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 cut its fixed rates today. Kāinga Ora did too. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ made some more small TD reductions today. They are just the latest to do this. We have a review of where these rates have landed, here. Heretaunga Building Society also cut most TD rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
NOT THE EXPECTED BOUNCE
Monthly retail spending figures were flat in November, falling back from the strongest rise in months in October. Black Friday failed to put the fizz back into retail spending.
INTERNAL TALENT PROMOTED
Meridian said Neal Barclay will be stepping down as Meridian CEO in 2025, to be replaced by CFI, Mike Roan. Barclay has held the top job for seven years. Meridian is the second largest company on the NZX. It share price rose +12.5% over the past year.
VALUE FOR MONEY?
A blowtorch is going on the ACC organisation with "an independent review" ... "because of concerns about declining rehabilitation rates and increasing costs".
NZX EQUITY MARKET UPDATE
Here is a summary of how the NZX equity market traded today, as at 3pm. The NZX50 declined -0.8% so far with F&P Healthcare, Mercury, Meridian, and Skellerup leading the decliners and Spark, Turners, SkyTV, and Tower leading the gainers
ILLEGAL TRADE IN HFCs IS A THING
The EPA, Police and Customs have seized hydrofluorocarbon (HFC) gases valued at more than $1 million in a joint operation investigating illegal imports.
SHRINKAGE
Both the number of farms, and the land area being farmed, are apparently shrinking quite quickly. Updated StatsNZ data shows farm numbers fell from 70,300 in 2002. Twenty years later (the latest data), there were 47,250, a fall by a third. The land area farmed is shrinking too (despite fam consolidations). That was down by -15% from 15.6 mln ha to 13.2 mln ha. Those remaining are delivering products that underpin our exports, and there are no contenders yet that can replace them. Over the same period these exports rose almost +300% despite the lesser land use. They are what allows us to buy our cars, travel, (read this article on-line) and enjoy the products and services of the modern world. Just hope this shrinkage doesn't continue. The seafood industry is making good gains however.
STILL WILDLY POPULAR
Almost $1.5 bln was bid for the three NZGB bonds tendered today. 29 of the 84 bids won something. Yields were mostly lower by about -20 bps from the prior equivalent event for the two main maturities on offer.
AN UNEXPECTED IMPROVEMENT
In Australia, their employment rose by +35,600 in November from October, up +334,500 in a year. That is a +2.1% annual rise. Monthly, full-time employment rose +52,600 while part-time employment fell -17,000. These gains were enough to push their jobless rate down from 4.1% to 3.9%, and unexpected improvement. (New Zealand's jobless rate was 4.8% in September.) For some, this is a good-news-is-bad-news item because it probably pushes back an RBA rate cut even further. The ASX200 fell on the news.
GROWING FASTER
Meanwhile, Australia's population rose +2.1% in the year to June, adding +552,000 and taking the total to 27.2 mln. Victoria, Queensland and Western Australia all rose faster than the national average. Victoria grew the most, up +165,000 to just shy of 7 mln. NSW was next, growing +143,000 to 8.5 mln. (New Zealand's population was 5.35 mln as at September, and close to Queensland's 5.6 mln. In the past year, New Zealand's population grew by +65,000 or +1.2%.)
TIME ISN'T RIGHT YET
And staying in Australia, their central bank noted the relentless decline in th e use of cash, but said it is committed to keeping it. They aren't so sure about a CBDC, however. "Our current assessment is that a public interest case to issue a retail CBDC has yet to emerge in Australia. At the present time, we see the potential benefits of a retail CBDC as modest or uncertain, relative to the challenges it would likely introduce. However, as these trade-offs could evolve over time, and as more international experience comes to light, the RBA and the Treasury will continue to examine the issues." Taking action against high fee transaction costs on the existing payment systems seems to be their priority.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed-to-soft today. But the long end is sharply higher, so a serious steepening is underway. Our chart below will record the final positions. The 90 day bank bill rate was unchanged yesterday to 4.30%. The Australian 10 year bond yield is up +7 bps from yesterday at 4.31%. The China 10 year bond rate has fallen another -7 bps to just over 1.82% and yet another all-time low. The NZ Government 10 year bond rate is up +10 bps at 4.54% while today's RBNZ fix was 4.42% and up +4 bps. The UST 10yr yield is now at 4.28% and up +5 bps. Their 2yr is now at 4.16%, so that positive curve is now +12 bps, with another rise.
EQUITIES MOSTLY UP, EXCEPT THE ASX & NZX
The NZX50 has fallen -0.7% in late trade today. The ASX200 is down -0.2% in afternoon trade. Tokyo has opened its Thursday trade up +1.4%. Hong Kong is up +0.3% and Shanghai up +0.2%. Singapore is up +0.1% at its open. The S&P500 was up +0.8% on Wednesday Wall Street trade.
OIL FIRMS AGAIN
The oil price is up +US$1 from this time yesterday, now at US$70/bbl in the US, and up to just on US$73.50/bbl for the international Brent price.
CARBON PRICE SAYS DOWN
The carbon price is staying lower today at NZ$59.25/NZU and still at a four month low. But there is little-to-no trading going on. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD FIRMS
In early Asian trade, gold is up +US$7 from yesterday, now at US$2708/oz.
NZD MOVES LITTLE
The Kiwi dollar is up +10 bps from this time yesterday, now at 58.1 USc. Against the Aussie we are also down -30 bps today to 90.6 AUc. And against the euro we are up +20 bps at 55.3 euro cents. This all means the TWI-5 is now just over 67.6 and little-changed from yesterday.
BITCOIN RISES
The bitcoin price has risen to US$100,643 and up +4.7% from where we were at this time yesterday. Volatility of the past 24 hours has been moderate at just under +/- 2.4%.
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69 Comments
HB here. We had a 20 minute deluge on Monday afternoon, just under 25mm, but it was very localised so Hastings only reported about 5mm and some got none at all. Drizzling on and off today on a much wider scale but nowhere near as fierce, we've had 0.3mm. This rain all arrived the week after harvesting, c'est la vie.
We have a lot of feed on site so we're ok but the hills are definitely brown.
Tuesday maybe.... The Mrs drove from AKL to Hastings today to compete in a horsey event with daughter, expected rain but was only drizzle... parked up for 3 days now for the event, in hot muggy conditions. So glad I prefer sailing to horses. You can always swim off the transom. While some horse trucks present like a Beneteau ours is more Young 88.
I was holding off getting some heifer weaners but with this rain will have good hay so may go get some. After Angus or Charolais weaners... shame people cannot message, hoping people in HB get rain early next week.
The shrinkage in the acreage of land used for farming - down by 2.4 million ha in 20 years - is a bit of a mystery. It is reflected in the results of the Agricultural Censuses.
The mystery is that the area used for forestry hasn't increased correspondingly, and it seems unlikely that the "lost" 2.4 million ha has all been converted to urban use.
I did ask StatsNZ what they think has happened, but they don't have an answer.
Don't blame-shift.
You are the species that is in overshoot.
You are the one which has reduced wild animal biomass to 3% - yes 3% - of all biomass (the rest is us, and out attendant animals, and thanks to fossil fuels, we outweight the pre-human total - which was presumably the sustainable biomass).
But blame the defenders of the remnant, why don't you?
:)
Gold price punching through USD2,700 again. The mighty Ray Dalio has come out and said: "I believe that there would likely be a pending debt money problem. I want to steer away from debt assets like bonds and debt, and have some hard money like gold and bitcoin."
Throw that amongst the cheer at the Xmas parties and see what kind of reaction you get.
https://finance.yahoo.com/news/bridgewaters-ray-dalio-invest-gold-09300…
"Wholesale swap rates are probably little-changed-to-soft today. But the long end is sharply higher, so a serious steepening is underway."
Only if one is looking extremely short term?
The downtrend in the 10yr swap rate that started around Nov 2023 was confirmed between April & June '24 and re-confirmed in November '24. It would need to break through 4.25% and stay there for a reversal to be confirmed. If it doesn't, I'd expect the most recent low of 3.76% to be re-tested.
This comment won’t be well received by many but I think it’s entirely possible that we are back into an interest rate hiking cycle in around 18-24 months time (not a forecast..just a possibility that people should consider).
The long end of the yield curve is showing that central banks may not be able cut rates much further before inflation becomes problematic once more. And if they keep cutting they may find the inflation is back and then it’s time for more rate hikes.
Why can’t we just leave rstes flat for a while and let the dust settle I’m not sure - instead of dropping too low for to long then too high etc.
Strong Aust employment numbers today, they have no room to cut despite their real estate lobby whipping themselves into a frenzy.
And wage growth is anemic, outside the public sector. Productivity being crushed.
https://www.afr.com/markets/equity-markets/public-sector-to-blame-for-a…
Oz employment is improving (more partime work) however some more detailed poll results differ significantly from the Govt number
"Australian employment increased 183,000 to 14,430,000. This increase was driven by a rise in part-time employment, up 420,000 to 5,163,000 as the pre-Christmas and Black Friday sales period kicked off, but full-time employment decreased 237,000 to 9,267,000."
https://www.roymorgan.com/findings/9768-australian-unemployment-estimat…
Maccy B addressing Aussie Housing Minister Clare O'Neill who is tacitly admitting that the Aussie Ponzi is the be-all-and-end-all and that prices should not fall. How do you describe an economy where prices cannot fall? Planned economic model?
Poor Clare is being savaged across social media. I reckon the boomers don't give a rats and are happy with Clare's position.
https://www.macrobusiness.com.au/2024/12/housing-minister-we-want-house…
Well JC when everyone is stacked on one side of the boat.... bad things normally happen.
perhaps NZ and Aussies will move to Portugal and Spain to buy cheap, Europe could boom yet,
its so much cheaper then down here....
that 890k crapper 1 day auction would buy 491k Euros
OMG
Well JC when everyone is stacked on one side of the boat.... bad things normally happen.
They don't care. They will just allocate resources to hold the side of the boat up, regardless if the ship is largely immobilized.
And trashing your currency is enabling inflation.
I believe food and energy are scalable but that's based on scant, flimsy understanding. We've barely tapped into energy generation from the ocean (tidal, wave, Ocean Thermal Energy Conversion, Salinity Gradient Energy). The potential for ocean energy is immense; estimates suggest that wave and tidal energy alone could produce more than twice the current global electricity demand.
https://news.climate.columbia.edu/2017/02/14/tapping-into-ocean-power/
We cant build a hospital or port facilities...you think we may be able to build tidal generation and the associated infrastructure?
Not necessarily Aotearoa. China and Japan.
Japan’s new 330-ton subsea power generation system can float in strong currents to generate renewable energy.
https://www.popularmechanics.com/science/energy/a40221162/japan-kairyu-…
A work colleague looked into wave generation for our employer several (over ten) years ago.
He very quickly came to the realisation that the cost of maintenance outweighed the energy generated (ignoring the cost of building and transporting to site the generators in the first place).
So unless some miracle lubricant, corrosion inhibitor or material has been found in the intervening years, I'd tread very carefully when considering wave generation as a solution.
Spain and Portugal great value and excellent lifestyle. Fortunate to spend quite a bit of time there. Yesterday had an Auckland agent trying to convince me that a 30 year old uninsulated pig with lipstick on a site that will soon be uninsurable due to climate change was good value at $6m kiwi, so sent this link to demonstrate what that kind of money buys elsewhere…. https://www.rightmove.co.uk/properties/149399999?utm_campaign=property-details&utm_content=overseas&utm_medium=sharing&utm_source=copytoclipboard#/&channel=OVERSEAS. Most kiwis have no idea just how overpriced their housing is, let alone how much better the country would be if that money was invested productively instead
'The seafood industry is making good gains however.'
No, it is not. The referred-to puff piece is all about money, not about the rate of extraction, the reduction of nutrient or the collapsing of the food-web. Nor about the fossil input.
That's not 'good gains' - it's garnering digits on the back of an extraction.
The journalistic question is: Is this sustainable? And the answer - as with present-form farming is?
NO. So 'good'?
you may as well give up PDK
"Reducing the federal deficit, raising the long-term economic growth rate, and increasing the energy security of the United States would help all people. That bears note in light of President-elect Donald Trump’s nomination of Scott Bessent for treasury secretary. Bessent is a strong choice.
A highly regarded hedge fund manager, Bessent understands interest rates. He knows the federal deficit raises interest rates and weighs heavily on economic growth. When confirmed as treasury secretary, Bessent wants to push a so-called “3-3-3” policy. His plan is to permanently increase long-run economic growth to 3%, cut the budget deficit to 3% of GDP, and increase daily domestic oil production by 3 million barrels a day."
https://www.washingtonexaminer.com/in_focus/3245798/will-scott-bessent-…
Success is not required, the attempt is enough to bugger it all.
If you where serious PDK you would go off grid out at the Chatham Islands... its future proof compared with the mainland... plat trees for firewood go a bit of solar but go really dark off grid.... bows and arrows, spears for fishing... learn weaving etc.
Not taking the piss just saying I think you are as vulnerable as most of us.... raging hoards in all, you can only fire most shotguns 5 times between reloads.
If you separate yourself from society physically, can you still be a misanthrope?
Assuming we're not advocating mass extermination and starvation, aquaculture is of less impact than many other types of traditional protein farming.
You can't generate food without some energy, even if it's a dude harvesting by hand.
You can't generate food without some energy, even if it's a dude harvesting by hand.
100% this. I watched that series Alone, where they drop 10 expert survivalists into the wilderness and last one out wins a million dollars. Nearly all of them would be dead within a year, and they are the experts. They expend too many calories trying to get calories. Energy deficit. We are fucked without cheap and abundant energy.
Um ... Last time I checked almost all rocket fuels used nowadays are renewable.
For example, the SpaceX's Raptor engines burn liquid methane and liquid oxygen - both renewables. Cool thought? Cows powering SpaceX rockets. Who knew, ay?
Others use liquid hydrogen and liquid oxygen - both are produced via electrolysis using electricity from renewable sources. Kerosene and liquid oxygen are also used by SpaceX. And guess what? Kerosene can be made by solar energy, water and carbon dioxide.
More here: https://en.wikipedia.org/wiki/Rocket_propellant
Just quietly PDK, a little less ranting and a bit more research would further your - actually our - cause.
E-kerosene production would require a full 1/4 of all renewable energy production in Europe just to meet Europe's aviation use.
Even then it is assuming that renewable energy infrastructure does not need to itself be renewed. When you factor in energy costs of maintenance and replacement of the 'renewable' plant the actual energy costs are even higher.
There is no silver energy bullet. We had a one-off energy jackpot of fossil fuel, it's downhill from here.
Kerosene is used for lots of purposes.
For almost all of those purposes - there are renewable substitutes.
And for purposes where there no alternatives then there is e-kerosene.
Kerosene gets used (and wasted) because it is cheap. As the price of kerosene increases - using those substitutes become viable and more will be created.
The real problem is that we may fry before, or even after, that that point. The time to act was years ago. Making the carbon price much much higher would be ideal !!!
"The energy return on investment (EROI) of e-kerosene is between 0.4 and 0.5, which is similar to the efficiency of 0.5–0.6 calculated by MPP (2022) and Zhou et al. (2022). The EROI of e-kerosene is mainly dependent on the input electricity, which loses more than half of its energy during conversion and distribution. When used for propulsion, e-kerosene experiences additional losses of around 70%"
Say no more
Nice bit of cherry picking. Where is the link to the reference?
Why would I ask this?
In energy economics and ecological energetics, energy return on investment (EROI), also sometimes called energy returned on energy invested (ERoEI), is the ratio of the amount of usable energy (the exergy) delivered from a particular energy resource to the amount of exergy used to obtain that energy resource. ... To be considered viable as a prominent fuel or energy source a fuel or energy must have an EROI ratio of at least 3:1. Source.
That last sentence is an example of why the reference is required. For example, that last sentence is written in the 'now' and takes no account future requirements. Or put another way, it could have said: "In todays world, where fossil fuels are both cheap and plentiful, a prominent fuel or energy source must have an EROI ratio of at least 3:1." Nor does it account for fuel densities and transportability. E.g. electricity powered airplanes are unlikely around in numbers any time soon. (Caveat: small, slow city hoppers carrying 20 passengers of less may be quite common.) But it is still likely to make a lot of sense to transform electrical energy into high density liquid fuels even at EROI ratios of less than 1:1.
So lets pull apart a sentence you quoted without reference:
The EROI of e-kerosene is mainly dependent on the input electricity, which loses more than half of its energy during conversion and distribution. When used for propulsion, e-kerosene experiences additional losses of around 70%"
- input electricity :- The quote does not say how the electricity was generated, nor at what load time it was taken. Solar achieves EROIs between 8.7 and 34.2, wind is getting up to an EROI of 30 or more, hydro is over 100. (source as per above. Note tidal isn't even mentioned and its potential is absolutely friggin' enormous!) These energy sources are largely renewable. However, electricity surpluses are hard to store unless transformed into another type of energy, e.g. gravitational, rotational, chemical, etc. and losses are inevitable. e-kerosene would be a candidate.
- sunlight :- Sunlight is never even mentioned! For example, ETH Zurich's pilot project uses a sunlight driven reactor.
- loses more than half of its energy during conversion :- about as vague as one can get. I hope the reference you provide explain that statement in detail.
- When used for propulsion, e-kerosene experiences additional losses of around 70% :- This is a 'no shit Sherlock' statement as burning just about any fuel results in huge energy waste as unusable heat. Geez. Car engines - that they've been working on for years and years - seldom get above 70% efficiency and most are way, way below this.
So a link to the reference, please. Why? Some of the greenie analysis is childishly bad but lapped up by those that know no better.
Some more of ETH Zurich's pilot. https://ethz.ch/en/news-and-events/eth-news/news/2019/06/pr-solar-mini-…
EROI is not difficult to understand....less than one (in this instance around 0.5,or half) means more energy expended than is available....so to create your e kero will use twice as much energy as it manufactures.
https://www.sciencedirect.com/science/article/pii/S0048969723025044
Let me be Frank : "EROI is not difficult to understand"
That's hilarious and shows you know jack sh#t about the subject. There are so many definitions - often cherrypicked - as to what the 'formula' is for an EROI measure. Further, it is not helped by 'accountants' converting 'energy' into whatever current pricing structure they like based upon the current availability of current source stock and then pronouncing they have an absolute grasp of the the future.
Thanks for the link. I reviewed it over a year ago. It has some omissions, assumptions, errors and was probably out of date when it was published. Remember however, the authors are looking out to 2050 so that is understandable. It does contain some good stuff worth reading.
This biggest issue for papers of this kind remains the fact that:- for any one fuel, there are multiple uses - while for any one use, there are multiple fuels. No single fuel, nor use, can be taken in isolation as the 'mix based on both price and consumption' is going to change drastically, and rapidly over the next 30+ years. Supercomputers around the world are constantly working on constantly changing models to see what will happen. Given who is funding these exercises - the results are seldom published for public consumption and those that are working on them are bound by draconian NDAs.
A few years ago, ‘progressive’ ‘YIMBYs’ pointed to Tokyo / Japan’s permissiveness on density, and simplistically and conveniently concluded that this was why housing was relatively affordable there; a completely simplistic and misleading conclusion (but of course with some degree of truth to it).
Turns out, Tokyo at least isn’t immune to factors that have been at play in Australasia’s bigger cities:
https://www.japantimes.co.jp/business/2024/12/12/economy/japan-condo-pr…
Interesting read but I don't see how this article undermines the argument that permissive density results in better affordability. All it's saying as far as I can see is that the new build market is increasingly targeting the wealthy as there is more profit to be made.
Less permissive density would just make this trend even worse? No?
I think it does undermine the argument that permissive density results in better affordability.
Apartments are expensive to build and ergo they are expensive to sell. They are not affordable. They are also higher risk and developers need higher profit margins.
They have other benefits including adding to the diversity of housing, supporting centres and PT etc.
I am a fan of apartment development but I simply don’t believe it makes much if any difference to housing affordability.
Perhaps it can result in better living affordability if located close to employment, services etc. That is, housing costs are not lower and even higher, but transport costs much lower.
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