Here's our summary of key economic events overnight that affect New Zealand with news both Turkey and bitcoin have taken a sharp re-rating lower today.
But first in the US, new jobless claims fell to 239,000 and the number of people on these claims is now 1,754,000 and back to pre-pandemic levels. These new levels are about what was expected.
The Philly Fed manufacturing survey reported buoyant conditions and continuing fast-rising cost and price rises. New order levels were strong.
The Kansas City Fed factory survey wasn't so upbeat, still growing but at a slower pace. However they too reported strong new orders, high cost and price increases and a very tight labour market.
All this American data is consistent with the Conference Board's leading index which rose sharply in October suggesting the current economic expansion will continue into 2022 and may even gain some momentum in the final months of this year.
The Canadian ADP payrolls report for October was stronger, and an improvement from September. But not every sector shared in the bounceback.
In Vancouver, panic buying has emptied stores in a city now cut off by debris on major highways and rail lines. The province's death toll of one is expected to climb. The military is due in the area soon to assist rescue efforts.
In China, infrastructure investment is very weak now, growing just +1% year on year in the first ten months of 2021. And it could slip further. And separate data confirms their birth rate is very low, and falling.
In Turkey, their central bank slashed its one-week repo auction rate by -100 bps to 15% during its November meeting, following a -200 bps cut in October and a -100 bps cut in September. The move was expected after Turkish President Erdogan, who backs an unconventional theory that high rates cause inflation, vowed to fight for lower rates as his country grapples with inflation at near 20%, well above the mid-point target of 5%. The Turkish currency is down almost -11% in November and may well fall further, adding to their inflation. Erdogan mimics Trumpish ignorance about how financial markets work and react. He will impoverish his country.
Shipping freight rates out of China are staying very high, according to this week's assessments. Some thought it might be reverting lower by now, but that hasn't happened yet. But the Baltic Dry index is one cost that is reverting lower.
The price of lithium just keeps on rising however.
In Australia Delta cases in Victoria have risen to 1006 cases reported there yesterday. There are now 13,814 active cases in the state and there were another 12 deaths. In NSW there were another 262 new community cases reported yesterday, another drop, with 2,894 active locally acquired cases, and they had 3 deaths. Queensland is reporting zero new cases again. The ACT has 25 new cases. Overall in Australia, just under 84% of eligible Aussies are fully vaccinated, plus 7% have now had one shot so far.
The UST 10yr yield opens today at 1.58% and -2 bps softer than this time yesterday. The US 2-10 rate curve starts today flatter at +108 bps. And their 1-5 curve is little-changed at +106 bps, while their 3m-10 year curve is a little flatter at +153 bps. The Australian Govt ten year benchmark rate is -2 bps lower at 1.81%. The China Govt ten year bond is unchanged at 2.94%. The New Zealand Govt ten year is -4 bps softer at 2.60%.
In equity markets, the S&P500 is up +0.2% on Wall Street in their afternoon Thursday session. Overnight, European markets were all down about -0.2% except London which fell another -0.5%. Yesterday the very large Tokyo market closed down -1.3%. Hong Kong closed down -0.5%, and Shanghai closed down -0.9%. The ASX200 ended with a minor +0.1% gain, but the NZX50 was down another -0.3%.
The price of gold will start today down -US$6 to US$1861/oz.
And oil prices are also a little softer at just under US$78/bbl in the US, while the international Brent price is now just on US$80/bbl.
But the Kiwi dollar opens today firmer at just on 70.3 USc. Against the Australian dollar we are another +½c firmer at 96.7 AUc, so up +1c in two days. Against the euro we are little-changed at 61.9 euro cents. That means our TWI-5 starts today at 74.8 and up +40 bps since this time yesterday.
New data shows that the Chinese yuan is making virtually no progress in being accepted in international payments. If garnered just a 1.22% share of all global payments in October, up from 1.08% two years ago. The big gainer is the euro at the expense of the US dollar, and not the yuan. The NZD is used in 0.38% of transactions, unchanged, which put the yuan in perspective.
The bitcoin price has fallen again since this time yesterday, down -4.8% to US$57,466. In NZ dollars that is a drop of more than -NZ$10,000 in a week. Volatility over the past 24 hours has been high at just over +/-3.2%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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92 Comments
Happy Friday everyone The question of the day is who will raise interest rates first today BNZ or ANZ and will the go higher than the 3.64 will we see a 3.7 number.
Meanwhile house listings are up 20% in a month on trade me and Wellington region has the highest number of listings on the market since 2018 led by Lower Hutt which at 380 listings is the highest in 5 years.
Speculating on interest move would be a potential conflict of interest for me so I won't touch that one.
However, I predict many comments of schadenfreude today from those who are desperate to see the property house of cards topple under the weight of rising rates, and a robust response from those declaring the house is in fact made of reinforced concrete.
Meanwhile, owner occupiers with family and a single property who are struggling their way through life will watch every quiver nervously, hoping someone will hand them another card to prop the roof up.
We are planning to sell something in the new year that we hung on to for an extra 17 months so far instead of selling mid 2020. Presumably there are others who did the same also and yes there could be a rush of listings but compare that to the current low level of listings. If it sells for a bit less we will not be crying, 'Twas a good decision indeed
Interest up or down ...many are predicting on housing market but reality is :
https://thekaka.substack.com/p/dawn-chorus-54mday-in-capital-gains?toke…
RBNZ uses data to suit their interest, ignoring facts as data can be twisted as always to cover and justify their action.
Looking for Fibbing from Mr Orr, next Wednesday.
As other countries go into new lock downs, NZ's Government loses control and succumbs to political pressure, easing our restrictions. The "be kind" mantra has failed as there were negligible penalties for not complying with the rules. So the majority suffer because a a few selfish individuals. Now Andrew Little admits that worst case scenarios indicate we could be seeing as many as 16000 positive cases a week. The economics of that will be significant.
And reports continue to come out about "long COVID". While this is being identified as being a minority, the issues including loss of smell, heart and lung issues can have a significant impact. Scientists are struggling to understand the mechanisms that cause these, but the blood clots COVID causes could be significant in this, particularly if some occur in the brain (I've only seen one report that indicates autopsies on COVID sufferers found them there). For those who claim COVID data means it is low risk, they may be right. But I suggest that they should consider whether that risk is worth it if they are one of the ones to have the worst impact, rather than assuming it won't affect them?
Life is risky. But dying, or suffering a debilitating after effect because of someone else's selfish stupidity should never be acceptable to anyone.
I am fascinated by those who dismiss these concerns, often using statistics, but apparently fervent in their belief that they will never be counted amongst those stats. I have observed a few caught out on the wrong side, and invariably their first question is "Why me?" Only one chap I knew was ever honest enough to say to me " I did this to myself. I was stupid, and should have known better. I'm only glad no one else was hurt" He earned a modicum of respect from me in that moment.
I heard a psychologist being interviewed the other day and he made a reference to 'binary bias', what I usually call 'extremism'. People tend to have a black/white perspective on things, and it looks like that is where you are going with this.
But yes, people who insisted on travelling for any reason in recent times for what ever reason, knew the risks, but as we see few were prepared for the consequences. Even the government.
This is life, risk management.
If you are so concerned about getting covid, then you could pack your bags and shift out into the country somewhere and organise click and collect. Otherwise you accept the risks and rewards of living in close contact with other people. Ultimately you decide what you do, and you have no right to tell others what to do with their life.
No, I will stop you infringing on my property. As you are again trying to force your actions on my property/personal belongings.
The point is, you should not force your opinions and actions on other peoples property or person, and they have the ability/right to defend their property and person.
But we do all the time don't we? We tell them how fast they are allowed to drive, which side of the road to drive on, when and where they can buy liquor, whether or not they can take drugs, if they can have a gun or not, that they have to pay for a bunch of things they want or need, and a whole lot of other things. Most of it driven by the threat of the consequences to other people, and the cost of those consequences. Why is this any different?
I can do any of those things, but still be personally responsible enough not to let any of that affect other people. But yea, shit happens and the point of those is to try and reduce the chances of shit happening.
That is why i did the risk reward analysis of not getting the vaccine and decided it was in MY BEST INTERSTS to get the vaccine for MY OWN SAELTY. But that does not mean I need to force other people to do something that they may not want to.
The whole thing is that it is a flue shot, it doesnt stop you getting it or transmitting it, so its not a be all and end all. If it was an actual vaccine that prevented contraction and spread, then that would make it more appealing.
It is no different, in all of those cases the government decide an allowed level of risk based on the views of the most voters. They could set the speed limit to 10km/hr and save almost all road deaths and injuries, but people are prepared to accept a few deaths to have the ability to get around quickly.
Exactly, so the question is - why wont people accept covid deaths?
Although, in saying that, there has been a definitive change in direction re the reporting of covid deaths. Gone are the days of the PM personally fronting and empathetically nodding and looking sad to each individual report.
Now it all about underlying conditions, relative age, and "with" not "of" featuring a lot more predominantly in the articles.
Anyone would think the media have been directed to do this to ensure we don't feel like covid is as scary and can now open up.
I'm sure that if Jacinda announced that a euthanasia jab was safe and effective there would be plenty from this site queueing up for the jab.
People are free to make personal decisions on their own health and should use their brains to make an informed decision.
And the consequences will be what they will be... there is no right or wrong
I 100% support an euthanasia jab, with decent checks and protections to make sure the elderly or sick aren't being coerced into getting it. But i you have a terminal illness that is reducing your quality of life then you should 100% have the rite to decide to end your own life with dignity and respect.
Do you mean this comment "Evidence of ADE has not emerged for COVID-19 vaccines even though concerns have been raised." from here -https://www.chop.edu/centers-programs/vaccine-education-center/vaccine-….
Try and look at ALL the information, not just that which supports your preconceived opinion.
Excellent... none emerged yet!
Sounds like its been thoroughly tested...
In that case, Booster up!
Talking of the Whole data Murray, you do realize that Dr Walensky director of the CDC is on record as saying the vaccines dont stop or prevent infection or spread....
True but demonstrates that these vaccines are ripe for creating ADE, there is no way of knowing how many have died from ADE events in vaccinated people at this point, could be none, could be plenty
"Since our data indicate that Delta variants are especially well recognized by infection enhancing antibodies targeting the NTD, the possibility of ADE should be further investigated as it may represent a potential risk for mass vaccination during the current Delta variant pandemic"
At this stage immunity to Covid 19 doesn't last, whether it be from natural infection or vaccination. That might change after the third shot, we'll have to wait and see.
Quite likely it will turn out we need annual boosters before winter, for society to function at all normally.
herd immunity no longer a goal
https://www.latimes.com/science/story/2021-11-12/cdc-shifts-pandemic-go…
are you sure its the unvaccinated at fault....
https://www.medrxiv.org/content/10.1101/2021.09.28.21264262v1.full-text
Yep enjoy the summer, because come winter 2022 we will be gearing up for the "pandemic of the unboosted" .
I'm hopeful that super treatments will have come online by then though, which might allow us to escape what's happening in the northern hemisphere at the moment.
Agree. Living on the SI, I was looking forward to getting out with friends, going to restaurants and hitting the road. I have been double-vaxed, but know that's not going to stop me getting or spreading covid.
The media keep showing hospitality or tourism operators saying we can't wait for Aucklanders to come down. Heard of fake news?
not only aucklanders jim boult wants australians back now , good luck SI covid will be there soon, i enjoyed last summer travelling the whole of the SI and not a worry about covid even when auckland went into lockdowns, as an aside i will be down there early next year and am double vaxed , bit surprised i wont have to take a test to go across on the ferry (at this stage)
I'm not sure that many countries are going back into strict lockdowns like our levels 3 and 4. They seem to be juggling restrictions, equivalent to changing levels in our incoming traffic lights system. eg places like Ireland and Denmark seem to be imposing restrictions such as earlier closing hours in bars etc, and restricting more venues to vaccinated only. No doubt we will see the same.
Countries will first turn to victimising the unvaccinated they will do this to primarily distract the population after all the best way to get unity in one group is to generate a group of others to hate.
There was a German politician of Austrian heritage who was absolutely renowned for this tactic.
Have no doubt about this what is being done now is to try and protect the status quo and the power and wealth of those that are in control.
But this will be just as cancerous on society as it has always been in the past, and the repercussions will echo forward into the future for generation or two at the least.
There is no legitimacy to what is being done this is pure evil.
https://www.stuff.co.nz/national/explained/125617215/hate-speech-laws-e…
I wonder if the unvaccinated will become a protected group?
yes there is but there is another drug thats only 5 cents a dose
https://www.youtube.com/watch?v=ufy2AweXRkc&t=161s
Does anything matters to people in power...be it inflation.....housing ponzi, as is now not is a problem for FHB but even those who want to rent as rent in Auckland has gone up from 10% to 25% ( A colleagues who was renting for $620 moved house and the same house was re rented for $785).
Government and RBNZ has created a situation in which many average families will struggle for the rest of their lives ( giving dole is not a solution but a tool used by Jacinda Arden - giving $20 extra is to silence ....possible ....)
RBNZ for once should think rationally and take bold move, may be stock market or housing market may react for a short term but if Mr Orr misses this opportunity for........
Below is happening even now, how long will they keep lying that is softening or.......
https://www.stuff.co.nz/life-style/homed/real-estate/127026678/profits-…
The RBNZ has lost control. We have had it too "good" for too long so Orr barely matters anymore - all ammo fired in wrong direction. Things will tick on in NZ OK for most except the homeless as long as Dairy holds up, but the pressures in places like China and the US will determine our future now.
We know that their forecasting models have not been accurate, so this is the question: what does he use?
Crystal balls come in all sorts of price ranges/ qualities. From plastic ones from China to fine crystal glass ones with "special additives" I believe that with a Mark 1V type GRPPo2 model has had some success in predicting macro economics. But that has varied based upon how dark the room/ tent is.
And of course there can be operator error with any of these. Mr Orr may not have the right qualifications.
Coming to all "Developed" Economies? Isn't the threat of "Inflation!" in a debt soaked, ageing society great....
France must raise its pension age and cut the bloated public sector pay bill to get its finances in line and avoid a debt crisis....if the rise in interest rates proves greater than projected that would threaten the viability of the public finances.
Bagging Bitcoin is boring now. Leave that argument to the boomers who will talk about BTC using the energy of Denmark just to switch on the servers. We've moved on. Now, the debate's about Web 3.0 vs the status quo ("what's wrong with Google and Netflix" arguments).
It hit a high of like $67k a week or so and it was pretty clear from there it was going to tank again. It will crash and then recover to like $70K then tank again. The smart people are making a lot of money with the swing trading but if you make money then someone else has to lose money.
Now is the time for the Govt to actually start building 100,000 new state houses
A result of this should be to drive down rental costs as we get to a point of having rentals available when people need them
and if rentals available but not for sale would have a smaller impact on house prices but may assist stop them rising
and if they get the timing right they will keep contractors employed
tricky but doable from a Govt on top of its game -so hence the problem
Um just for the guys talking about Covid. There is a doctor on YouTube. Dr Cambell, last night had a video, correlation between low Vitamin D levels and serious Covid infections/death.
The studies he referenced shows very good results using VitD supplimentation potentially 0 deaths when people have high levels of VitD
That doesn't sound very credible.
Although I am aware of a number of studies that are suggestive, but far from categorical, on the benefits of Vitamin D in potentially mitigating against the worst impacts of infection.
So I for one am taking it. It's harmless and cheap, so at the very least won't do harm.
bpmhopper
For goodness sake - show a little intelligence and critical thinking and stop being sucked in and spreading misinformation and conspiracy theories.
Dr Campbell pushes ivermectin which is discredited by FDA and CDC and here in NZ by MOH and Medsafe.
You refer to the credibility of studies he referenced . . . the studies and trials that he referenced in relation to Ivermectin have been debunked as being utter BS. He and any studies he refers to have no credibility.
Im pretty sure hes Pro-vaccine. He says hes vaccinated and promotes being vaccinated. Im not sure if youve actually watched any of his content because of your response.
Ivermectin will not cure Covid. However it blocks the cell receptor from Covid spike protein attaching to it and can be useful as early treatment.
Anyway, all im saying if studies are showing vitamin supplimentation can greatly reduce severity than why not include it in peoples deits, it cant hurt
bmp
Do a YouTube search and you will find him promoting Ivermectin. Well over a dozen such videos . . . FDA and CDC as well as manufacturer say taking Ivermectin is dangerous.
As posted - he has no credibility as do the studies he has previously cited so I wouldn’t be listening to anything he says or accepting studies he refers to.
Any seemingly positive he may say about recognised vaccines is part of his push for his acceptance of BS spin.
you might want to check out this book : https://www.amazon.com/Automating-Inequality-High-Tech-Profile-Police/d…
Hey Murray.... why are these idiots locking down the vaccinated....?????
You don't suppose....??
Na
https://www.nzherald.co.nz/world/covid-19-delta-outbreak-lockdowns-retu…
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