A review of things you need to know before you sign off on Monday; record house building, improved sentiment, PSI rises in south, banks & farmers fall out, swaps hold, NZD holds, & more

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
No changes to report today.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.

RECORD AFTER RECORD
The number of new homes being built in Auckland continues to break records. There were 1949 new homes were completed in Auckland in October, beating the previous record of 1927 in September. At some point this surge in supply will tilt the demand balance, but as used homes are now generally less expensive than new builds, the impacts may not be what you would expect. And building consent levels are declining for future builds.

'A LITTLE BIT OF HOLIDAY CHEER'
The latest Westpac MM consumer confidence survey for December reveals consumer confidence has picked up even if it is still low. Households are feeling less pessimistic about the outlook for economic activity and their own finances. But while confidence has picked up, households aren’t throwing their wallets open. Spending appetites remain weak going into the holiday shopping season. This survey largely reports what the similar ANZ-Roy Morgan monthly survey show though November. The ANZ version for December will come later in the week.

'ON TREND FOR CHRISTMAS'
ANZ says its truckometer monitoring shows the Light Traffic Index (basically cars) rose +1.7% in November from October following two months of falls, but is still -0.9% lower than year-ago levels. Meanwhile the Heavy Traffic Index (trucks) lifted +1.0% in November from October to be a minor +1.4% higher than a year ago. They say: "While monthly moves were consistent with recent trends, it’s notable that the upward trend in heavy traffic has remained pretty flat despite strong population growth, consistent with an economy that is slowing in per capita terms".

'A STEP TO THE POSITIVE'?
The services sector recorded expansion in November, according to the BNZ – BusinessNZ Performance of Services Index (PSI). That is largely due to higher levels the further south you go. In Auckland, there is barely an expansion being recorded, but in Otago/Southland things are roaring ahead. Will it hold up? Not likely if the weak new order levels are any indication.

FEELING PRESSURED
Bankers are increasingly worried about their rural clients, and farmers are feeling "excessive and undue pressure" from their banks according to the Federated Farmers’ latest Banking Survey. Conducted in mid-November, the survey also shows farmer satisfaction with their bank is at record lows. Of the farmers surveyed, more than one in four felt they’d come under 'undue pressure' from their bank over the previous six months, up 2% from May, and at this updated level that is a new record high.

A TIGHTER BOND SOUGHT
The Commerce Commission has received an application from Foodstuffs North Island Limited and Foodstuffs South Island Limited, seeking clearance to merge. It is an application that comes at an interesting time given the public mood for more competition, and resistance against the duopoly. But while operating as separate co-operatives, Foodstuffs North Island and Foodstuffs South Island already currently provide support and assistance to one another as required and work together in a range of ways. They also share ownership of several other entities. So a merger might not actually change very much. We will post a link to the Application document when it is posted here.

PICKING ONE OUT OF THE 'TOO HARD BASKET'
Having just been appointed to the Vice-Chair role at the WTO, Todd McClay as trade minister is off to India to progress what the coalition Government sees as a key strategic goal - a worthwhile trade deal with India. It won't be easy if New Zealand want Indian barriers for dairy lifted. If that is just a bargaining chip, maybe progress in other areas could work. Working with India's government is no easy task, but although the challenges are different, neither is working with China - or any large country. ditto the EU, the USA, or Japan. They are all hard in different ways. Maybe the WTO role will help somewhat?

JESSUP REPLACES DRAPER AT ASIA NZ
The Asia New Zealand Foundation has appointed Suzannah Jessep as CEO, replacing Simon Draper who has moved on to take a diplomatic position. Jessep is also an ex-diplomat (in India), and she is the first woman in this role.

ATMOSPHERIC RIVER HITS PORT DOUGLAS & CAIRNS
In tropical North Queensland, the city of Cairns is cut off due to torrential rains that have flooded roads and its airport has been forced to close.

SWAPS HOLD
Wholesale swap rates are little-changed today as global trends haven't kicked in yet. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is unchanged at 5.62% and now +12 bps above the OCR. The Australian 10 year bond yield is up +2 bps at 4.10%. The China 10 year bond rate is unchanged at 2.65%. And the NZ Government 10 year bond rate is down -5 bps at 4.62%, while the earlier RBNZ fixing was at 4.56% which was down another -3 bps today. The UST 10 year yield is now at 3.93% and little-changed today. The UST 2yr is now at 4.44% so that key curve inversion is now back out to -51 bps.

EQUITIES HOLD EXCEPT IN ASIA
The NZX50 is little-changed to start the week, up +0.1% in late trade. The ASX200 is down -0.4% in early afternoon trade. Tokyo has opened its Monday trade down -1.4% ahead of the Bank of Japan meeting decisions tomorrow. Hong Kong is down -0.7% at its open. Shanghai is up +0.2%. Singapore has opened down -0.5%. The S&P500 futures suggest a +1.3% gain is on the cards when Wall Street opens tomorrow.

OIL HOLD
Oil prices are little-changed from this morning, still at just on US$72/bbl in the US. The international Brent price is now at US$77/bbl.

GOLD HOLDS
In early Asian trade, gold is now at US$2020/oz and and down -US$13 from this morning.

NZD HOLDS
The Kiwi dollar is now at 62.2 USc and little-changed from this morning's open. Against the Aussie we are up +¼c at 92.8 AUc. Against the euro we are firm at 57.1 euro cents. That means the TWI-5 is little-changed at 70.4.

BITCOIN RETREATS
The bitcoin price has moved down to US$41,089 and down -2.2% from where we opened today. Volatility over the past 24 hours has been modest at just under +/- 1.8%.

HOW WE ROLL FROM HERE
Please note that we have normal weekday service this week until Thursday when we transition into holiday mode. The final 4pm Review will be Wednesday. Then we publish our content at a lesser intensity, more focused on holiday reads, reviews, and catch-ups. The advertising that powers much of our sustainability is already on holiday-mode, so this is when we really appreciate the vital support of readers. If you can support us during this commercially fragile time till the end of January, the team at interest.co.nz will be very appreciative.

This soil moisture chart is animated here.

Keep abreast of upcoming events by following our Economic Calendar here ».