A review of things you need to know before you go home Friday; small TD reductions, retail spending weak, SI hospitality strong; dairy prices soft, linkers dip, big new Māori fund, swaps stable, NZD soft

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

MORTGAGE RATE CHANGES
No changes reported today.

DEPOSIT RATE CHANGES
The Co-operative Bank cut -10 bps from their nine month TD taking it to 3.45%. RaboDirect has reduced its 90 day term deposit rate to 3.00%, also a -10 bps reduction.

WE ARE SPENDING MORE EATING OUT
Retail spending using electronic cards was $5.2 bln in October 2017, up +$63 mln or just +1.2% from October 2016. In fact, if it wasn’t for a good rises in supermarkets (consumables), eating out (hospitality) and what we spend on cars, retail sales would have declined. Spending on ‘durables’ was down -2.4% year-on-year, ‘apparel’ down -4.5%, and petrol (‘fuel’) was down -4.1%. See here.

STRONG IN THE SOUTH
South Island hotels and backpackers had a busy September, while North Island guest nights dipped, Stats NZ said today. Total New Zealand guest nights for September 2017 rose 1.4 percent on September 2016. The overall occupancy rate was 38.5%, the highest ever for a September.

NOT HOLDING
Confirming the dairy auction trend, the latest USDA price monitoring in Oceania shows price softness for milk powders, both WMP and SMP. In US dollars, WMP prices are now at their lowest of 2017, according to this USDA report. And today, the dairy derivatives market isn’t positive either.

HIGH DEMAND, LOW YIELD
Their has been a very positive (from Treasury’s point of view) tender of NZGB linkers (inflation indexed bonds). $100 mln were offered and these attracted bids worth $301 mln. That demand drove down the yield to 2.22% for these September 2040 bonds (plus inflation, of course). That is a yield drop from 2.39% in September, and 2.42% in August, so quite a shift lower.

PLATINUM WOES
The gold price may not be moving, but the platinum price certainly is all of a sudden. Take a look at the recent movements in our charts, here. The jump is pronounced, probably caused by a major South African miner shutting some production and exacerbated by labour strife as a consequence. Platinum prices have been falling faster than gold prices for quite some time and certainly since 2011, and miners are caught in a cost vice.

KIWISAVER UPDATES
For those who use our regular savings KiwiSaver analysis, we have updated the returns to October. We won’t we publishing an overview series this month, but our resources are all up-to-date with the latest returns.

FACIAL RECOGNITION
ANZ New Zealand customers are now able to log in to their goMoney app using the iPhone X’s Face ID technology. The bank is the first in New Zealand to be compatible with Apple’s facial recognition technology.

MORE MULTILATERAL TRADE DEALS
Prime Minister Ardern, Winston Peters and David Parker are all in Vietnam for APEC. On the sidelines, Japan and Australia are pushing to get the TPP-11 over the line and New Zealand will probably sign-up with few if any changes from what the previous Government negotiated. As Helen Clark has said, it’s a no-brainer. Now it has been announced that Damien O’Connor, an associate Minister for trade, is travelling to Manila to attend the Chinese-led effort to construct a parallel pact, the RCEP (Regional Comprehensive Economic Partnership). China of course is not in the TPPA (and nor will be the US). The RCEP includes India as well as China, but also sans the USA. New Zealand hosted a RCEP negotiating round in Auckland in June 2016. The difference between the two initiatives is that the TPPA includes high standard labour and environmental clauses; China’s RCEP doesn’t.

BIG NEW INVESTMENT FUND
Indicative commitments of up to $100 mln have been made by iwi, pan-tribal organisations, Māori land trusts and Māori incorporations to a proposed Iwi/Māori Direct Investment Fund. The Fund will help the Māori groups further diversify their portfolios and access larger scale direct investment opportunities than they can achieve on an individual basis. It will see the groups pooling capital for collective investments.

WHOLESALE RATES UNCHANGED
Swap rates are largely unchanged today after yesterday’s sharp jump. The 90 day bank bill rate is also unchanged at 1.94%.

NZ DOLLAR SOFT, BITCOIN UNCHANGED
The NZ dollar is softer at 69.2 USc. On the cross rates we are also softer at 90.2 AUc and at 59.5 euro cents. The TWI-5 is now down at 72.5. The bitcoin price is at US$7,424, a slip of -1% from this time yesterday.

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