A review of things you need to know before you sign off on Thursday; Westpac matched BNZ at 5.99%, food prices show little inflation, TM sees very soft house buyer interest, swaps settle back, NZD holds, & more

This is not good and potentially disappointing. The China beef market is struggling and the CCP needs to protect its own. Our exporters might want to think about doubling down on Net Zero by Nature and other meat products to the US.

 China will launch an investigation into beef imports, the commerce ministry said on Friday, as the world's biggest meat importer and consumer grapples with an oversupplied market that has sent domestic prices to multi-year lows.

"Most beef cattle farms in China are in a loss-making situation," the China Animal Husbandry Association was reported saying in a state media report. "The impact of a large amount of imported beef is undoubtedly adding insult to injury."

The price of beef has fallen to its lowest level in the last five years, and the price of live cattle has fallen to the lowest in the last 10 years, the association said.

https://www.reuters.com/world/china/china-investigates-beef-imports-ove…

Soft end to 2024. Westpac’s customers spent only +2%. On the other side of that though what was bought was likely priced well above a 2% increase. From our wider family there was certainly a bit more restraint on the Xmas gifts and festivities. Paid more, got less. Not that consequential of course, but a bit of dampener on the spirit all the same.

Much of this is applicable to NZ, but not sure we can pivot to non china exports now....

How to shockproof the UK economy’s exposure to global risks

Mohamed El-Erian

As with US bond yields, the UK economy risks catching cold whenever anywhere else sneezes – but Britain can insulate itself better

The British government was right to describe the recent bout of market volatility in the UK as having been fuelled principally by “global factors” – in particular, a sharp rise in US bond yields. It was also right in touting how well UK markets have coped with the turmoil. But no one should downplay the additional challenges the UK economy will confront in the months ahead, the structural weaknesses that are compounding its vulnerability, or the policy action that is urgently needed.

The recent surge in US yields has three main causes: a string of data releases indicating that actual and potential economic growth are outpacing consensus estimates, higher-than-projected inflation (with a meaningful rise in consumers’ inflation expectations), and increased market sensitivity to the bond issuance that comes with large deficits and debt. Given that advanced economies compete for funding from global investors, it should be no surprise that higher US yields caused borrowing costs in most other countries to rise as well.

This effect was particularly pronounced in the UK, with 10-year government bond yields rising faster than yields in the US and, by a much larger margin, those in the eurozone. They will not fall significantly anytime soon; they could even rise further. The result will be higher borrowing costs for companies, households (including through mortgages), and the government – a development that will undermine GDP growth.

But there is more: despite these higher yields, the British pound has endured a pronounced depreciation. This development – which one is more likely to see in developing countries than in advanced economies – can intensify inflationary pressures. As a result, fears of stagflation are growing, even though the moves in foreign-exchange markets were relatively orderly.

The combination of higher yields and a weaker currency presents a particularly thorny challenge, because it impedes the government’s ability to mount a fiscal- and monetary-policy response. Higher debt costs eat up tax revenues, shrinking the government’s fiscal headroom and, potentially, raising the need for spending cuts, tax hikes, and/or increased borrowing. The inflationary effect of a weaker currency makes the Bank of England more hesitant to cut interest rates.

Beyond the immediate economic outlook looms a longstanding cause for concern. Though Keir Starmer’s government has been working to improve productivity, foster investment and promote durably faster growth, the British economy remains beset by long-term structural weaknesses that leave it exposed to external shocks. If anywhere in the world sneezes, the UK is at risk of catching a cold.

All this has fuelled a decidedly, and often excessively, unflattering image of the UK economy. The perception that it is a mire of sluggish growth, anaemic productivity and investment, deteriorating public services, high deficits and large debts will be difficult to dislodge.

In fact, as price movements and analyst commentary alike make clear, markets are not giving the government enough credit for its handling of the economic and budgetary mess it inherited.

Against this backdrop, Starmer’s government needs to do a better job of communicating what it is already doing to improve UK economic conditions – and it must do more. Messaging must be consistent, and it must address head-on the widespread, long-held, and excessive scepticism about the UK’s economic situation. And policy action must be timely and broad-based. While there is no magic bullet that would transform Britain’s economic outlook, a wide range of measures – extending beyond housing and planning to address more comprehensively infrastructure, research and development, innovation, skill accumulation, and labour retraining – can make a difference.

Strengthening trade linkages would also help. Current political and geopolitical realities suggest that these efforts might have to focus more on Europe and the US, and less on China.

The carbon price has slipped today by -60c to NZ$63/NZU and a new five week high

How does something slip to a high? 

"FOOD PRICES UP JUST 1.5%"

Pull my other leg, no way only 1.5%.

Yesterday I shopped at Pak N Save and a Feta cheese($5.75) wtf ? This was around $4 not long ago.

Salami hit $40/kg

The inflation is burning NZ$.

In other electricity news,Meridian''s Ruakaka BESS starts commissioning tomorrow reducing transport peak flow during winter.

Lodestone Energy in a statement on the commissioning of its Waiotahe solar farm,announced they will be bringing 5 solar farms to the construction phase during 2025 with installed capacity exceeding 800 GWh by 2028.

Lightsource with its community scale farms has 1 due to start this month,and a second in March,there after they will start construction of a new site every 2 months.

Biden may be old. But he's no fool. (I refer to his farewell speech.)

Now ... I am starting business to build high quality guillotines in the USA. Ten will fit into a container to be delivered and installed anywhere in the world within 24 hours. Who wants in?

[black humor. or is it?]

The 'Palestine Ceasefire' is a joke. Won't be honored, and won't last. (Read the text if you don't believe me.)

Oh how I enjoy the quality journalism from the (mega-rich owned) MSM ...

Debate erupts online over how to position your Weet-Bix in the bowl (seriously)

Seriously NZH, why would anyone pay to read your rag?

This is cool.

Huka Falls kayaking: Warnings as extreme athletes take on iconic drop

50 years ago I said this would be possible, and easy. I was told, no, canoes would break. I said 'plastics'. They said no, the bubbles would reduce bouyency and people would held underwater and would drown. I said, aqualung. They said, rocks below. I said, when the water levels are high.

Something new on my bucket list. Yeah !!!