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
SBS Bank, NBS, and UnityMoney all cut their 6 month to 2 year fixed home loan rates. WBS cut its variable and fixed rates too. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ cut many TD rates 1 year and shorter. They no longer have a 5% one year rate, in fact they now only have 5%+ rate for a 6 month term. Rate cuts also came from SBS Bank, WBS and AMP. All updated rates less than 1 year are here, for 1-5 years, they are here.
A DATA SURPRISE FOR SOME
Census data shows the proportion of people owning their own home is increasing. And renting is declining, according to census data that kind of cuts across the barbeque-conversation narrative that has been widely accepted.
"SUCCESSFUL TRIAL"
Since September, Foodstuffs NI has been conducting a trial using facial recognition (FR) systems to defer retail crime. Today, they released an "independent assessor's report". This final evaluation report by independent analytics firm, Scarlatti, which monitored and evaluated the trial, found there was “strong quantitative evidence” that the use of FR reduced serious harmful behaviour in trial stores by an estimated 16%. The Scarlatti report says a total of 1,742 FR alerts of offenders and their accomplices were generated across stores during the trial – an average of 70 a store – of which around 50% resulted in the person being approached. Scarlatti Director, Dr Adam Barker, said the 16% harm reduction was equivalent to around 100 serious harm events averted, including assaults, abuse and other aggressive or disorderly conduct. But the trial had some rough edges and there are a handful of disgruntled people who claim they were targeted and trespassed 'wrongly' as a result.
ANNOUNCEMENT DUE
Word is that the Government will release its plans on replacing the Cook Strait ferries next Wednesday, December 11, 2024. The strategy around rail capacity will be the key issue (in addition to the costs). That is sure to kick of a pre-Christmas bun-fight.
NZX EQUITY MARKET UPDATE
Here is a summary of how the NZX equity market traded today, as at 3pm. The NZX50 is flat today, finishing the week with a -1.5% decline. Oceania Healthcare, Mercury Energy, lead the gainers with Kathmandu, SkyTV, falling back.
LIVESTOCK DE-STOCKING CONTINUES
In the year to June 2024, the number of beef cattle was 3.7 mln, little-changed from 2023 but down -5.8% from 2020. The number of sheep was 23.6 mln, down -3% from 2023 and down -9.4% from 2020. The number of dairy cattle was 5.9 mln, up +1% from 2023 but down -4.5% from 2020.
MEAT MARKET UPDATE
Here is a summary from Prime Range Meats: "This week prices in China for mutton have been wavering as importers are starting to see more product becoming available and product sold now will be arriving after Chinese New Year. Strong interest continues for lamb in the UK and North America. The outlook for beef continues to be positive in the US while China prices are a bit more volatile. Australia’s two last remaining beef processing plants delisted from the China export market [during the Morrison-era trade tiff] have now been reapproved."
THE NEXT BANK PROSPECT
Fintech Revolut says it is applying for RBNZ banking registration, which would see it launch interest-bearing savings products, and a wide range of credit (debt) products.
NO CHANCE OF PAYING ANYTHING BACK
ANZ has been looking at what the Christmas eve HYEFY is likely to reveal, and they have flagged higher borrowing in the current ear by as much as +$2 bln taking them to a peak of $40 bln this year. That is not a signal of strength in the current fiscal policy settings. They also think additional borrowings will be required in the 2026/27 and 2027/28 out years.
EYES ON RBI
We have noted this before, but it has suddenly got worse. The Indian rupee has fallen -0.8% in the past week, -1.6% over the past six months, extending falls that compounds the long-running decline that started 45 years ago, but has gotten particularly problematic now. Most analysts are not expecting the Reserve Bank of India to cut its 6.5% policy rate when they meet today, probably fearful it will make the international value of their currency fall even further. But other metrics suggest a rate cut is probably warranted. (The rupee is also very low vs the NZD, but to be fair, it is at levels similar to the past ten year average).
BACK FROM THE BRINK
In Argentina, their central bank reduced its benchmark interest rate by -300 bps to 32% earlier today as part of efforts to curb high inflation. This decision follows a -500 bps rate cut the previous month and marks the eighth reduction since President Javier Milei assumed office in December. The central bank policy rate is down from 126% in October 2023. Inflation in Argentina is down from a peak of 292% in April 2024to 193% in October. Monthly inflation is however now running at an annualised rate of 32%. Many readers will remember Milei's election vow to dollarise the Argentine economy. That hasn't happened and probably won't now.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed yet again today. Most analysts don't see them falling much from here. Our chart below will record the final positions. The 90 day bank bill rate was also little-changed yesterday at 4.33%. The Australian 10 year bond yield is unchanged from this time yesterday, still at 4.28%. The China 10 year bond rate has fallen again, another -2 bps, to a new all-time low of 1.95%. The NZ Government 10 year bond rate is up +4 bps at 4.54% while today's RBNZ fix was 4.48% and up +8 bps. The UST 10yr yield is now at 4.18% and down -1 bp. Their 2yr is now at 4.15%, so that positive curve is still +3 bps, all little-changed ahead of the US non-farm payrolls report.
EQUITIES MIXED
The NZX50 has fallen -0.4% in late trade today. The ASX200 is down -0.5% in afternoon trade. Tokyo has opened its Friday trade down -0.8%. Hong Kong is up +0.2% and Shanghai up +0.1%. But Singapore is down -0.3% at its open. Wall Street ended its Thursday trade down -0.2% on the S&P500.
OIL SLIPS
The oil price is down -50 USc from yesterday, now at US$68/bbl in the US, and just under US$72/bbl for the international Brent price.
CARBON PRICE DROPS
The carbon price is noticeably lower softer today in live trade, now down at US$62.10/NZU and down -$1.25 in a post-government auction reaction. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DROPS
In early Asian trade, gold is down -US$28 from this time yesterday, now at US$2617/oz.
NZD SOFTISH
The Kiwi dollar is down -10 bps from where were this time yesterday, now at 58.6 USc. Where to from here? Westpac analysts say the USD is likely to rise in Q1-2025 at the expense of many others including the NZD. Against the Aussie we are up +10 bps today at 91.3 AUc. And against the euro we are down -30 bps at 55.5 euro cents. This all means the TWI-5 is now at 68.3 and down -10 bps.
BITCOIN EASES BACK
The bitcoin price has fallen to US$97,978 and down -2.0% from where we were this time yesterday. Volatility of the past 24 hours has been very high at just over +/- 5.5%.
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57 Comments
In the only crypto news that matters today, calls are mounting for the 'Hawk Tuah' girl to head straight 'tuah' jail after her memecoin/token turned out to be a massive P&D - with 95% of its value evaporating in mere minutes.
Had you invested (I use the term charitably) in 'Straight Tuah Prison' token you would have been much better off.
Having dabbled a little bit in memecoins - partly for the money, partly because it's funny - I wonder if this is the "top signal" for memes, as it has been getting MSM interest at least overseas, and hopefully interest will rotate into something slightly less deranged.
I'm not necessarily saying she did anything wrong legally by spitting on those bagholders (although I have seen - uncertain as to authenticity - some supposedly leaked private chat messages indicating she knew from the outset it was going to be a deliberate P&D).
I actually don't know whether launching some garbage meme token to deliberately P&D is against the law ... no idea, maybe depends on the jurisdiction etc. At the end of the day, especially with memecoins, every market participant is just hoping for the next even bigger sucker upon whom to dump their bag!
I just find it interesting - a true confluence of absurdity from all angles.
SPXTR measures the total return of the S&P 500. Looking at the returns from Jan 1999 to now:
+695%.
Not bad you reckon?
When measured in gold terms, SPXTR is down -17% since Jan 1999. That's right. It has depreciated in value.
Using the SPX Index alone (not Total Return), it gets worse: up 392% in USD terms, but down 49% in gold terms.
The water cooler mates called BS on this. I told them to do the math themselves.
Here it is. We feature from page 68 to 87.
https://www.taxpolicy.ird.govt.nz/-/media/project/ir/tp/publications/20…
I laughed when I saw a few of mine in there. My comments are generally top of mind and have little substance behind them, so wouldn't really suggest they form the basis of a sound submission.
Really they're just invoking thought experiments, stimulating critical thinking or just bating people into debates (debaiting?). I'll often just say something that can derail the main theme or idea into something else and it may or may not make a lot of sense after a small amount of scrutiny. In some cases people get upset about it, and that's pretty funny too.
My guess is it was Go Woke Go Broke given the use of the word envy. If not, this was still an interesting comment ... "in 1980 the submitter and partner purchased an old two flat property - a 1901 villa in Mt Cook central Wellington for $29,500 on joint salaries of $13,500 + $15,000. Forty odd years later in September 2021 it marketed for $1.5 M in 2024 it fell back to slightly over $1.0M". So a couples combined yearly salary was the cost of a property (actually two) in 1980, those were the days.
I cannot believe that Govt and RBNZ joining forces to crush the economy is leading to Govt debt going up by more than Treasury and Govt expected! I thought that we were totally different to every other country that has tried to cut its way to prosperity only to find that it leads to increases in public debt.
This is not rocket science folks... Govt put money into the economy when they spend and take it out when they tax. Banks pump money into the economy when they lend and take it out again when loans are repaid. So... what happens when Govt and banks put less money into the economy?
Expansionary Fiscal Contractions vs Keynes
https://www.downtoearth.kiwi/post/reading-advice-for-finance-minister-n…
Quality of government spending is also equally important.
The previous government shovelled billions into consultant gravy trains and back-end bureaucracy.
The fact that the big-4 consultancies slashed scores of consulting jobs, mostly in their Wellington office, within months of the change in gov says a lot. Not before they raked in hundreds of millions of taxpayer money over a short span advising on mega-mergers (health, polytechnics, broadcasting) and new agency set up (3-waters, Maori/Pacific health, etc.).
I didn't specify a solution, but thanks for making one up for me. Very gracious.
For what it is worth, my solution does involve Govt investing in systemic change to reduce business costs and our cost of living. This would involve....
- moving quickly and purposefully on electrification (we need to transition off oil as quickly as possible)
- changing our tax system to tax rentiers into near extinction
- guaranteeing young people a job, training, or education through to 23 (and then 25, 27 etc) - focusing on the skills we need and the work that needs doing across the country
- state-backed mortgages at a fixed rate for 25 years (eg 5%) to stop the stupid boom and bust cycle
- cheap RBNZ credit for building houses and infrastructure like the old days
- dropping corporate tax rates (replaced by a focus on taxing rentierism) and making NZ the best place to do business
- poaching the people we need and making the investments necessary to make our universities and research facilities absolutely world-class. Smart people want to live here - let's get value from that and stop the inverse snobbery nonsense
And you think the 'invisible hand' is better at picking winners?
Fun story about that actually. When Adam Smith mentioned the invisible hand (once) in his seminal publication 'wealth of nations', he was referring to the power of the community and business customers to stop businesses taking the pee and profiteering. His view was that businesses that exploited their customers would be chided and shamed by those customers and that this would moderate their behaviour. Ahhh.
New techology -I returned an empty trolley back to the trolly bay as the store didnt have what I wanted
I entered the exit the trolley starts ringing on me and stops moving, apparently is see you as having goods in your trolley without paying
From now on Woolworths I will leave trolly in store empty and walk away
All these things have a false positive rate. Normally it’s small per comparison, but once you multiply out the number of comparisons it does, people will be falsely accused. So you may have something to worry about even if you are law abiding, but probably worse for other skin colours.
Although just the threat of them being there would probably halve crime even if they very rarely acted upon it.
Is there any legal case you can make for false accusation? Defamation?
Really KH...? Just need to find the right one first
Woman wrongly kicked out over Foodstuffs facial recognition fail says she'll keep fighting
"Because I really don't want this to happen to anybody else and for my own selfishness, I have to, because I've never in all my life felt so powerless till I did that night, where I was in front of my son, embarrassed, trying to justify how I wasn't a thief," she told RNZ on Friday.
Her son had to see her "telling them it's not OK".
No. But silly conspiracy memes imported here are not welcome. You can get that at Alex Jones, or Fox & Friends. Go down any rabbit hole you want, but keep that stuff out of our New Zealand-focused service. That infection is not welcome on interest.co.nz. We will delete any of this stuff irrelevant to the NZ economy.
Shadow foreign affairs minister Simon Birmingham takes role at ANZ Bank after resigning from politics
Now why is news of an Aussie senator going through a revolving door of interest? Aussie journo Michael Pascoe notes about Birmingham
"Looks like a sell signal for ANZ to me. Birmo's done nothing but politics (and a little lobbying) since he dropped out of uni as a boy. Failed as Finance Minister. Failed as "moderates leader"."
No real experience in anything but lobbied hard against the Royal Commission into banking. Will be on AUD1 million+. Game of mates in action.
https://www.skynews.com.au/australia-news/politics/shadow-foreign-affai…
when house prices have been falling for what, 2 years now? It doesn't surprise me that more people are able to afford a home.
Yes interest payments are higher than they have been, but that just helps you save a deposit, and when house prices are not growing 10%, each bit of saving actually gets you closer to a 20% deposit, instead of your deposit getting smaller relative to increasing house prices.
Good to see people selling at auction
https://www.oneroof.co.nz/news/stressed-vendor-beats-the-bank-with-472-…
The headline reads:
Stressed vendor ‘beats the bank’ with $472,000 sale - but he still takes a hit
Unusual bush property with RV of $1.025m snapped up by “perfect” buyer.
And this bit of detail points to why we've seen so few mortgagee sales ...
He had been forced to sell before the bank stepped in and forced a mortgagee sale. The listing on OneRoof highlighted the seller’s plight and called on buyers to “bag a bargain”.
The mighty Chris Joye reckons that the Aussie government has contributed to more than 100 per cent of the 0.7 per cent average annual decline in Australia’s labour productivity growth since 2020.
Australia’s economic story has become dominated by public rather than private activity as politicians spend crazy amounts of money to buy votes to win elections. Over the past year, government has accounted for an extraordinary 82 per cent of all new hiring, leaving the private sector to take just 12 per cent of jobs. It is like we are living in a centrally planned state.
Back in 2000, the public sector only accounted for 22 per cent of existing employment. Today that share has exploded to 31 per cent.
https://www.afr.com/markets/equity-markets/public-sector-to-blame-for-a…
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