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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37 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…
Equally you don't make substainal offers to rectify things unless something has been a bit wrong. And with personnel moving on and dodgy signatures.......
Our understanding is that you authorised the UDC team to apply your signature.
Good luck with that as a defence to forgery.
If there has been dodgy work by your company you should be bending over backwards to sort it. Yes, it might cost you. No quibbling.
UDC does not think like that.
Exactly, This is one hardworking kiwi, who has his eye on the ball, and UDC didn't. As I said the repossession of something he really needs for his business, is not helpful to their case.
How many, if any, companies think like that?
It's why they have Limited Liability. It may have been useful in the beginning to encourage risk, but like almost everything else, corporations and the humans running them seem to abuse their power and privileges.
All care and no responsibility.
I think they lost control of the situation (forging signatures) and so tried using repossession as a tactic to bankrupt him into settling for a lowball deal.
Hope he takes UDC to the cleaners...shocking story ..but not surprising in NZ.
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.
Sad how its gone from everyone making money...to everyone bleeding money...
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.
Communists!!!!
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.
Copy the Singapore model that rewards you for good health and drives best practice in the medical industry.
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.
Whilst not disagreeing with you, can anyone prove obesity is contagious?
Well, tell me the last time you saw a family where all but one member was obese/overweight (I joke)
With respect to parallels to Covid, if I recall the reasoning/logic behind the vaccination passport system (especially once it became clear that transmission still occurred but vaccination could reduce risk of severe illness) rested on the notion that basically we all had a duty to make it as least likely as possible that we would become seriously ill in the event of catching Covid, as that would reduce the strain on the hospital system.
I.e. if you didn't get vaccinated, and then got seriously ill and took up a hospital bed, that was a hospital bed that couldn't be used for a car crash victim or workplace injury or whatever.
In other words, while you might personally have been ok with the risk of catching Covid (unvaccinated) and becoming seriously unwell, you didn't really have that "right" to make your own health judgement based on your own level of risk tolerance as that potentially avoidable serious illness would result in undue pressure on the health system.
In that regard, dealing with obesity is no different IMO - if the same logic is applied.
Do you really have the right to eat yourself (and/or refuse to move yourself) to the point where you are placing yourself at undue risk of burdening the health system from obesity?
I'm of the terrible opinion that a drunk driver that has been injured in a crash they caused should be triaged into the "your're not gonna make it" section so unsurprisingly I'd agree with intervention in cases of self-inflicted obesity. Especially with our under pressure health sector.
Like a parent with a child.
Only works if the parent has the necessary skills and abilities, is able to be the example and provide right guidance.
Expecting and directing isn't the best if it's coming from a "do as I say, not as I do" attitude. A child must be guided to be aware of their behaviour and emotions. It requires the parent to have emotional intelligence, empathy, nurturing and compassion, not controlling and punishment.
Holistic health education (physical, emotional, mental, spiritual) needs to be encouraged right from the beginning.
The UK sugar tax simply resulted in manufacturers substituting artificial sweeteners for sugar. People still consume the same amounts of junk food and sodas. Nothing has changed, as artificial sweeteners also cause weight gain, along with things like metabolic disorders and cancer.
https://med.umn.edu/news/university-minnesota-led-study-links-long-term…
https://pubmed.ncbi.nlm.nih.gov/29159583/
https://pmc.ncbi.nlm.nih.gov/articles/PMC8946744/
The answer to the global obesity problem is not substituting crap food with different crap food.
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.
Of note re America and raw materials. 2024 Graphene and graphite, both needed in tech and military applications, China in 2024 produced over 98%.
How these 'rolling' tariffs are applied could be interesting watching from the sidelines.
The tariffs just might make it profitable to manufacture graphene from locally sourced coal.
The united states and australia continue to be "strong", I'm happy for them.
No problems with the Aussie job market absorbing all our top talent it seems. Nothing really changes regardless of who's running our government.
Thank you. It’s pleasing to see more and more comments like yours lending support to my proposed policy of abolishing central government in NZ. The time has come for change. We’re getting nowhere fast.
This would certainly be a step closer to user-pays, if locals have to fund their own infrastructure without getting money from central government (taxpayers). There wouldn't have been a $2 billion handout for Auckland after the floods, for example, just a rates rise.
USA retail sales. That as a rough average is $2500 per person spending in just one month! The size and attitude of that country is mind boggling.
what does retail include, at that kind of number , travel, food, obviously sporting goods and homeware, but with all the homeless in the US spending nothing, you have a lot of people spending hundreds every day.
Do I code tent under leisure or housing?
Both, it's clearly a holiday home.
If i call it a tent i can claim depreciation.
The US also gets 65-75 million tourists a year. They probably get wealthier tourists than NZ as well due to their luxury market which is non existent in NZ.
DC, the headline states "South Korea cut rates unexpectedly" yet in the article you state that South Korea unexpectedly held its interest rate...
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.
Could it also imply that they're at their "NRR", neither stimulatory or contractionary, that non-action by the Fed might be the best action, and it's up to the financial markets to adapt and adjust?
Is it the financial markets causing inflationary pressures with their demand for more and higher returns?
Too big to fail, reliant on central bank bailouts, demanding creative destruction everywhere else except within themselves.
Who rules whom?
Today marks one year since we moved to Australia. How have we gone?
Employment
My wife's earnings doubled, and she was fully registered in her profession (teaching) within a week of arriving. I retained my remote NZ job, but quit it just before the end of NZ financial year. I then had a break until the Aus financial year ticked over, whereupon I picked up a new role. I now work 1 day a week to make half my NZ income.
Accommodation
My wife's new colleagues found us a rental 3km from her work before we moved across. It is significantly more expensive than average here, yet still $300/week cheaper than our NZ rental.
Speaking of, our NZ landlords stayed true to form, and tried to claim for our full bond (as they had all their previous tenants). They claimed a decade's worth of wear and tear as "damages caused solely by us". They lost the TT hearing, their hearing for a rehearing, and it looks like they are now appealing. This process caused us some fairly significant issues, however (more on that later).
Costs/Bills
We have gone from $400NZ to $250AU for our weekly groceries. We shop at the local butcher, but get the rest of our groceries delivered.
Power is more expensive per kWh, but we have solar, and the warmer climate dropped our energy usage 3MWh for the year. Overall, our power bill halved. Gas is so cheap we don't even notice it.
We rarely spend money on petrol, so it's a non-event for us. But a considerable saving on the $80/week we spent in NZ.
Internet/phone is pretty similar to NZ.
Finances
My wife works in private education. She had the contract for her role (before we left NZ) within a week of enquiring if a role was available at her desired school (and after they'd flown her acrossfor an interview etc). This did, however, mean no relocation package - the move cost us ~approx $30,000.
Which is where our ex-landlords actions caused us problems. We were unable to purchase a car on landing, as we had budgetted on getting our bond back to cover our dog's kennel costs during transition (we had no inkling of the landlords intended action until they asked us to sign a blank bond refund form the day we moved out, which we refused). So the funds we would have spent on a car went on extra kennel costs, due to the awkward interaction between air flight lead times, kennel payment schedule, and monthly pay cycles. In hindsight, I should've got a short-term loan. It cost $11,000 all up to cover the dog's relocation.
We also couldn't purchase a vehicle on tick, as the finance companies would not recognize my remote income, and my wife had been in her role less than 3 months. Luckily our children also go to my wife's school (massive staff discount), so we walked, then biked, to school for the year, and just hire a car if/when needed.
IRD
The biggest problem (after landlords) was the IRD. A law unto themselves. They refused to count the student loan payments I continued to make after leaving as counting towards my required payments for being overseas. But at least they are contactable with almost no hold time (unlike in NZ where I'd simply get told the queue was full, please ring back later). I look forward to the day my student loan is paid off and I never have to talk to them again.
Summary
All up, we earn less than in NZ (but still more than double median household earnings here), but our costs are significantly reduced.
Moving without a relocation package is not to be taken lightly. On the other hand, we went from decision to landed in just on 10 weeks.
I have lots of free time - too much, I think, so I've enrolled in further post-graduate study outside of work. (Also, study here is ridiculously cheap as a Kiwi).
Our NZ landlords tried to steal our bond, but so far have failed.
We are very very fit from regular walking and riding.
We love it here, and have no intention of returning to NZ.
I still read Interest, because it is interesting :)
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