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A review of things you need to know before you sign off on Friday; DCS levies to be solely risk-based; building permit falls bottom out, businesses don't see inflation returning, NZX50 rises on global trends, swaps stable, NZD rises, & more

Economy / news
A review of things you need to know before you sign off on Friday; DCS levies to be solely risk-based; building permit falls bottom out, businesses don't see inflation returning, NZX50 rises on global trends, swaps stable, NZD rises, & more

Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).

MORTGAGE/LOAN RATE CHANGES
WBS (Wairarapa Building Society) cut its floating rate by -40 bps to 8.1% today. They also trimmed some fixed rates. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
WBS cut term deposit rates as well, the only mover so far today. We suspect there would be TD changes from a major or two on Monday. For example, we hear (from readers who got an advance email) that Kiwibank will be adding +20 bps to its six month TD offer. All updated rates less than 1 year are here, for 1-5 years, they are here.

A WIN FOR THE BIG BANKS
The Government has decided on a risk-based approach to levy funding for the Depositor Compensation Scheme, against the advice of the Commerce Commission. The levies will reflect the likelihood of a DCS payout occurring, the impact of the levy on entity soundness and the predictability of levy payments. 

DOWNTURN BOTTOMING OUT
More houses and retirement units are being consented but fewer apartments and townhouses, our comprehensive Q3 review shows.

NOT SEEING INFLATION'S PRESSURE RETURNING
The RBNZ's inflation expectations survey of businesses (M14) reveals fall-backs at all horizons in this quarter's report. Expectations for one-year-ahead annual inflation decreased by -33 bps from 2.73% to 2.40%. Two-year-ahead inflation expectations decreased from 2.33% to 2.03%. Five-year-ahead and ten-year-ahead inflation expectations decreased to 2.07% and 2.03%, respectively. The RBNZ will be pleased with these results.

NZX EQUITY MARKET UPDATES
Check out our quick update of how the NZX is faring today, as at 3pm. The Warehouse Group, Chorus, and Goodman led gains, helping the S&P/NZX 50 rise by +1.3%. But NZX, FBU, and Serko were notable decliners, balancing out the day’s changes

NO MORE WEEKLY UPDATES
MSD have now stopped releasing JobSeeker claims data on a weekly basis. They say their monthly reporting will continue however.

CONTINUING CAUTION
Americans remain cautious taking on new personal debt. That rose by only +US$6 bln in September, a slowdown from the almost +$9 bln rise in August and well below the expected +US$14.5 bln increase. Now the average balance is US$23,087, up from US$18,008 four years ago. These are not actually high levels. (The divisor we used is the total population 18 years and older.)

UNWINDING EXTENDS
For the first time since May 2020, the US Fed saw its balance sheet assets fall below US$7 tln last week. That is a -US$53 bln fall in a month, a -US$2 tln fall since it peaked at US$8.96 tln in April 2022.

LIFE EXPECTANCY FALLS AGAIN IN AUSTRALIA
In Australia, they released life expectancy data today - and it declined for a second straight year. An Aussie born today is expected to live to 83.1 years (boys less, girls more). The years 2021-2023 saw the highest number of COVID-19 deaths with 15,982 in Australia, which was up by 4,100 from 2020-2022. (The emergence of the antivax movement and weird alternative approaches won't be helping either.) As a result, life expectancy has fallen by 0.1 years for men and 0.2 years for women over this period. Despite this decrease, Australians still have a higher life expectancy than many comparable countries, like New Zealand (82.8 years), the UK (82.2 years), the US (77.6 years), and Canada (81.5 years). Today, a 60-year-old Australian man can expect to live another 24.2 years, and a woman another 27.1 years.

SWAP RATES SETTLE
Wholesale swap rates are probably not moving around much today. Our chart below will record the final positions. The 90 day bank bill rate is up +1 bp at 4.49%. The Australian 10 year bond yield is down -7 bps from this time yesterday to 4.62%. The China 10 year bond rate is down -1 bp to 2.12%. The NZ Government 10 year bond rate is also down -1 bp from this time yesterday, now at 4.72% while the earlier RBNZ fix was at 4.66% and unchanged from yesterday. The UST 10yr yield is now at 4.34% and down -9 bps from yesterday. Their 2yr is down -5 bps at 4.21%, so that curve is now less positive, now by +13 bps.

EQUITIES ALL RISE
The NZX50 is essentially up +1.3% in late Friday trade. The ASX200 is up +1.0% in afternoon trade today. Tokyo has opened with a +0.4% rise. Hong Kong is up +1.0% at its open. Shanghai is up +0.7%. Singapore is up another +1.3%. Wall Street was up +0.7% on the S&P500 in Thursday trade.

OIL UNCHANGED
The oil price is unchanged from yesterday, still just on US$72/bbl in the US, and just on US$75.50/bbl for the international Brent price.

CARBON PRICE STILL FIRM
The carbon price is little-changed today, very marginally higher at $63.60/NZU in moderate trade. But that is still the highest level in almost 8 months, since mid-March. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD RECOVERS HALF
In early Asian trade, gold is back up +US$53 from yesterday at this time, now at US$2701/oz.

NZD REGAINS SOME
The Kiwi dollar is up +70 bps from this time yesterday, now at 60.2 USc. Against the Aussie we are down -10 bps at 90.3 AUc. And against the euro we are also up +30 bps at 55.8 euro cents. This all means the TWI-5 is down a bit more than -60 bps at 69.

BITCOIN HOLDS HIGH
The bitcoin price has risen a marginal +0.7% from this time yesterday, now at US$75,963. Volatility of the past 24 hours has been modest at just over +/- 1.6%.

Daily exchange rates

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Source: RBNZ
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Source: CoinDesk

Daily swap rates

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Source: NZFMA
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This soil moisture chart is animated here.

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

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44 Comments

Good news here: https://www.rnz.co.nz/news/business/533238/christchurch-engine-centre-t…

But given our experience with maintaining high voltage pylons and not preventing them from falling over and steering ferry boats straight into the shore without knowing how to prevent it from happening, I think those 200 highly skilled jobs will come most likely from overseas.

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Indeed, you just cannot train people for those sorts of complicated tasks in NZ.

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Re ... A WIN FOR THE BIG BANKS ... If I may  ... 

The biggest trick the Devil ever played was convincing us that we need privately owned banks.

Prove me wrong. I'll bet you can't ... [evil grin]

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Australia being one of the countries that didn't suffer excess death during the pandemic. Sweden and NZ being top of the table - despite Sweden having no mandatory lockdowns, masking, kept their kids in school etc.

"While the pandemic hit some countries earlier than others, country vulnerability dominated eventually the cumulative impact. Half the analyzed countries witnessed no substantial excess deaths versus prepandemic levels, while the others suffered major death tolls."

Variability in excess deaths across countries with different vulnerability during 2020–2023

John P A Ioannidis, Francesco Zonta, Michael Levitt

https://pmc.ncbi.nlm.nih.gov/articles/PMC10710037/

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(Yawn) ... Let it go.

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Aotearoa tried to use the Covid death count like it was some kind of back-slapping medal table (in this case, the fewer medals the better). But it's not the Olympics.

I pointed out to people that Greater Sydney has a similar popn to the whole of Aotearoa, therefore you could expect the incidence of Covid is likely to be greater than in an isolated nation at the end of the world with limited entry points and no developed public transport system.

We need to be more serious.     

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(Yawn) 

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Are you tired? Long Covid perhaps. 

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That must be it. Your diagnosis is much appreciated. ;-)

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Is it my imagination, or did more people dream up long Covid before the majority of the population got it compared to now? The incidence of long Covid seems to have gone from like 10% of Covid cases to 0.0001% IMO

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No. It is well known that viral infections can have long lasting effects.

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I am still waiting for all the dead people to be found stashed in the bush somewhere. Thousands clearly died from the vax and all I can conclude is that the bereaved families had their memories wiped by laser drones. It's a scandal waiting to break.

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It all got covid up by hackers. 

Hence the phrase: hacking cough? 

They were wrong - but the Orwellian truth is that they had reason to base their fears as they did. They'd been kept in the dark and fed a fairy-story. 

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If you feel a cough developing in proximity to others, you need to take action... have a far cough instead.

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Fed Chairman Jerome Powell says he'll refuse to leave if Donald Trump asks for his resignation.

People are at least learning something: The Fed is not actually part of the government and that unelected bureaucrats are in control.

During a press conference Thursday afternoon, Powell said he would not step down from his position as Fed chief even if President-elect Donald Trump asked him to.

“No,” he said in response to a reporter’s question on whether or not he would leave if Trump asked him to resign.

Later on, another reporter asked Powell if the president had the power to fire or demote him from his position. The Fed chair responded that such an action was “not permitted under the law.”

https://www.cnbc.com/2024/11/07/fed-meeting-live-updates-traders-antici…

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Wrong way of looking at it, IMO.

Powell's position is a fundamental part of the "checks and balances" of the US system.

The wind is blowing against Trump in this instance ... And Trump wants to piss into it? 

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My point is that most people don't understand the US govt has limited power to fire the Federal Reserve Chair.

The St Louis Fed has a reasonable umbrella pitch of who owns the Fed. 

https://www.stlouisfed.org/in-plain-english/who-owns-the-federal-reserv… 

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"My point is that most people don't understand the US govt has limited power to fire the Federal Reserve Chair."

umm.. my point also. 

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umm.. my point also.

You should just have repeated what I wrote or replied "agree". Much more direct and confirmatory. 

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My apologies. But my comment was direct. Whereas yours was vague ....

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Who is able to change that law?  Oh thats right, Trump.  

“If the president and the Congress together believe that some powers need to be changed, then they can do that, but it has to be a legislative process,” he said.

https://fortune.com/article/donald-trump-jerome-powell-federal-reserve-…

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LOL. Might I suggest you spend some time understanding how US laws & policy get made and executed before suggesting a US president has any such power?

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If the left wing made such a move, what would you think of it? I doubt we’d ever hear the end of it. But if Trump did it, that’s OK?

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Might I suggest you spend some time understanding how US laws & policy get made and executed before suggesting a US president has any such power?

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More house listings in spring than in winter, you don't say !

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Is anyone watching Queenstown real estate listings? They are exploding higher. 

Greater Wanaka now has close to 300 houses for sale and central Wanaka is 225. That must be >10%.

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To target the American rich escaping? [humor]

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I think thats happening everywhere.  Listings for my Chch searches have also exploded.

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It's almost like this is peak season for listing a house for sale.

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This is fine.....

 

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They don't look to be selling at volumes people are used to.

Seems like sellers aren't that motivated, and everyone's pretty much just waiting on the assumption that rates have a ways down to go.

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I've been keeping an eye on ChCh / near  Canterbury this year, with a view to a holiday home / future relocation.

Agree with significant improvement in listings since inrerest rates started reducing, several houses on my watchlist that sat for months over winter (progressing from Auction to Tender to PBN to Asking price...) have recently finally sold. Including some inner city new builds from last year.

Also at least a 10% price increase from a year ago.

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Large numbers of new houses being built and no industry apart from tourism and construction.

Perhaps the Wanaka and Queenstown housing market could be in for a correction. 

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I wouldn’t mind one of the price is right 

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Wanaka must have over a years supply. You're not selling a house anywhere without a discount, there is so much choice. 

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Many newbuild townhouses in Auckland being discounted from circa 750k to circa 630-650k

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Yes as have been staying in Arrowtown the last 6 months alot on the market in Arrowtown seens to sell very quickly. Hanleys farm and Jack's Point alot. Also wooing tree cromwell but you can literally lean out your window and shake your neighbours hand. Especially wooing tree and Hanleys Farm. But a third of houses brought here is overseas buyers which are then just used as holiday homes

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Townhouses for rent in Auckland on TradeMe at over 860. Most of them new builds. Rental inflation is dead.

Really, the OCR needs to be slashed to no more than 2.5% by June

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They should. But ya'know - they'll make stuff up as to why they won't. (And too many people will lap it up and lean with them.)

Just quietly ... had they started to ease in November 2023, they'd be quite well positioned by now.

Just ignore me. 

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I agree, in fact I had said mid 2023, but that was too early. Yes late ‘23 or early’24 was the right time

It’s curious how little the RBNZ gets called out. ‘Small country, small industry’ I guess. People not wanting to rock the boat

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Things are at a certain point of desperation…. Bank CEOs calling possible bottom.

Most Woke Businesses in NZ

Here are some of the most woke businesses currently listed on this website (we will be adding more businesses over time). You can decide for yourselves who to do business with and who to avoid. This list highlights some the most woke:

  • The Warehouse
  • Air New Zealand
  • Spark
  • One NZ (formerly Vodafone)
  • BNZ, ASB, ANZ, Kiwibank
  • Starbucks

(note – this is not the entirety of woke businesses in New Zealand, but simply the most woke businesses currently reviewed on this website.)

 

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Reconciliation is what is required

Reckon we're a silly nation is what happened. 

Close, but different. 

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To be good with reconciliation now days requires SQL skills , was just Vlookup, in a few years you will need AI to understand the "simplification" that was but a distant mirage.

Place your bets PDK, the crunch points are likely to present on a shorter time frame then anticipated. Always bet for the frame you are in.

 

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Why would you take the time to post such a list - what is woke according to you?

Yer lets not do business with Air NZ - good luck with that.

Seems like the brain worms are spreading?

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