising again, up +4.3% in September from the same month a year ago, and exports to the US are up +13.0%. Japan's pivot away from China seems to be paying off, with new home prices falling their most in almost a year in September. Australia reported its monthly September labour market data today. Hong Kong has opened down -1.1%.
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Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
Bank of China has raised fixed rates by +10 bps for terms 2 years and longer.
TERM DEPOSIT/SAVINGS RATE CHANGES
Unity Money is the latest to raise key TD rates to 6% of more.
FHBs ENDURE
Home loan affordability reports show first home buyers have been poorly served by both Labour and National-led governments over the past 12 years. Of the 28 urban areas we monitor, first home buyers can now only buy in five of them where they spend less than 40% of their take-home pay on the mortgage payment if you only have a 10% deposit. Two are in the South Island, three in the North Island. It is seventeen centers if you have a 20% deposit. Despite all those headwinds and obstacles, FHBs still managed to win a quarter of all new lending. And since the RBNZ started reporting this share in 2014, that is near a record high.
FRAUDSTERS JAILED
Two Auckland men, Bryan Martin and Joshua Grant were sentenced to between two and four years imprisonment for mortgage fraud. Earlier their partners were sentenced to home detention for their part in the fraud, some of it quite active. $8.7 mln was involved.
NZGB TENDER DELAYED
We were expecting to report the $500 mln NZGB tender #880 results today, but they seem to be delayed. We will update this item when the results are known. Treasury advised this tender has been postponed due to technical difficulties within the YieldBroker tendering system.
WHERE THE RETAIL CUTBACKS ARE
ANZ reported its card tracking shows small gains in consumer spending in September. Tourism is a bright spot. But for consumers spending on clothing is lower than a year ago despite inflation rising +4.4% for that category. Spending on business goods and services is the other area keeping the overall levels up, especially "utilities and repairs".
JAPAN EXPORTS RISE
Japan's pivot away from China seems to be paying off. Exports are rising again, up +4.3% in September from the same month a year ago. This was underpinned by a +13.0% jump in exports to the US.
CHINA HOUSING WOES SPREAD
In China, new home prices fell their most in almost a year in September. This undermines the idea that Beijing is on top of their property crisis. For new homes they fell in 45 of the top 70 cities. For resales they fell in 67 of the 70 on a year-on-year basis. It was similar for both sectors of their housing market on a month-on-month basis. Both are worse than for August.
AUSSIE JOBS BRITTLE
Australia reported its monthly September labour market data today. (We have to wait until Wednesday November 1 to get our quarterly update, another key piece of public policy data that is released much later in New Zealand than elsewhere. The US managed to report their monthly September labour market data on October 7 !). Things were little-changed in Australia with their jobless rate at 3.6% but the twist was to much more part-time work. There were +58,200 part time jobs added in September, and -23,300 full time jobs lost in the month.
SWAPS UP
Wholesale swap rates have probably risen again today on the back of some more big moves in benchmark bond rates globally. But the real reaction will come at the close. Our chart will record the final positions. The two year rate may be little-changed but longer rates will be. The 90 day bank bill rate is unchanged at 5.66% and now only +16 bps above the OCR. The Australian 10 year bond yield is back up +11 bps from this time yesterday to 4.77%. The China 10 year bond rate is up +1 bp at 2.74%. The NZ Government 10 year bond rate is up +11 bps to 5.67% from yesterday, but still above the earlier RBNZ fixing of 5.55% which was up only +6 bps today. The UST 10 year yield is up another +11 bps from this time yesterday at 4.95%. Generally rates inversions are unwinding.
EQUITIES ALL DIVE
The NZX50 is down -0.8% in late trade today. The ASX200 is down a sharper -1.2% in afternoon trade. Tokyo has opened down -1.3%. Hong Kong has opened down -1.9% and Shanghai has opened down -0.9%. Wall Street closed down -1.3% on the S&P500 in Wednesday trade earlier today.
GOLD RISES FURTHER
In early Asian trade, gold is now at US$1949/oz and up +US$9 from this time yesterday. Earlier in New York it closed at US$1947/oz, and earlier still in London ir closed at US$1956/oz.
NZD WEAKER AGAIN
The Kiwi dollar has slipped -40 bps since this time yesterday and now at 58.5 USc. Against the Aussie we are unchanged at 92.6 AUc. Against the euro we are softisg at just on 55.5 euro cents. That means the TWI-5 is down another -30 bps at just on 68.7. Commodity currencies are out of favour when risk is 'off'.
BITCOIN RANGEBOUND
The bitcoin price is firmer again today, now at US$28,413 and up just +0.02% from where we were at this time yesterday. And volatility over the past 24 hours has been modest at just over +/- 1.4%. By being on the sidelines, this crypto is not acting as a safe haven.
This soil moisture chart is animated here.
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