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
Heretaunga Building Society trimmed its 1 year fixed rate today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Heretaunga BS also cut its 1 year TD rate. All updated rates less than 1 year are here, for 1-5 years, they are here.
SLOW STEADY DECLINE
Residential construction in Auckland is facing a steady decline rather than a sudden crash - so far, at least.
RETAIL SALES FLATTEN OUT
Stats NZ figures show that seasonally adjusted retail sales by volume decreased by -0.1% in the September quarter, but the figures were down -2.8% on the volumes recorded for the same quarter in 2023, down -1.7% if you exclude car sales.
"PROGRESS" DESPITE BIG AIRCRAFT PAYMENT
In October, compared with to the same month a year ago, merchandise goods exports rose by +$400 mln or +7.5% to $5.8 bln for the month. Imports also rose, by +$211 mln or +3.0%, to $7.3 bln. That means we have an October trade deficit of -$1.5 bln, down from -$1.7 bln in 2023. It would have been $300 mln better if AirNZ didn't buy a $300 mln aircraft. And that took the 12 month trade deficit to just under -$9 bln. And that annual level is the lowest since 2022.
AN UNWANTED 25 YEAR RECORD
For most months of 2024, tractor sales have been running -20% lower than year ago monthly levels. In October 2024, that was only 198 new tractors sold nationwide. And, even including the pandemic years, that was the skinniest October since 1999. In that quarter century, the average October level was 310 per month, with the best being 404 in 2017.
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. NZX50 up for yet another new recent record high, led by Turners and some gentailers. Dragging however were Oceania, Hallensteins, and Spark
A LATE MOVER
Synlait has raised its forecast payout level to $9.50, matching the Fonterra mid-point level. Details of payout levels from all dairy companies are here.
MILK PRODUCTION TURNS UP
Incremental monthly milk flows are turning higher. They have been declining since 2021, but the recent improvements, undoubtedly built on favourable weather conditions, are now at their best annualised levels since 2022. Having said that, they are unlikely to better those earlier years when the 2024/25 season is all in.
ASB ESTABLISHES GENERAL MANAGER OF CLIMATE TRANSITION ROLE
ASB says Sam Friggens, who joined from consultancy Mott MacDonald, started in the newly established role of General Manager of Climate Transition at the bank on October 29. Friggens is working alongside ASB General Manager of Corporate Sustainability Robbie Falconer and its Head of Sustainable Finance James Paterson, focusing on developing climate transition products, supporting customers with climate transition, and building up climate and clean tech capability within ASB, the bank says.
MTF REBRAND
MTF, formerly known as Motor Trade Finance, has rebranded itself with the tagline "your local money experts." MTF now offers personal and business, as well as vehicle loans, plus a mortgage advice product. Its receivables have reached $1.1 billion.
NIM CIRCUS STARTS
The latest industry NIM summary& (net interest margin) from the RBNZ for the September quarter sees it falling by -1 bps to 2.34% from the June quarter. That is back to the same level it was a year ago. We will get the individual bank NIMs in the next RBNZ Dashboard release which is due out tomorrow. And that will reveal the frustrating differences between what the banks themselves tell "the public", and what they tell the RBNZ. Chief culprits in these differences are Westpac and ASB.
SWAP RATES SOFTISH
Wholesale swap rates are probably a bit softer again today at the short end. Our chart below will record the final positions. The 90 day bank bill rate is probably down about -5 bps today to 4.33%. (Please note that the RBNZ is delaying the release of this data by one day, due to rights issues with the source, the NZFMA. The delay will started today.) The Australian 10 year bond yield is -3 bps lower from this morning to 4.54%. The China 10 year bond rate is unchanged at 2.08%. The NZ Government 10 year bond rate is down -2 bps at 4.65% while the earlier RBNZ fix was probably at 4.66% and down -5 bps from Friday. The UST 10yr yield is now at 4.35% and down a sharpish -6 bps. Their 2yr is also at 4.35%, so that positive curve has now vanished.
EQUITIES MOSTLY HIGHER, LED BY THE NZX50
The NZX50 is up +0.7% in late Monday trade, and a new all-time high. The ASX200 is also up +0.7% in afternoon trade today. Tokyo has opened with a +1.6% gain. But Hong Kong is essentially unchanged and Shanghai is down -0.2%. Singapore however is up +0.2%. Wall Street weekend futures trading suggests the S&P500 will open tomorrow up +0.7%.
OIL ON HOLD
The oil price is unchanged from this time morning, still at US$71/bbl in the US, and at just over US$75/bbl for the international Brent price.
CARBON PRICE DIPS
The carbon price fell today. After ending Friday at $63.90/NZU, it is trading back at US$63/NZU today. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD STARTS LOWER
In early Asian trade, gold is down -US$16 from this morning, now at US$2699/oz.
NZD RECOVERS
The Kiwi dollar is back up +40 bps from this morning, now at 58.7 USc. Against the Aussie we are unchanged at 89.7 AUc. And against the euro we are still at 56 euro cents. This all means the TWI-5 is now at 68.5 and up +25 bps.
BITCOIN RISES SLIGHTLY
The bitcoin price has risen +1.1% from when we opened this morning, now at US$97,275 Volatility of the past 24 hours has been modest at just under +/- 1.3%.
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110 Comments
Bad Girl Yellen is gone. Exiting office. And the NY Post article is vicious and damning. Suggest those people who might understand the implications read it.
Despite her gold-plated résumé, Ivy League degrees, and time served as Fed chair, Yellen gave the country just the opposite. Her boss paid the price politically as the American people paid the price economically.
And according to my sources, the American people aren’t done paying the price for Yellen’s mismanagement even if most of the financial media is overlooking the fiscal time bomb she devised — one that could blow up once Trump takes office.
Specifically, my sources who follow the bond market say Yellen has been setting a trap for the incoming Trump administration through the way she financed the massive $1.8 trillion federal budget deficit that exploded during the Biden years with the accumulation of $36 trillion in debt.
https://nypost.com/2024/11/23/business/janet-yellen-exiting-office-leav…
Nothing to understand, they are in the shit no matter who is trying to "Run" the country. Fewer and fewer people over there own everything and the general populace are getting ever increasingly desperate and looking for someone to blame and someone like Trump to save them. Its a slow motion train wreck.
You could replace "they" with "we/us" and it would still hold true, perhaps more so. The only difference being the train wreck is picking up pace in NZ. The US on the other hand is the too big to fail in matters of economy, science, agriculture/food tech, science & technology, defence, geopolitics, culture and entertainment.
Were you being funny J.C.?
When FOX Business Network's Charlie Gasparino discloses his "sources" and why they think Yellen "has been setting a trap for the incoming Trump administration" I may take some notice. Frankly, I'm quite surprised you give any credence to such reporting.
I just highlighted the link and labelled it 'vicious' and 'damning.' Why is that giving it credence? It doesn't even mention her earning over $7.2 million from speaking engagements with major financial institutions and corporations, including Citi and Goldman Sachs, between 2019 and 2021.
Everyone's still paying the price of the Greenspan/Bernanke years at the Fed Reserve? Appears Yellen has just taken her central bank thinking into treasury. Bloody economists and their dogmatic thinking.
Wall St and the stockmart have been well looked after and now they're afraid?
It's a constant blame shifting game and the masses fall for it everytime.
DGM oozing like an oil well thick and fast out there in the Aussie consumer land.
Even though Albo is bringing in equivalent populations of Canberra and a Hobart each year, 8.5% of cafes went bust last year and 10% are predicted to go bust next year.
Something's possibly broken.
Independent Food Distributors Australia chief executive Richard Forbes also warned customers can expect to pay significantly more for food and beverages if action isn’t taken to address rising business costs.
“Our average members are facing energy bills of $25,000 per month – not per annum, per month” .
“All of those costs have to be absorbed. And at the end of the day, when you have rising energy costs, insurance, rents, fuel and labour costs in the beginning of the supply chain down to the end of it, then the people that end up paying more for their coffees, their pieces of carrot cake, their meal at a restaurant, their parmigiana at a pub, are the consumers.”
https://www.news.com.au/lifestyle/food/restaurants-bars/there-lies-the-…
I thought massive population growth meant lots of ethnic food? Seems along with all the other downsides of living like cheek by jowl, ethnic food is off the table too?
I guess the mass importation people benefits someone? I mean no one with any influence ever questions it?
"8.5% of cafes went bust last year and 10% are predicted to go bust next year. "
Hospo. Fail frequently and pop up again. Perhaps a few more than usual. Nothing to write home about.
"Our average members are facing energy bills of $25,000 per month – not per annum, per month” ."
can't be your cafes. Hotel groups? Would like to see more detail on that before I believe it, especially the average part.
As the old saying goes You can have your head in the freezer and your behind in the fire but on average you are all right.
""Wall Street weekend futures trading suggests the S&P500 will open tomorrow up +0.7"
I'm this run quite impressive but starting to get a little nervous.
Good to see the NZX hit its all time high - WOW. Might start allocating soon. No FIF tax or FX issues to worry about
Melbourne was once the richest city in the world.
However, as of today, Tassie has a higher household income per capita than Victoria.
https://www.afr.com/policy/economy/embarrassing-victorian-households-fa…
Some context would be useful. Melbourne was supposedly the richest city in the world - in the 1880s. Been downhill since then. Makes a good headline though.
They've half a trillion dollars or so of oil reserves - and that's only at today's price. Presumably as oil gets more scarce, that'll only increase in value.
They can invest it into whatever assets are still likely to have value. They already invest in renewables.
Unless we're predicting a Mad Max style future. Which if we believed with any seriousness, we're probably wasting every day left before then.
PDK is talking about the end of oil, which won't happen all at once, and economies likely won't fail uniformly either.
The poorer nations will fall first, being incapable of affording increasingly scarce and expensive resources. Somewhere like Norway, will likely survive for longer than most.
Maybe it'll all fall apart at the seams also, I'm more inclined to think it'll be a mid point between "everything's fine" and the end of times.
So you are saying it will depend upon where you are? I agree that the poorer nations will fail first (they already are)...but as the more capable feel the pressure will they simply curl up and die?...id suggest not.
NZ has (very) limited oil reserves and no ability to refine them....how do you think we may fare?
And I'm sure my Corolla could be converted to run on avocado oil if I really wanted to.
Could it be done economically? At the end of the day anything's possible if you knock it all down and rebuild it with different aims. I would've thought the capability to refine NZ oil would've been high on the priority list for the government (that built it) if it was sensible.
Yes we have the option to import it....for now.
"Last year, the Fuel Industry (Improving Fuel Resilience) Amendment Act was passed. This legislation introduces a minimum stockholding obligation (MSO) that, from 1 January 2025, requires fuel importers to hold, either onshore or on ships in New Zealand’s EEZ:
- 21 days’ cover for diesel
- 24 days’ cover for jet fuel
- 28 days’ cover for petrol"
https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resourc…
What can we build in 21 days do you think?
Why would our reserve size be exactly the amount of time we'd have to adjust?
More likely as oil became more scarce, our usage would decline, reserve sizes would increase, and a disproportionate amount of energy and resources would go into building internal resilience.
We just don't have the sense of urgency given the status quo. Just like most people don't grow their own food, because it's a given you can just pop down the shops. As the shelves emptied, people would adjust their behaviour.
Think about what you have just outlined....when people go to the supermarket and the shelves are empty they will go home and start a garden?
Even if they did, what will they eat while the garden grows, if indeed it does given their lack of experience and wider conditions?
Possibly people would live closer to food production, due to increased labour requirements, and transport efficiency.
But yes we can potentially also make biodiesel, have run a few vehicles off vegetable oil. It's also not very efficient, but in this scenario diesel usage would plummet.
pretty good summary of where things are at ...
"Globalization fueled by neoliberal economics, communism, fascism all proved to be failed experiments when it came to managing a massive growth in surplus energy. Now, at the tail end of global economic growth, none of these systems has an answer what to do next. None of their advocates understand that we have entered the final phase of modernity either. As we have seen above, all of this civilization’s power sources depend on each other, and as they slowly turn net energy negative and peak one-by-one, the gigantic energy Ponzi will start to unravel. First gradually, then suddenly"
https://thehonestsorcerer.substack.com/p/a-diesel-powered-civilization-…
Replace the word globalisation with capitalism, or even colonisation, and it changes the entire rhetoric.
Ask where has all the energy gone and we soon see that it's a humanity issue.
As for what to do next - we're still arguing about taxes and wealth, immigration and cost of living.
As for what to do next - we're still arguing about taxes and wealth, immigration and cost of living.
As we're on an Island, I think immigration is highly valid. More space per person makes sense to me.
The others are about living more cohesively (increasing fairness). A fall in standard of living is more acceptable if everyone else is in the same boat.
They need more cops on the beat just walking around in the CBD, its been years since I had to walk up Queen St for work but it was bad then and its no fun at night either. The place is now full of homeless people and others with obvious mental problems and drug issues.
Its one thing you really notice in Brisbane - cops on the beat everywhere. Several packs of them walking up and down the city mall. Driving around the city streets. In fact, I saw so many cops at the Roma St train station I thought there had been a terrorist incident or something (as over a dozen cops were there). All packing as well.
Tough on crime, just so long as it doesn't cost any extra money...
https://www.rnz.co.nz/news/top/518300/budget-2024-nearly-200-police-sup…
Today is beat-up-on-Victoria Day, the 'poor state' of Australia.
But since the turn of the century, Victoria’s status as one of Australia’s most prosperous and powerful states has been steadily eroded. It now ranks alongside South Australia and Tasmania as “cellar-dwellers” in terms of relative economic performance; it is the most indebted state or territory as a proportion of its economy; and it has been almost 33 years since a Victorian was last living in The Lodge.
The parlous state of Victoria’s finances mean voters are bound to face a combination of cuts in government spending and increases in taxation.
https://www.afr.com/politics/how-victoria-became-a-poor-state-and-the-1…
It is surprising that they havent at least matched the BNZ’s 6 month rate.
However it is coming without doubt and the BNZ will lower again after the OCR announcement which is most likely .5% rather than .75%.
If it is .75 % it will make the RB clearly show that they clearly overcooked the interest rate rises and for too long.
They wanted unemployment numbers up and they are getting that as a lot of business’s are struggling and will not be employing in the near future.
The current government is doing pretty well from what was handed down to them from Labour’s incompetence.
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