Here's our summary of key economic events overnight that affect New Zealand, with news that high bond yields are rattling international equity markets. 'Good' economic news is currently 'bad' for market prices because it brings expectations the monetary authorities will keep raising interest rates.
But first, US mortgage applications took another sharp dive last week, down -13% from the week before to be a stunning -72% lower than year ago levels. That was undoubtedly because benchmark mortgage interest rates jumped to 6.62% and their highest of the year so far. The American real estate market seemed to have effectively stalled.
Meanwhile, consumers have turned their attention to retail therapy. Same-store sales rose last week to be +5.3% higher than year-ago levels, roughly keeping pace with retail inflation, and bucking the idea than things are generally grim. It seems to be only their housing market that meets that criteria.
We will get the US Fed minutes from the last meeting at 8am this morning NZT. They are expected to reinforce the official view that they have more work to do to quash inflation's impulse. Perhaps they will also clarify the endgame for their rate hikes.
In Brazil, they are mobilising investigations into a suspected case of mad cow disease. If Brazil suddenly stopped exporting beef, that would throw the international market into turmoil - and be inflationary everywhere else.
We noted yesterday that German business sentiment is improving, and another widely-watch survey on that is out today confirming the trend, their most optimistic since June last year.
In Australia, their wage price index rose again in Q4-2022 to reach its highest in a decade. That's the good news. The bad news is that wages are rising at only half the inflation rate, so Aussies are suffering a sharp loss in real wage levels. It seems to be a uniquely Aussie problem, with the data here showing that wage gains seem to have kept up with inflation - so far at least.
We should note again that the international price of natural gas just keeps on falling, now back to levels we last saw in 2020 and first saw in 1990. After some strategic shocks, it looks like the world has effectively pivoted away from growing use, leaving suppliers with an unprofitable trade. The inflation-adjusted cost of natural gas is its lowest ever, and it is similar for crude oil.
And we should note that the cost of lithium is sinking very fast now, almost a collapse. It is down -30% from its high in November. Waning demand for EV's is said to be the driver of this sharp shift.
It is also worth noting that the cost of carbon credits in New Zealand continue to retreat, now at one year lows.
The UST 10yr yield starts today at 3.90% and down -4 bps from yesterday and off its recent highs. The UST 2-10 rate curve is less inverted at -75 bps. But their 1-5 curve inversion is little-changed at -90 bps. Their 30 day-10yr curve is also less inverted at -64 bps. The Australian ten year bond is unchanged at 3.89%. The China Govt ten year bond is also unchanged at 2.94%. But the New Zealand Govt ten year is starting today at 4.55% and up a very sharp +11 bps from yesterday following the RBNZ MPS.
Wall Street has started its Wednesday session with the S&P500 little-changed near the close. There seems to be a trend developing where firms are priortising dividend payouts. But that doesn't include Intel, or Rio Tinto. Overnight, European markets were mixed, bookended by London down -0.5% and Frankfurt up very slightly. Yesterday Tokyo finished down a sharp -1.3%. Hong Kong ended down -0.5% as did Shanghai. The ASX200 ended down another -0.3% but the NZX50 ended flat with a strong rise at the close.
The price of gold will open today at US$1832/oz and down -US$2 from this time yesterday.
And oil prices start today down -US$2 at US$74.50/bbl in the US. The international Brent price is now at US$81/bbl.
The Kiwi dollar is at 62.3 USc, very little-changed from this time yesterday. Against the Aussie we are +1c firmer at 91.4 AUc. Against the euro we are almost +½c higher at 58.7 euro cents. That all takes the TWI-5 to 70.4 and a +50 bps rise.
Bitcoin has retreated sharply from this time yesterday and is now at US$23,605 which is down a large -6.5%. Volatility over the past 24 yours has been moderate at +/-2.4%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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59 Comments
Can take bottle of water with you from home but who wants to drink either warm water or solid block of ice
4 dollars per bottle is 3 dollars too much for a simple product.
Have you seen the cost of confectionery at service stations. Or buy 2 bars for 50 cents more. Yeah not when you're by yourself.
all your pricing, google searches, bòoking enquires etc are run by algorithims!!!
they manipulate prices upwards based on corrupted data imput.
Google travel, Airlines, homes.co.nz, booking.com etc... all use cookies and search data to manipulate prices to the suplliers benefit.
EG. The more you serch a flight on google travel, the more the price increases, until you clear cookies and site data etc and search again.
We are being screwed.
The Market Faces A Second "Shattering Revelation"
...in an op-ed Monday, Dutch Prime Minister Rutte wrote...
“In peacetime, it's easy to pay lip service to beautiful ideals. But when democracy and freedom are attacked, it comes down to it. In today's geopolitical reality, for the first time in a long time, we have to ask ourselves: what is our way of life worth to us?... in the Netherlands and in many other NATO member states, the defence budget is being structurally increased at a rapid pace.”
'it looks like the world has effectively pivoted away from growing use'
If it's using less, it's doing less. We've long run out of low-hanging-efficiencies fruit, so what is being triaged?
Deferred maintenance, probably.
But it's nothing to do with 'effectively pivoting' - it's just doing less.
Collapsing demand?
There is no scientific evidence that the world is overpopulated. To the contrary, with collapsing birth rates, rising infertility (common result of gene modification), soaring death rates (deaths up ca. 20% in many countries) the problem is the opposite Link
I don't mind reading stuff, evaluating, then either discarding, or filing.
But I do object to abject bullshit - which is what those twitterers seemed to be peddling. Spare me.
This is the nonsense we ended up with, because we chose to transfer our belief-need from some mythical deity, and went for 'growth' as the new idol.
And economists were its Hight Priests.
And it was as wrong as was a heaven.
And we're so grossly in overshoot, that it beggars belief (intended) that folk can simultaneously be so ignorant, while still being capable of tapping keys on their phones.
Yes. I note reports about falling fertility rates, but they also include commentary on countries efforts to boost reproductive rates notably without being called out by the scientific community. So I doubt that many, if any, understand the true cause and effect relationships. All the while consumption, and therefore energy use is being pumped, so old paradigms persist.
Put your coffee gently down Murray, but speaking of the pathologically dim. https://www.nbr.co.nz/unabridged/nz-population-lets-try-for-10-million/?fbclid=IwAR2WvHr3xFAajHZswYhQ6ezKTfwlsatDimkc5e4k0ZMOqgnEYi_wpE3s3x4
In the past 2 or 3 decades , immigration from Asia ( notably from India , China & Philippines ) has powered the Zealandia economy , a wealth of bright young people & their kids , putting new vigour into a stodgy old Pakeha/Maori duopoly ..
... more of this ... open the doors , let them in !
I was more thinking the high priests of exponential growthism slipping "doing less" increasingly into their sermons. Once TSHTF they can flick back through their chicken entrail readings, find a meme fit for purpose and proclaim "see, we told you so", as the Mad Max scenario plays out. "Doing less", has a nice ring to it in a world where "humanity fights like cats in a sack" (Monbiot), for the last morsels.
Who filled out their census form yesterday? And what was your overriding impression of what it suggests is important to the future of New Zealand?
If the collection of stats is simply a counting of heads in the country, where they live and who they are, then maybe it does its job. But if there was ever a chance to ask some informed questions at the same time, then it's a chance that's just passed us by.
Census content is usually agreed 3 years in advance. The questions on who you are and where you live are foundational data that re-bases all other population statistics. It also has to stay consistent with previous Censuses so longitudinal data is available.
If you want opinions then a sample survey of 5% of the population will give you accurate answers for the nation. If you want granular detail at a meshblock level, then you need a Census.
I did a test buy of $50 and it never arrived in my wallet. Used 'reputable' providers (or whatever they are called) as well. So my 'bits' are in cyberspace until i get someone who can understand gibberish to locate them. I guess they are worth more now if i could get em.
The clipping mainly happens when you convert to/from fiat. Once everyone uses Bitcoin for everything then it won’t be a problem. Well except for the fact that the money supply does not grow at the same speed as the economy or user base so it is highly deflationary so you’d be stupid to ever spend it. Didn’t some guy spend millions of dollars worth on pizza once?
Looks like it’s on its way back up again. I was tempted at $16k. How many times can it do this until the suckers realise they are being sucked? I guess there are a lot of fools trying to get rich quick.
Every other time it’s gone well past the previous high before crashing down to earth. Can we expect something like 200k this time?
Bitcoin, like digital money, is an expectation that it can be exchanged for something tangible, in the future.
We are now starting to see the last round of contention for tangible stuff, this being a finite planet and growth having been exponential.
There will be rollercoaster bumps, as various players - from reserve banks to coffee-purchsers - make adjustments which impact each other; but the general trend will be down.
How much, of which proxy (whose dollar, rouble, virtual coin) retains validity - retains mass belief in it's proxyness - is an interesting question.
Don't panic the Greens are going to save us with an excess profit tax on banks.
When asked how much was excess profit,Miss Chloe said over and above regular profit.
When asked what regular progit was she did a JA and swished her hair,pulled a face and moved her hands around because she had no idea.
Has Chloe overlooked the fact that the banks are backstopped by the taxpayer , deemed " too big to fail " by Michael Cullen & Bill English ...
... and that post GFC regulation by the government restricts competition in banking , and further concentrates the power of the big 4 ...
Chloe ?
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