Here's our summary of key economic events overnight that affect New Zealand, with news the realities of the post-pandemic bounce are showing it isn't being sustained on a global basis.
This week won't be as busy on the economic data front as last week. It will be mainly Fed-watching in the US, plus PMIs and some key housing sector data there.
China will review its monetary policy positions tomorrow and that will come with eyes keenly watching for more economic stimulus measures. It is seen trimming its 1-year and 5-year loan rates by -10 bps to align with last week's surprise cuts for shorter-term rates that were trimmed to support their property development sector.
But it is more than their property development sector that needs shoring up. China was expected to recover and give the global economy a boost after it abandoned its tough zero-Covid policies and reopened its borders late last year. Yet, domestic consumer spending has tanked and trade has fallen. This weekend's retail event has always been an important retail shopping day, "618" and there are signs that is will also really drag this year. Not only are consumers tiring over the endless 'big' promotions, households are back prioritising savings.
Other country central banks will also be reviewing their positions this coming week, including Norway, Turkey and the UK. In our region Indonesia and the Philippines will do so too. May Inflation data will be released in Japan, Malaysia and South Africa. PMI survey results will also come in Australia, Japan, the UK, and the EU. The Japanese one might reveal a rising expansion, but it is unlikely any of the others will.
Despite getting a new Governor who was thought to be ready to declare victory over deflation, the Bank of Japan under its new leader late Friday kept its key short-term interest rate unchanged at -0.1% and that of 10-year bond yields at around 0% by a unanimous vote. It said it didn't move because of the high risks it sees in international economies.
Singapore's exports slumped in May, and crashing very much more than expected. They have had a good run over the past two years but from July 2022 there has been a steady and now increasing retreat. This data is kind of a regional canary.
The latest update of consumer sentiment in the US, this one from the University of Michigan survey, delivered a bounce that wasn't expected. June sentiment rose to its highest in four months reflecting greater optimism as inflation eased and policymakers resolved the immediate debt ceiling crisis. In fact that caps a year of rising sentiment, with this index up +27% from a year ago. (We should also note it is a public holiday in the US tomorrow so a long weekend for them, Emancipation Day, or "Juneteenth".)
In Australia, the pressure is coming in retail sales. At its monthly review, the RBA noted a "substantial slowing in household spending" and this past week many key retailers have been reporting retreating sales levels, some quite sharp. New data from BNPL operator Zip shows a -7.4% slide in spending in fashion and clothing in the first two weeks of June compared to the first two weeks in May. Some major retailers are signaling sales are down -20% recently. Discounting is being turbocharged and the retailing industry is worried.
The UST 10yr yield will start today at 3.77% and up +3 bps from Saturday. Their key 2-10 yield curve is little-changed at -95 bps. Their 1-5 curve is still inverted at -125 bps. And their 3 mth-10yr curve is still inverted at -135 bps. The Australian 10 year bond yield is now at 4.03% and unchanged. The China 10 year bond rate has held at 2.71%. But the NZ Government 10 year bond rate is down another -2 bps at 4.54%.
The price of gold will start today up +US$1 at US$1958/oz.
Oil prices are slightly softish from Saturday to now be just over US$71.50/bbl in the US. The international Brent price is now up at just under US$76.50/bbl.
The Kiwi dollar starts today up at 62.4 USc and little-changed from Saturday. But it is up more than +1c in a week. Against the Aussie we are firm at 90.8 AUc. Against the euro we are little-changed at 57 euro cents. That means the TWI-5 is just on 70 and little-changed but up +50 bps in a week.
The bitcoin price is firmer than time Saturday at US$26,632, up +1.3%. Volatility over the past 24 hours has been low at just under +/- 1%. We should note that Binance.US and the US Securities and Exchange Commission reached an agreement that avoids a total asset freeze at the cryptocurrency trading platform while the regulator’s suit against it proceeds. Meanwhile Binance is quitting the Netherlands, and is facing a regulators probe in France.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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84 Comments
https://www.nzherald.co.nz/nz/auckland-surgeons-must-now-consider-ethni…
What is happening to NZ ?
I think this is finance news in a way, that has to be the end of Labours chances this election.
Most voters believe in equal opportunity, but that is quite different to equal outcome. Labour seem to be prioritising outcome by giving some groups extra opportunity meaning we no longer have equal opportunity. I get that Maori are getting worse health outcomes, maybe look at fixing those issues rather than bumping them up the surgery priority list.
Politics and economics are inseparable, as the political direction of the nation has an enormous bearing on what will happen from an economic perspective ... and - as you rightly say - this could spell the end of Labour's re-election chances.
Go and check out the comments on the NZ Herald Facebook page about this, or even the extremely left-leaning Reddit NZ forum (where 'Luxon' is literally a curse word) people are seething about this, hundreds of hundreds of comments all in disagreement. Totally unscientific I know, but you don't need the weather man to tell you when it's pissing down.
It's one thing to push for bi-lingual road signs (I actually agree with that, in fact all public 'messaging' should be bi-lingual if we have two languages) or to rename a government department or two (who really cares), but f-ing around with life or death healthcare decisions on the basis of race might be ok to some of the highfalutin Interest.co.nz commentariat, but it is electoral poison to the average person on the street.
“The ruling elite is increasingly angry and bitter that the ruled no longer listen; the ruled, for their part, are bitter that the system so obviously doesn’t act in their interest, nor does it even really pretend to anymore. We might actually wake up one day only to find that neither politicians nor voters think ‘democracy’ is doing very much to help them anymore”. Link
If this policy is based on stats re general health outcomes by race are there any stats going the other way in terms of self health care. In other words by race what is the comparative data for smoking, alcohol & drug abuse, inadequate diet, insufficient exercise regime, personal hygiene and obesity.
Very rare to see someone successful acknowledge it's not purely because of their hard work, good on you. We are playing the game of life on easy mode. If you're getting a large inheritance or a position in daddy's business, even more so.
This recognition quickly leads to increased empathy for those in more difficult situations.
There can be, in some cases. For example, Maori and Pacific people tend to develop bowel cancer younger than Pakeha. Therefore, the appropriate cut-off for bowel cancer screening is lower for them. Age thresholds being based on cost, chance of finding an abnormality, and morbidity caused by unnecessary investigations and treatments based on false screening results (i.e. there is an age threshold, below which a screening program will cause more harm than good or at least not be cost effective)
https://www.nsu.govt.nz/health-professionals/national-bowel-screening-p…
I don't have any insight into why this new decision has been made.
Indeed.
These kids probably needed to just work harder at their education to get ahead in life.
https://www.1news.co.nz/2023/06/18/high-school-students-working-all-nig…
“In that split second, I don’t know – I guess if I was there and able to talk to the examination person I would’ve said ‘she hasn’t slept, the fact that she turned up to the exam is good enough'. And so this child had missed out on her external NCEA level 3 English exam. Now she works at Rainbow’s End. What did she really want to do? She wanted to do law.”
Exactly Foxglove. Being from a different culture actually means you have different viewpoints, priorities and behaviours. In part at least. But the political view is to deny that as making a difference in healthcare. An evil denial.
Similarly in financial matters there are different behaviours deriving from culture. Some cultures value strength through ownership, and look at New Zealand's borrowing obsession as madness.
It’s interesting on one hand some experts are stating that it is no use loading harsher penalties onto gang members in the courts, but instead the root cause of them becoming members in the first place needs to be effectively addressed. That being the case surely the same maxim would apply to health. That is prevention of lifestyle leading to symptoms and health issues causing getting folk to need hospital treatment.
"but instead the root cause of them becoming members in the first place needs to be effectively addressed" But how many of those experts would identify that the root cause was decades, and generations of poor socio-economic policies out of Government that drove down living standards, exported jobs and seemed focused on generating dependency rather than independence?
I suggest it is no wonder there are so many angry, frustrated and disenfranchised people not just here but around the world.
Absolutely, the prime determinant of health is wealth, the poorer are sicker, less educated and less employed.Our health system is the overpriced ambulance at the bottom of the economic cliff.
Maori and Pacific just happen to be in this bottom rung, it's the associated poverty that leads to poor health outcomes rather than the health system per se.
If only society could get these people to school and into good careers before it's too late.
Perhaps a tax rebate on premiums might encourage more to insure themselves and take some pressure off the public system. But then again there was Michael Cullen at his cynical best who exclaimed something like - if you can afford health insurance you don’t need a tax break.
Great when you are in work and under 65. Just ask your private health care provider what your rate will be on retirement. Will make your eyes water. Private health care only want you when the employer subsidises you (and are reasonably healthy). Anyone else go and take a hike (as in fees costs hike).
Yep, just wait and see what happens in the next 10-20years when you claim your private health insurance, they get hold of that 'Ancestry' DNA test you sent away for when you were 50 and they decline you on the basis that you were genetically predisposed to getting X, Y, and Z diseases, conditions etc. I see this becoming a norm.
The most valuable piece of information anyone could have or hold over you is your DNA.
Does this depend on where you go?
I have SC, but find it fairly useless as it works on a claim back - we mostly have it for private surgery access should we need it.
We find self-insuring has been far better - we put a little aside every week for 'future health needs' - so there's always a small pot available to pay the doctors fees (which admittedly are outside of the budget of most poor people - though the CSC is meant to help with that [I don't have one]).
I've been in hospital urgently twice this year - both times I was at the doctor within 15 minutes (for a fee, paid out of aforementioned health pot), and in the hospital an hour later. Several hours waiting for a bed, however, I wasn't at deaths door and pain relief was immediately available, so that was more an inconvenience than a problem.
The services rendered by the staff (at Auckland Hospital) were excellent - and this was 3 days after their busiest day ever.
But this is only one person's perspective.
I broke my hip socket in a crash in December and waited 4hours at hospital before getting asked to see if I could stand up by the nurse when they roll called to see who was still left in the ED room, I almost collapsed from the sciatica. Waited another 4 hours to get x-rays then another 4 hours to get admitted. Once admitted everything was ok, but the ED was something else.
it is time all Kiwis were treated the same....exactly - Māori are more likely to get cancer, will get it younger, are diagnosed later, have poorer access to treatment, and are much more likely to die from cancer than non-Māori, because of inequity in the health system.
The drivers for the trends included inequity in cancer control, leadership, decision-making, and resourcing and action, which resulted in "institutional racism".
Sneakily wrong Baywatch. Because there are three main drivers of different outcomes. Culture, genetics and culture. You left culture off your list.
Being from a different culture actually means you have different viewpoints, priorities and behaviours. In part at least. But the political view is to deny that as making a difference in health outcomes. An evil denial.
Debate over entry into medical schools is sign of the times | Stuff.co.nz
"Māori and Pasifika students doing a first year health science course at Otago need a minimum 70 per cent mark for each individual subject to be considered. The cut-off mark for general entry students is 93 per cent."
10 seconds on Google.
2 secs in Chat GBT -
As of my knowledge cutoff in September 2021, there was no specific policy in New Zealand that granted Maori or Pasifika individuals lower academic entry requirements for medical school. However, it's important to note that medical schools in New Zealand may consider factors other than academic achievement during the admissions process, such as cultural background and personal experiences. This holistic approach aims to increase the diversity of the medical profession and address health disparities among different communities.
New Zealand has made efforts to promote indigenous representation in healthcare and address health inequities faced by Maori and Pasifika communities. As part of these efforts, medical schools in New Zealand may have initiatives or programs to encourage and support Maori and Pasifika students in their pursuit of medical education. These programs aim to provide opportunities and resources to students from underrepresented backgrounds.
There's absolutely no evidence that choosing doctors from the people who can get the highest marks in exams is the best way to go about it.
And it gives a massive advantage to candidates from wealthy families and those who've been to private schools who have a huge educational head start.
BlackRock (BLK.N), the world's biggest asset manager, on Thursday filed for a bitcoin exchange-traded fund (ETF) that would allow investors to get exposure to the cryptocurrency, as the asset class comes under intense regulatory scrutiny.
BlackRock's iShares Bitcoin Trust will use Coinbase Custody as its custodian, according to a filing with the U.S. Securities and Exchange Commission (SEC). The U.S. regulator has yet to approve any applications for spot bitcoin ETFs.
Racial division in health and now also in justice. Maori to bypass the justice system and no longer to be referred to the courts.
https://www.newshub.co.nz/home/politics/2023/06/police-minister-ginny-a…
"It comes as the Government on Friday kicked off the multi-million-dollar extension of Te Pae Oranga, a scheme where offenders are placed before community panels instead of the courts."
https://blog.gorozen.com/blog/hubberts-peak-is-finally-here
Is this why the global economy is struggling?
The same saying applies to the USA as it does to Australia re "The Lucky Country".
"The only growing non-OPEC basin is the Permian in West Texas. Never before has oil supply growth been so geographically concentrated. Six counties in West Texas are now 100% responsible for all global production growth."
Yes, and we need to worry about this inevitable knock-on:
https://scheerpost.com/2023/06/17/seymour-hersh-partners-in-doomsday/
We're selling a property. Two units. Buyer asked for vacant possession so 90 days notice. An older couple and a young family are being moved on. It's going to social housing in order to deduct the interest cost. You will pay their rent.
This is a direct, intended consequence of the Government's tax policies. It's in the BOP, there are virtually no rentals anymore, so many have gone to AirBNB or KO.
Meanwhile credit rating agencies will be watching our deficits (budget and current account) quite closely.
Lower commodity prices could widen our current account gap further as terms of trade worsen and lesser tax take from the agricultural sector reduces our ability to balance our books.
Do we have data going back 50 plus years on spend per capita in each area of core govt spending? Health, Education, Welfare? Something structurally seems off. Either our expectations are too high, the money isnt there or its being spent elsewhere. I suspect the money isnt there could be a big factor. As a young country we seemed to make remarkable progress for the first 100 to 150 years of western development. A bit of a boost post WW2 then hammered with being shut out of EU. Will agriculture and tourism pay for our expected living standards for the next 100 years?
Govt in yet another pointless meeting about meetings:
Chippy: "Now how can we shift our society to having to rely on the number of humans increasing at an exponential rate, depleting all resources until like bacteria in a petri dish, there isn't anything left to consume and nowhere left to grow?
Lackey "Well AI will have something to help towards that In many ways, perhaps we look there?"
Chippy: "Well....It could (rubs chin)... but you know what, bugger it, let's go with the classic!" (turns on the immigration tap to full bore)
Will agriculture and tourism pay for our expected living standards for the next 100 years
Tourism has one of the lowest GDP per employee among NZ industries. If the sector were to somehow increase its value-added by 50% with the same number of employees, it would still be below the rest of the economy.
In short, tourism brings in the big dollars but makes us poorer as a country even before you consider all the billions spent each year by the government propping up the sector.
Agriculture makes up less than 11% of our GDP, 82% of our goods exports and two-thirds of total exports. I think the concern here is the overwhelming portion of our economy not pulling its weight on bringing in export dollars.
Absolutely Advisor. As the late Sir Paul Callaghan (no slug in the brain department) said several years ago..."If we want to be poor, promote tourism". One needs to be be very sceptical when the huge inflow of foreign currency is predicted by those who want more tourism. Package tours in particular fly in via foreign airlines, stay at foreign owned hotels, use foreign owned internal tours. The money may be spent here, in part, but clearly flows out again just as speedily.
We have a solid base in primary exporting, and while clearly it needs to be facilitated by all many of service industries, a strole through any major town will suggest most of what we do is to take in one another's washing.
Too many drones and not enough worker bees. One hopes there is some 'cunning plan' within our urban population to deliver services that contribute to export earnings, rather than consume them.
Our severe trade deficit over many years suggests this is not happening.
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