Here's our summary of key economic events overnight that affect New Zealand with news that despite it rising to its highest since June - to +2.9% and fourth monthly increase - financial markets have concluded US inflation is under control and Fed rate cuts are imminent. The key benchmark rates are easing back now.
But first, although seasonal factors push up American jobless claims at this time of the year, they actually rose more than those factors can account for last week. On a seasonally adjusted basis, initial jobless claims rose last week to 217,000 and above expectations of 210,000 and well above the 11-month low touched in the first week of January. There are now 2.3 mln people drawing these benefits now and well above the 2.1 mln at this time last year.
US retail sales were up +3.9% in December from the same month a year ago, and the fourth consecutive month-on-month rise. That takes it to US$795 bln for the month, a new record high for any month.
Yesterday we noted the unusually large drop in the New York Empire State factory survey. Today we can note an unusually large rise in the Philly Fed factory survey, the outsized surge driven by new orders and the biggest jump since June 2020 and the pandemic distortions. Prior to that, it is the biggest one-month jump ever, taking the level to its highest since 1984 so a 40 year high.
In Canada, December housing starts came in at a disappointing level and undershooting the 2024 average.
The Bank of Korea unexpectedly held its key interest rate steady at 3% during its January 2025 meeting, defying market expectations of a -25 bps cut. This decision followed back-to-back rate cuts in previous meetings, made in response to a slowing economy, moderating inflation, decelerating household debt growth, and growing political uncertainty. The move also occurred against the backdrop of a weak currency.
In China, leading property developer during China's boom years, Country Garden has now taken a place among the largest money losers in the country and the world, marking another grim milestone in their real estate meltdown. They have finally just reported their 2023 loss as -¥174 bln (NZ$43 bln) - although to be fair that is 'minor' compared to the giant -¥476 loss (-NZ$115 bln) that Evergrande reported in 2021.
The December labour force data for Australia brought a +56,000 gain in jobs. But there was apparently a tough twist. +80,000 of these were part time, and full-time jobs shrank -24,000. But these are the seasonally-adjusted numbers. In actual fact, total new jobs (actual) were +119,000 with +72,000 full-time and +46,000 part-time. So on the ground there was actually no backsliding and many more people were actually in paid employment. Their jobless rate ticked up to 4.0% s.a. and 3.8% actual. The strength of this data has some doubting they will ever see an RBA rate cut.
And Australia said that in the year to October (their latest update), +161,000 permanent and long term people arrived into the country. That is +12.3% more that the same 2023 year. But another 149,300 citizens returned in the year, although that was more than -6% less that the year before.
Containerised freight rates slipped -3% last week with the heat right out of the China to USWC trade now that the new US Administration with its threatened tariffs is about to take office. Bulk cargo rates rose +8% in the week to be -22% lower than year-ago levels. They seem to be settling in at an historically low level.
The UST 10yr yield is now at just on 4.61%, and down another -5 bps from this time yesterday. The key 2-10 yield curve is less positive, now by +37 bps. Their 1-5 curve is also less positive at +23 bps. And their 3 mth-10yr curve has flattened too, now to +31 bps. The Australian 10 year bond yield starts today at 4.54% and down -14 bps. The China 10 year bond rate is now at 1.65% and up +1 bp. The NZ Government 10 year bond rate is now at 4.76% and down -10 bps.
Wall Street is in its Thursday session and virtually unchanged on the S&P500 and holding its inflation relief rally. Overnight, European markets were quite mixed with Paris up +2.1% but Frankfurt only up +0.3% to bookend these markets. Tokyo ended its Thursday trade up +0.3%, Hong Kong was up +1.2% and Shanghai was also up +0.3%. Singapore rose +0.8%. The ASX200 ended its Thursday up +0.8% while the NZX50 ended up +0.4%.
The price of gold will start today at US$2719/oz and up +US$31 from yesterday, and moving back toward its record high of US$2790 it reached at the end of October.
Oil prices are little-changed from yesterday at just under US$79/bbl in the US while the international Brent price is now just over US$81.
The Kiwi dollar starts today just on 56.2 USc and up +10 bps from this time yesterday. Against the Aussie we are unchanged at 90.3 AUc. Against the euro we are down -10 bps at 54.5 euro cents. That all means our TWI-5 starts today just on 66.9 and down -10 bps from yesterday.
The bitcoin price starts today at US$99,264 and up a mere +0.2% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.8%.
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26 Comments
Something does add up, you dont repossess something unless you know you are in the right. the risk is too high
https://www.stuff.co.nz/nz-news/360540290/udc-finance-accused-forging-c…
Certainly time for a good KC however going public would suggest a sort of “Fair Go” approach. This in turn may be seen as being prejudicial? Who knows but like you I would really see this as an opportunity to set a much required example, an exposure of arrogant and corrupt practices, pounded out in court and a warning to others of the same ilk. Commerce Commission should be taking a hard look too.
The signatures is a side issue, the main issue is that the deal was fixed term , fixed interest, and the rates and terms were discussed and agreed, by someone who it appears was acting outside their authority. It's a UDC problem, their staff , their problem. Give the guy his machine back now, or face even bigger consequences.
NZ is now the third most obese country in the OECD, up several places in the past couple of decades.
Some tried and tested solutions out there can be applied. The UK effected a tax on sugar nearly 7 years ago.
New research has shown that the levy has led to a significant drop in the amount of sugar in people’s diets across the UK, with the amount of sugar consumed by children and adults from soft drinks decreased significantly, by around a half in children, and by a third in adults.
Haha. A Harvard study found that metabolic diseases make up 20-35% of total healthcare spending across Western nations.
Much of this spending can be avoided leaving more in the funding bucket for those in genuine need of healthcare services. We therefore need to make sure there is short-term incentive (or disincentive) for people making poor lifestyle choices to either do the right thing or pay their way.
With a public health system one would think this would be an absolute must for NZ.
If you want nanny State providing for you, then nanny State surely has a right to expect or direct certain behaviours. Like a parent with a child.
Alternatively, abolish public health, eat what ever you want and pay for your health requirements yourself.
100%.
Covid showed we can do it anyway - just declare an emergency, and then apply appropriate "pressure" to shape a public health outcome. Surely everybody who supported those measures should be in favour of doing the same re: the obesity epidemic.
It seems to be a pretty damn big emergency to me that so much of the health system budget is chewed up on costs that could be eliminated or otherwise hugely mitigated by people eating less, or eating healthier food, or exercising more, or any such combination.
In fact, without solving this issue can we ever truly "catch up" on the funding and capacity of the health system?
Maybe Socrates was on to something when he said "no man has the right to be an amateur in the matter of physical training."
All sorts of potential solutions ranging from increasing the costs of unhealthy food, through to totally-not-forced-but-there-are-consequences-if-you-don't-comply Ozempic injections.
The manufacturing stats out of NY & Philadelphia differ sufficiently to suggest some distortion in the reporting. What is real though is here is an illustration of the size of the massive market American producers have right on their doorstep and a market the rest of the world wants to buy into. In turn that illustrates Trump’s mantra that the world needs the USA more so than the other way round. Except of course there are now vital things that the USA no longer or never has produced not to mention certain minerals and other raw material. Thrusting even more punitive tariffs in amongst all of that is really going to be distortional and test that mantra.
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