Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes announced today.
TERM DEPOSIT RATE CHANGES
China Construction Bank is now offering term deposits. It's rates are higher than any main bank, and higher than most challenger banks as well. They range from 0.55% for 3 months, 1.00% for six months. 1.25% for one year, and 1.40% for four years.
PUBLIC HOLIDAY
It is Australia Day (or in some circles, Invasion Day) across the ditch. Market volumes will be low as a consequence.
'UNDER PAR'
Activity in our services sector improved in December from the previous month, but still recorded contraction, according to the BNZ-BusinessNZ PSI. New Orders abated to 50.2, from 52.0 in November and 57.2 in October, while Supplier Deliveries were still very weak, at 39.5. The Retail trade is still a drag on this sector as well.
COME BACK IN A MONTH
We were to get December credit card data changes today from the RBNZ, but the failure of its secure file transfer system means this isn't happening today. It may take a month or so before things on that front are back functioning normally.
ASSESSING THE BALANCE BETWEEN DEBT & EQUITY
Fonterra is reviewing its 'capital structure', a thing it acknowledges means different things to different people. As part of this, it is surveying its farmer shareholders for their views.
A CHALLENGE TO THEIR TARGET
Genesis Energy (GNE) updated the market on its operating performance today. It wasn't 'pretty' mainly because it is essentially an electricity producer from thermal sources (Huntly and Kupe) and has committed to huge reductions in carbon emissions, by at least -1.2 mln tonnes by 2025. But low lake levels in parts of the South Island meant its Huntly coal-fired station was increasingly used, generating 650 k/tonnes of CO2, and +11% more than expected.
ANOTHER COMMODITY FALLS SHARPLY
The price of the precious metal rhodium fell sharply overnight, losing -9% in the trading session. This is a retrenchment after a very strong rise in 2020 from US$2,500/oz to US$19,500/oz. Rhodium is mainly mined on South Africa and has mainly industrial uses.
NEW TEAM, NEW TALENT
Kiwibank has been bulking up its people, skills and capacity on its digital side. This comes after some bad and costly stumbles a few years ago to its core banking systems.
UPGRADED
Trade Ministers for New Zealand and China today signed an upgrade to the free trade agreement between the two countries. This means that by 1 January 2024, all New Zealand dairy exports to China will be tariff free. It also eliminates tariffs on almost all wood products. It removes some border delays. It also improves services trade access. And it introduces new environmental standards.
FAST DEMOGRAPHIC SHIFTS
In Hong Kong, data is about to be released showing they recorded more deaths than births in 2020 for the first time, in what experts said was a warning of an imminent decline in the city’s overall population. Emigration isn't helping either as Beijing tightens the screws. Singapore is facing the same demographic trends, but is not yet in negative territory. Further out, China is expected to "grow old before it grows rich" with a very-fast slowing in their birth rate.
GOLD PRICE SLIPS
Gold is trading in Australia, and soon in Asian markets. So far today it is down -US$2 from the end of trading in New York, down to US$1854 and that was the same as the closing level in London.
EQUITIES UPDATE
The S&P500 ended its session today up +0.4%. The ASX is closed today for a public holiday. The NZX50 Capital Index is down -0.4% in late trade. In Shanghai, they have opened down -0.6%, Hong Kong is down -0.7%, and the Tokyo market is down -0.7% all in very early trade.
SWAP & BOND RATES SOFT
We don't have today's swap rate movements yet. If there are material changes when the end-of-day swap rates are available today, we will update them here. The 90 day bank bill rate is unchanged at 0.29%. The Australian Govt ten year benchmark rate is down -4 bps at 1.03%. The China Govt ten year bond is up +3 bps at 3.18%. The New Zealand Govt ten year is lower by -3 bps at 1.04% but still above where the earlier RBNZ fix was, at 1.03% (-3 bps). The US Govt ten year is down -5 bps at 1.04%.
NZD FIRMS AGAIN
The Kiwi dollar is now at 72 USc and slightly firmer than its open this morning. On the cross rates we are marginally firmer against the Aussie at 93.3 AUc. Against the euro we are slightly firmer too at 59.3 euro cents. That all means our TWI-5 is up over 73.3.
BITCOIN HOLDS
The bitcoin price is very little-changed from this time yesterday at US$32,575.
This soil moisture chart is animated here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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55 Comments
Why not buy ShitCoin (SHIT), it is capped at 1 trillion coins. https://www.coingecko.com/en/coins/shitcoin
Price is good too: $0.00000000 US
Great article Galloleous. It describes the exact same reasons I moved the majority of my cash reserves into BTC back in March 2020.
While an ounce of gold was valued at $20 USD in 1920, that same ounce of gold is now worth close to $2,000 USD
Increasingly Bitcoin seems to be a good indicator of the value of the USD in a world that's gone financially crazy. Because of it's fundamentals and immutability it's a new standard for real value, measuring how fast the purchasing power of fiat is dropping. A life-raft in a financial sea of shipwrecks.
Xi To Davos: If You’re Waiting For Us, We’re Waiting For You
We are going through the worst recession since the end of World War II. For the first time in history, the economies of all regions have been hit hard at the same time, with global industrial and supply chains clogged and trade and investment down in the doldrums. Despite the trillions of dollars in relief packages worldwide, global recovery is rather shaky and the outlook remains uncertain. [emphasis added]
Hey I agree they are doing a great job, amazing that there have been so few cases of community transmission. But we have also been lucky that the last few community cases haven’t spread it. Although in a way we were also unlucky that that Auckland case last year did spread so far.
It is the height of summer, temperatures are soaring, viruses don't seem to fare as well in hot weather, being more on their game in colder weather, which we should take as a warning once the heat starts to die down. We need to get our you-know-what together where tracing, distancing, hand washing and mask wearing where appropriate goes, because when it comes right down to it, it will be US that provides the most impenetrable barrier to the virus.
Not sure the Nats had much to do with it did they, I thought it was required as part of the council amalgamation. From memory Bill did make his views known and that may have swayed the outcome, but in the end wasn’t it up to the independent commission to make the decisions?
Maybe, but the Nats also did more damage than labour. A lot of the damage was done in the years after the GFC where developers didn’t have confidence to build. That would have been a great time for the Nats to build state houses or at least provide assurances to developers, but they were too obsessed with public debt and austerity and bailing out finance companies. I know a few tradies who’s companies went under during the GFC as demand dried up. All easy enough in hindsight of course.
There's enough houses in NZ already for the population. Many are empty, or rented out as air bnbs though. The sentiment from Collins is nice but it's a long term solution and we need a short term answer. If the government/opposition were serious they'd start with an audit (power consumption by domicile would work). Then, based on the outcome heavily tax underutilisation.
The proceeds of new taxes could go toward reforming the RMA, funding more education for young people wanting a trade and breaking up the building materials duopoly.
Regardless, air bnbs should be paying through the nose to operate. They're a scourge on NZ in a housing crisis.
Air BNBs are just providing holiday accommodation in the same way hotels do. What’s wrong with that?
I’m not convinced we have built anywhere near enough houses considering the immigration levels we have had. For a reasonably long period during Nationals term there were almost no houses being built yet they had close to 100k people arriving every year.
Nothing wrong with it when we're not in a housing crisis. But if it goes against the national interest, people should have to pay a premium which goes back into the coffers to balance that out. And if that's too hard on the investor, the stock would return to the long term rental market or be sold to an owner occupier, which is where the majority of stock in a healthy economy should be.
There's anecdotal evidence of a bunch of empty houses in wealthy Auckland suburbs. Quite likely purchased by wealthy Chinese mainlanders getting their cash out of China, which was going on for a number of years before we started recording foreign purchaser details. Unless we do an audit of our current stock, it's just a bob each way guessing.
Problem is, most "investors" are Mum and Dad outfits who haven't the motivation nor expertise to build. Everyone who can, is building already right now.
What are you suggesting as an alternative? We should just sit on our hands and let the status quo continue I suppose. How many rentals do you own Jimbo?
I own none, to fully disclose I have stayed in two air BNBs though, they were very convenient for a family compared to hotels.
I think they should put up interest rates, it’s by far the easiest thing to do and will have by far the biggest result. Robertson could decrease the RBNZ inflation target for example.
"Air BNBs are just providing holiday accommodation in the same way hotels do. What’s wrong with that?"
Nothing as long as the house is rezoned commercial and paying commercial rates, and commercial insurance, and up to commercial fire regulations. Has a building WOF, etc etc.
1/4 Ex-CIA software engineer, Joshua Schulte remains in detention & under Special Administrative Measures, after a jury failed to convict him on espionage related charges for allegedly leaking #Vault7 to WikiLeaks. Julian Assange is expected to be subjected to SAMs if extradited. Link
American Dystopia – The Propaganda Mask and the Utopia Syndrome
https://www.rnz.co.nz/news/business/420160/meridian-spilled-water-to-hi…
Apparently Meridian claim high environmental practices according to their severely greenwashed website. They are directly responsible for an estimation of 6000 tonnes of carbon emissions as a result. Cost to you and me? Only $80m... their fine was pathetic from memory, a slap on the wrist that would certainly not disincentivise the behaviour.
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