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
No changes to report today - so far, at least. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
The only change today comes from TSB who cut -50 bps from the WebSaver account rate, reducing it to 2.95%. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
ENDING ANOTHER YEAR WITHOUT GAINS
QV says housing values are the flattest they've been in more than a decade. 'There's very little to suggest that house prices will suddenly take off any time soon,' they say.
ANOTHER CASINO BEHAVING BADLY
The Department of Internal Affairs has filed civil proceedings in the High Court against Christchurch Casinos for alleged non-compliance with the AML/CFT laws.
'PAYMENT SYSTEMS LACK CHOICE & INNOVATION'
According to an RBNZ survey of both written and online responses, Kiwis say cash is crucial and current payment options are not delivering what customers want. The RBNZ is concerned about the limited choices people have to pay, and the lack of competition and innovation in our money and payments systems. They propose making cash available in a digital format is "so people can get the combined benefits of both cash and digital payments in one product that is fast, direct, offline and secure". More here. However, most survey respondents told the central bank they saw no need for digital cash and were worried about it being used to track private transactions. Paper cash is essential for illegal transactions like buying illicit drugs, paying bribes, doing GST-free cashies, 'donating' anonymously, etc, etc. Opponents of digital cash hide behind 'privacy' concerns and 'libertarian' philosophy. These same opponents like crypto-currencies for the freedoms they supposedly give to engage in some types of activities. But fiat-cash is best for anonymity. They certainly don't want competition. It is unlikely the RBNZ will give their views much weight.
DISCONNECT BETWEEN SURVEY RESULTS & BBQ PERCEPTIONS
A detailed Treasury analysis of the data on income inequality trends from 2007 to 2023, shows a rise until 2013 followed by a decline in inequality to below 2007 levels. The study analysed different household types separately, helping explain why public perceptions of inequality sometimes differ from official statistics. Seniors had less inequality over the period. Not everyone obviously, but overall. (Please read the paper before you comment.)
THE AVERAGES DISGUISE SURPRISING STRENGTHS - AND WEAKNESSES
According to updated Worldline/Paymark data consumer spending was up in the first seven days of December, both on the previous week and on the first seven days of December last year. But the gains are marginal and are barely enough (+3.8%) to account for inflation (+2.2%). But there is unusually wide variation. Spending in the first 7 days of December was up strongest on last year in Hawke’s Bay (+9.1%), Wairarapa (+8.8%) and Gisborne (+7.6%). The annual spending growth was lowest in Palmerston North (+0.4%), Wellington (+0.7%), Bay of Plenty (+1.7%) and Marlborough (+1.7%).
PRICING ERRORS DRAW CRIMINAL CHARGES
The Commerce Commission is filing criminal charges against Woolworths and two Pack-n-Save supermarkets over allegations of inaccurate pricing and misleading specials. It is a move that will hasten the rollout of electronic pricing, and eliminate paper pricing labels, just to avoid mistakes that can draw this sort of regulatory action..
NZX EQUITY MARKET UPDATE
Here is a summary of how the NZX equity market traded today, as at 3pm. a2 Milk, Hallenstein Glasson, and Vital Healthcare top the gainers, with Auckland Airport, Kathmandu, and Infratil the main the decliners.
A JUMP TO A SEVEN YEAR HIGH
Farmer confidence has risen strongly on positive moves for commodity prices, interest rates. Farmers also now expect land price increases. Confidence flowing back into agri sector and the Rabobank sentiment survey shows it is now at highest since mid-2017.
BORROW TOO MUCH, BLAME THE LENDER
Federated Farmers released their predictable whine about "banks behaving badly". But you can't read this without realising that many farmers have just borrowed too much, and this survey shows they feel entitled to complain that it is someone else's fault when markets and/or business conditions go against them and they are not meeting their loan obligations. 84% of farmers have a mortgage and hate it that their lender won't "rearrange" things to their advantage. Banks requiring them to deal with excessive debt (or climate obligations) is labeled "undue pressure". (They are helped with a bully-pulpit by getting more ex-FedFarmers officials elected to Parliament.) To be fair, the survey shows more than half of farmers surveyed say they have a positive relationship with their bank.
COUNCIL TAX TAKE LEAPS
Data released today by StatsNZ on the level of local authority revenue from rates and regulatory income for the September quarter shows that it exceeded $10 bln for the first time ever in the year to September. On the annual basis is was up +10.3%. Compared with the same quarter a year ago it is up +11.2%. When we looked back into the data history we found these are the fastest pace of increases almost ever (they match an outlier in 2007). Obviously in dollar terms they are by far the fastest pace of increase, rising +$945 mln in the past year. (Maybe surprisingly, rates are rising faster than regulatory income. There has never been a period before where rates collected have risen as fast and at a pace exceeding +10%.)
PRICING CONCERNS
Fintechs could be stymied by costly and differing access to open banking application programming interfaces. The Commerce Commission says banks' high API pricing 'is damaging the nascent market' for open banking.
END-OF-YEAR WEAKNESS
In Australia, the November NAB business confidence index fell to -3 from a near two-year peak of +5 in the prior month, falling below its long-term average. We haven't seen such a big one-month negative shift since the pandemic.
RBA HOLDS
Update: As expected, the Reserve Bank of Australia kept its cash rate target at 4.35%. "Taking account of recent data, the Board’s assessment is that monetary policy remains restrictive and is working as anticipated. Some of the upside risks to inflation appear to have eased and while the level of aggregate demand still appears to be above the economy’s supply capacity, that gap continues to close."
UNBELIEVABLY FAST
Today, a technical announcement from Google/Alphabet on a quantum computing advance has the following claim: "Second, Willow [their new quantum chip] performed a standard benchmark computation in under five minutes that would take one of today’s fastest supercomputers 10 septillion (that is, 1025) years — a number that vastly exceeds the age of the Universe." We are in a new era of computing power.
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 down -1 bp yesterday at 4.32%. The Australian 10 year bond yield is up +2 bps from yesterday at 4.27%. The China 10 year bond rate has doved -5 bps to just under 1.91% and another all-time low. The NZ Government 10 year bond rate is unchanged at 4.49% while today's RBNZ fix was 4.46% and up +2 bps. The UST 10yr yield is now at 4.20% and up +2 bps. Their 2yr is now at 4.13%, so that positive curve is now +7 bps, with an unexpected rise.
EQUITIES MIXED
The NZX50 has fallen -0.2% in late trade today. The ASX200 is down -0.6% in afternoon trade. Tokyo has opened its Tuesday trade up a mere +0.1%. Hong Kong is up +0.9% and Shanghai up a stronger +1.3% on China's stimulus talk. But Singapore is up +0.5% at its open. The S&P500 was down -0.6% on Monday Wall Street trade.
OIL FIRMS SLIGHTLY
The oil price is up +50 USc from this time yesterday, now at US$68/bbl in the US, and just on US$72/bbl for the international Brent price.
CARBON PRICE SAYS DOWN
The carbon price is staying lower today at NZ$59.25/NZU and a four month low. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD FIRMER
In early Asian trade, gold is up +US$19 from yesterday, now at US$2664/oz.
NZD LITTLE-CHANGED
The Kiwi dollar is little-changed from where were this time yesterday, still just under 58.5 USc. Against the Aussie we are up +20 bps today at 91.4 AUc. And against the euro we are up +10 bps at 55.4 euro cents. This all means the TWI-5 is still just over 68 and little-changed from yesterday.
BITCOIN SLIPS
The bitcoin price has fallen to US$97,964 and down -1.6% from where we were at this time yesterday. Volatility of the past 24 hours has been moderate at just under +/- 2.9%.
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