Here's our summary of key economic events overnight that affect New Zealand, with news geopolitical risks remain high but they don't seem to be escalating from here, and markets are taking that as a positive signal. But benchmark interest rates are back rising again.
First up today, global banking giant HSBC has announced a doubling of its profits in Q3-2023. They made NZ$13 bln in the three months to September, benefiting from higher global interest rates.
Second, General Motors has apparently settled its dispute with its union who have been on strike, the last of the big three American carmakers to resolve the dispute. It appears, like the other settlements, the UAW has prevailed in all its substantive claims.
In Japan, all eyes are on their central bank who later today are expected to make a significant shift in policy and let some of their interest rate targets rise.
The World Bank has been assessing the prospects for commodity prices. It sees oil prices falling away - assuming we avoid a sudden supply-constrained geopolitical shock. Their base case has oil falling from here, to the low US$80/bbl range. But in their worst-case scenario they see US$150/bbl oil. They also see food prices falling as rising supply more than makes up for rising demand. An exception is for rice. But they are not seeing price being a threat to future global food security out to 2025. In the current circumstances, they have a very sanguine outlook - with the usual caveats about unexpected shocks.
Meanwhile, EU sentiment continues to weaken. It recorded a slight decrease from the previous month and came in lower than expected even if the change was minor. This is the weakest it has been since November 2020. The combination of persistent inflationary pressure and the ECB's extended policy tightening has exerted a dampening effect everywhere. In a week or so we get the next ECB inflation expectations survey.
And there might be some relief in store. In Germany, and with the help of easing food inflation, their October CPI inflation rate fell to 3.8%, sharply lower than the September 4.5% rate. The October rate is their lowest inflation level since August 2021.
Meanwhile, the German economy was expected to shrink by -0.3% in Q3-2023 but the actual result was a -0.1% retreat - and prior quarter falls were revised into slight rises. This was a very much 'better' result than expected, despite its negativeness, and markets were 'impressed'.
In Australia, September retail sales rose more than expected to be +2.0% higher than a year ago, pumped by the +0.9% rise in September from August. The year-on-year result is far less than inflation but the more recent rise is sharpish and may encourage the RBA to hike, thinking that along with earlier +5.6% monthly inflation indicator data, the risks of waiting for are not worth taking.
The UST 10yr yield is up +4 bps from this time yesterday, now at 4.89%. Their key 2-10 yield curve is less inverted again, now by just -14 bps. Their 1-5 curve is inverted by -61 bps and that is less. Their 3 mth-10yr curve inversion is less too at -50 bps. The Australian 10 year bond yield is now at 4.97% and up a sharp +15 bps from yesterday. The China 10 year bond rate is little-changed at 2.73%. The NZ Government 10 year bond rate is +4 bps higher at 5.59%.
Wall Street has opened its week with the S&P500 up +1.1%. Overnight, European markets all up by about +0.3%. Yesterday Tokyo ended its Monday session down a sharpish -1.0%. But Hong Kong ended unchanged after a building recovery through the day. Shanghai ended up a minor +0.1%. The ASX200 ended its Monday session down -0.8%, while the NZX50 ended down -0.2% in an attempted late recovery.
The price of gold will start today at US$1998/oz and down -US$6/oz from this time yesterday.
Oil prices have fallen -US$3 today to be now at just over US$82/bbl in the US. The international Brent price has fallen a bit more now just under US$86.50/bbl.
The Kiwi dollar starts today at 58.3 USc and marginally firmer from yesterday. Against the Aussie we are softish at 91.6 AUc. Against the euro we are still just on 55 euro cents. That all means our TWI-5 starts today again unchanged at just under at 68.2.
The bitcoin price starts today at US$34,473 and up just +0.2% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.0%.
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97 Comments
https://i.stuff.co.nz/national/immigration/132814451/company-linked-to-…
not a good look for immigration nz.
Māori silence about immigration is puzzling. Maybe the voice of Māori is the voice of a trendy elite who are more interested in preaching to non-Māori than listening to those they claim to represent. However Ranginui Walker did discuss it thirty years ago. But that shouldn't bug you since it is entirely up to Māori as to what messages they have for the rest of us.
What's bugs me most about immigration is the thundering incompetence of INZ but that can be explained by their having no choice but to impose unofficial quotas via mega-bureaucratic delay because our govt has given them no population plan. Incidentally INZ's bureaucratic delay is a system that is as unkind as possible and also discourage potential skilled and experienced immigrants that NZ needs while leaving the desperate hanging on in low-paid employment until they gain residency.
I'm an immigrant and so are my family. That should be something we ought to be able to boast about; proof that we are members of a privileged group.
They have not been silent, true. In addition to the example you highlight (Ranginui Walker) it's also easy to find their calls for being involved in the discussion and the policy to ensure their interests are taken into account: https://www.stuff.co.nz/business/93406703/authors-call-for-maori-intere…
Singautim's comment comes close to it. Immigration is not an economic policy. The numbers are concerning and the level they are aimed at. I simply struggle to see any level of real benefit to the country. My concern about Maori silence is because they have negotiated themselves into a position to make some real differences but none of them seem smart enough to know what is happening and its potential consequences.
What do you mean by "NZ silence"?
I think what Murray means is that we have imported low wage workers in very large numbers for the better part of a decade. We can all agree that the low-income households bear the brunt of such policies with increased wage competition at the lower end of the spectrum and clogged up public services/infrastructure. Why Māori - because they are disproportionately represented among low-income households.
Also, the fastest growing minority in NZ is Asians and some of those communities overwhelmingly support centre-right parties. I wonder how instrumental Jacinda's 2021 residence visa programme was in centre-left's loss in the recent election. I reckon if with this migration trend continuing, the left will either have to move to the centre (drop social justice/co-governance policies) or remain in Opposition for a long time.
As per an RNZ poll in Sep-23, ~85% of Chinese constituents supported Nats, ACT or NZF. A couple of years ago, I saw polls with similar results for the Indian community (though slightly less right-sided than Chinese).
It's a lot more complicated than that. We need more labour of all level's, from labourer's through to doctor's. The output gap has created serious cost of living pressures but greater immigration is not the magic bullet for a few different reasons.
Maori as a whole have a larger rural population and are therefore less directly impacted by soaring inner city rents and traffic jams. I cannot speak for everyone of course but you do have to pick your battles and Maori are no different, we cannot fight every single issue.
Also, the stereotype that Maori are low income is becoming stale. I work with Maori law firms, audit firms, consultants and tradies. You might be surprised just how much progress has been made.
TK
How about we reduce the size of govt and local bodies.... and redeploy to more productive endeavours ??
Govt seems to be good at creating regulations and taxing.... I suspect that has more to do with a ,so called, out put gap .. rather than a shortage of people ??
I don't pretend to have the answers, every country has to make decisions about taxation and where to spend. It seems every Western country is battling culture wars and identity politics and generally lacking in good leadership. Everything is partisan, everything is binary. Social media and media in general is a big part of the problem.
My personal view is we need to invest more in education.
Tk.... I'm reading an Alan Duff book at moment.
Education is a very big deal.
So is breaking the cycle of child abuse, that a minority of parents raise their children with.
Institutional solutions don't work... A community level approach might be the way.
Duff makes sense.
Stats published by various government bodies suggest the weekly income for Māori is considerably lagging behind the average for all ethnic groups, and our indigenous people have poor outcomes on child poverty, access to decent housing and unemployment. Latest release of child poverty statistics – corrected | Stats NZ, Socioeconomic indicators | Ministry of Health NZ
I meant our clogged-up healthcare and underperforming education system when I said poor infrastructure outcomes due to rapid population increases; significantly more just inner-city traffic.
I suspect those Māori law firms, audit firms, tradies and consultants are all based in urban areas, far away from the majority of Māori people who predominantly live in rural areas as you mention.
Really TK? Read my response to Yvil further down. But your response smacks of disrespectful racism. My point is that immigration is not an effective economic policy, but we have a significant number of Maori who put themselves out on media as politicians suggesting they have taken up the taiaha of politics. If that is the case, just as for any other politician, I expect them to speak for and act on behalf of the people they claim to speak for. Maori haven't created this problem where the consequences of immigration policies has been to undermine wages and living standards but they will certainly be victims of the consequences. Maori politicians have the opportunity to step up and speak for the less wealthy people of the country initially in the name of their own, but speaking for all to challenge the immigration policies and call them for what they really are. Or have they been too captured at the trough of self entitlement like most if not all the other politicians? Is that the standard of leadership we can expect from there too?
Bluntly TK I think the Greens are just incompetent and far too self entitled. When I analyse their policies for outcomes, there is rarely anything substantial in them for the real people of the country. When considering environmental and climate issues they are just worse.
Murray, you seem to be blaming Maori for not doing anything about excessive immigration. I simply suggest it's a NZ problem and I don't understand why you make it a Maori issue.
Frankly I'm surprised by your question "what do you mean by NZ silence" (instead of Maori silence as you put it)
"I took concern about "NZ silence" to mean the views of non maori"
That's a very interesting comment KH, so clearly, you view "NZ" as "non Maori". To me "NZ" means ALL of NZ, no matter if people are Maori, Asian, of European descent, Black etc... Making a separation between NZ and Maori seems racist to me.
I'm not blaming Maori for anything. They haven't created the problem, but they will certainly, ultimately be victims of the consequences of it. For those Maori who choose to take up the taiaha of politics, they need to understand they have appointed themselves as representatives of their people, not just the elites, and not to just hob nob with other, self appointed elites. So just like all our other politicians I expect them to represent the real interests of the people they claim to speak for. To argue that they have other things to be concerned about, like what? My view is about people being able to get decent jobs, be paid a decent wage and have decent working conditions and so on. These aspects have been progressively undermined since 1984 when the 'free market' economic policies began to be introduced. They affect every one, but Maori disproportionately more so.
What a load of BS Yvil! I do not view NZ as Maori and New Zealand. That attitude is just arrogant. Maori and Maori politicians are a subset of New Zealand and irrespective of their origins they have an opportunity, which they have put themselves forward for, to speak for the people of NZ. Maori politicians claim to speak for Maori, and as Maori are disproportionately represented in poverty and other stats when they talk to the effects of policies that impact on Maori, they effectively talk for all low socio-economic groups. Every politician irrespective of their origins have the same opportunities. I am putting aside treaty issues here and talking about the effects of policies that impact on everyone, and especially those at the bottom.
This is a democracy and low socioeconomic groups need to be heard just as much as any other. If you refuse to allow them to speak on behalf of those groups, by simply lumping them as 'just a part of NZ', then there is the risk that their voice doesn't get heard because money speaks loudest, and main stream politicians would prefer to hob nob with someone who can shout them a nice latte somewhere.
Your attitude looks a lot like pale and stale colonialism, and looking for a way to make those other 'voices' just a quiet murmur in the back of the room.
Yvil your attitude is clearly arrogant and you somehow feel you are better than the rest. What do you expect the politicians to do, especially those who claim to speak for particular interest group? Remain silent on important issues?
In this case Maori politicians seem set on a mission of separatism, rather than realising that route will only spell more problems for most. But they can, and I suggest should, speak out against policies of a standing Government that are not good for mainstream NZ. What would you have them do? Or are you just sitting on your throne somewhere with a mirror close by, wishing the proles would keep it down a little?
I recently read a good summary on the debate about immigration by Yuval Noah Hariri. He suggest there are generally distinct debates going on but people bundle them together.
Debate 1 - Countries allow immigrants in. The debate focuses on whether this should be a duty or a favour.
Debate 2 - If immigrants are allowed in they should assimilate into the host culture. The debate here focuses on how far they should assimilate, how much of their culture do they need to give up and how much of the host culture do they need to embrace.
Debate 3 - If immigrants do make a sincere effort to assimilate they should be treated the same as host citizens. This debate focuses on how long the immigrants need to be in the country to be treated as first class citizens, years or generations?
Debate 4 - in addition to the disagreements people have on the questions above there is a fourth debate on whether the immigration deal is actually working, are both parties keeping to their side of the deal.
I have found this useful to organise my thoughts on the immigration issue.
The debate we are not having is what additional infrastructure is needed to support immigration. With an extra 106,000 people last year (about 2% growth), do we need, for example, another hospital, more frontline government services, more roads? The new government wants to increase immigration but cut budgets rather than grow them with population. Where will this leave us?
We're already facing the brunt of those broken migration policies made almost a decade ago. Low-wage migrants (low taxpaying) haven't been covering the high incremental costs of public infrastructure and authorities have wasted critical years sitting on their hands.
Take Wellington water infrastructure for example: we've had record rain in the winter, but Wellington Water is predicting water restrictions this summer. Reservoirs and aquifers storing water in the capital region were designed several decades ago for a much smaller population. Moreover, many of the century-old pipes bringing water from storage to homes are profusely leaking water but NIMBYs are fiercely opposing water metering that could help identify and fix those leaks.
Thanks agnostium. But there is a "Debate 5" which is the population issue. Many posters here believe, as I do, that we should have a policy of stable population.
If we did, then we need to consider immigration as a subset to that. So it does need to be considered as part, but not all, of a population target.
Definitely a debate but I see it as a subset of the first debate. If you believe in population policy you tend to sit on the side of the fence that sees immigration as a gift to migrants rather than a duty. Those that see it as duty would hold that a population policy is not an option.
Immigration is not an economic policy.
Are u sure about that M86..? My view is that Immigration policy is mostly economics....
The Chinese wave of immigration went hand in hand with Helen Clarks Free trade agreement with China, as an example.
My feeling is that this last Labour Govt. flicked the switch on immigration because of lobbying by employers...and maybe Treasury. ... Immigration is kinda our equivalent of the "Greenspan Put".... ( A quick GDP growth "fix" )
Canada...Austrailia and NZ all practice this kinda Ponzi Immigration.
Just my view
The politicians are using it to obtain an economic result, but as has been exposed, that result is a false one as more people only highlights the neglect of things like infrastructure and housing. Real economics is about making stuff and being able to sell it and NZ has been on a decline for that since the 1980s.
Immigration doesn't create new jobs, more employment, raise living standards or have any real benefits. It's a bit like the major economic plank for the country being buying and selling houses.
Labour had the taps turned off for quite a while to push wages up. Then things started not working in a major way with all sorts of bottlenecks occurring. I think the kicker was the realisation that inflation was getting out of control, that the local bottlenecks were adding to non-imported inflation and that immigration had to be allowed before stagflation was irreversible.
Labour were incredibly dogmatic and stubborn ideologues, but in the case of immigration they were overwhelmed by necessity.
Immigration is an example of our social services breaking down but it's not alone. The reality is that only our geographic remoteness stops boatloads from arriving.
Another unfortunate part of this is we have already stretched and over-worked social services re-targeted to supporting these new arrivals.
I'm guessing China facilitates Sunni and Shia burying their differences. All work towards a new world arrangement - which doesn't include the USA (it might take itself out, at the rate it's going).
They'll form their own currency - or arrangement thereof; oil will flow east into China (they built a port in Pakistan, I seem to remember?). Europe will be in trouble; economically, energy-wise, and by derivation, socially. The US and satellites, ditto.
But China finds it is in the same boat - built wide but not deep; growth instead of resilience. So it inevitably falters, up against hard limits, too.
Religions take hold - increasingly fundy (look at a recent Australian PM, and at where our own PM voted, by way of signaling). Islam has the inside running there. Ignorance increases, more than it is already (look at RNZ, as a classic local example); it's the only way to keep pretending the growth-narrative is valid. War may be 'big' for a while, but will descent into smaller, more local scraps as globalization disintegrates and there isn't enough energy left.
Leadership will be down to 'local' - some inspired, some not so. Timelines? Big scraps by 2030, local leadership by 2040-50. 3-5 billion alive at that point; reduction still happening.
Readout of President Biden’s Call with President Abdel Fattah Al-Sisi of Egypt
President Joseph R. Biden, Jr. spoke today with President Abdel Fattah Al-Sisi of Egypt to express his appreciation for Egypt’s leading role in efforts to facilitate the delivery of humanitarian assistance to the civilian population of Gaza. The two leaders committed to the significant acceleration and increase of assistance flowing into Gaza beginning today and then continuously. They also discussed the importance of protecting civilian lives, respect for international humanitarian law, and ensuring that Palestinians in Gaza are not displaced to Egypt or any other nation. The President briefed President Sisi on U.S. efforts to ensure that regional actors not expand the conflict in Gaza and also on continuing efforts to secure the release of hostages. President Biden and President Sisi affirmed their commitment to work together to set the conditions for a durable and sustainable peace in the Middle East to include the establishment of a Palestinian state.
Impossible to revert to any historical boundaries given for a start the centuries on centuries of the nomadic nature of the indigenous, Bedouins and more. Boundaries subsequently developed, mostly by the West in the interest of oil, and particularly precipitated by WW1 and fossil fuelled transport & armaments, are scarcely a century old. The insertion into all of this of the State of Israel is a hornet in the ointment. It introduces an enormous global crisis should the extreme hatred shared by the warring parties develop to the degree that Israel follows Putin’s precedent that nuclear weapons are valid in the event of an existential threat to their claimed territory.
FG. Many people seem to believe Palestine always existed as a sovereign state but as you observe, historical boundaries didn't exist in any meaningful way during Ottoman rule so definition of modern ME states must necessarily begin with the Sykes/Picot plan of 1916. Much is rightfully made about the duplicity behind this territorial division but seldom balanced by the existential realities faced by the Allies, with defeat by the Germans and Turks at that time a very real possibility. Nor by the common but now repugnant perception that Arabs were lesser beings.
FG. The results of the IFDs latest bunker bomb campaign in Gaza will possibly provide an indication of 'next'. If it has destroyed Hamas's $1bn tunnel network, resistance becomes immensely harder in the face of IDF incremental probe and starve tactics. The US has clearly signalled its intentions by launching powerful responses in Syria and Yemen against Hezbollah and the mullahs in Iran will be conscious their Russian mates are in deep trouble in Ukraine, so with no other militarily significant pro Shiite friends will be cautious about launching their proxy Hezbollah army against northern Israel. And even possibly now having second thoughts about green lighting Hamas's cross border incursion.
Shame they didn't spend money on improving their lives instead of a tunnel network. Also makes me wonder how you get out of those tunnels when all the buildings come down on top of you. Not possible to have all of Hamas in those, plenty of people needed top side to clear the exits, I guess the drones just follow the heavy machinery.
Oh, my mistake. When they talk about human shields in the news, I imagine the typical movie scene where the bad guy is holding the pretty woman hostage and using her as a human shield, and then the attractive hero comes along and shoots them both dead and says 'We finally got them'.
Anyway, I am wondering exactly how many women and children Israel needs to kill in that city they have besieged for decades before they can finally be safe from the violent extremism emanating from it? Can't they just do it quickly, if that is the path to lasting peace?
I mean, it isn't like the Israeli government doesn't actually want peace.
https://www.cbc.ca/news/politics/netanyahu-israel-gaza-hamas-1.7010035
You do facetiousness with style. Israel concludes (with some logic) from its conflicts with larger muslim neighbours that only military action delivers it relative security. Hamas and its Iranian sponsors knew the horrifying scenes we are now witnessing would unfold exactly as they are yet cold bloodedly initiated this clash. Whether the objective of eliminating an enemy who deliberately bases itself in an urban area could have been achieved without dreadful carnage is unknowable. Multiple recent precedents such as Aleppo and Bakhmut suggest a grim inevitability.
See my link above. Neither Hamas nor Israel want peace. The victims are the innocent civilians on both sides. Only Israel's leaders have the ability to make it all stop. They don't want it to stop as they want to extend their borders for their Jewish nation-state to be as large as possible. Which they are always doing. For example, 120 Palestinian civilians have been killed in the West Bank this month alone. There is no Hamas there.
This war is only happening because Hamas launched a brutal genocidal invasion of Israel. The IDF would be at rest in its barracks and thousands of now dead Gazans would still be alive had they not. It requires a monumental suspension of logic to assert that this conflict was caused by Israeli ambitions to acquire more territory. Israel has specifically stated it seeks no ongoing presence in Gaza after Hamas is dealt to.The international community and the US would never let them stay anyway, even if they wanted to.
There are hundreds of KMs of tunnels, some 30m deep, well lined and enough room to accomodate Hamas's militias. Multiple exits and air vents will be well disguised. The IDF will use sponge bombs to seal exits but every approach to these will be covered by Iranian trained Hamas snipers. The belief based on historic conflicts that demolished buildings provide effective defensive cover, costing the IDF high casualties, is about to be tested in a theatre where real time satellite observation combined with close in pinpoint accurate and uncontested aerial demolition munitions are available to the IDF at scale. The Russian invasion of Ukraine is perhaps instructive where older generation urban defensive warfare tactics have been overcome by a combination of technology and by strangling the high volume logistical supplies essential to modern urban combat. US supplied bunker busting capability is currently also under test with results not so far publicly known. A possibly telling silence on this from both sides.
Money talks and never so much as informers. There will be, as in any conflict, those on the ground who know where things & identities are, opportunists in all regards. As well amongst the society there will be those motivated by their own agendas, retribution for personal suffering etc. Hamas will not be without its own enemies within so to speak. For example when I read some time back, about the Spanish civil war, the double dealing, informing and vendettas that similarly emerged was simply staggering.
Yes. HUMINT is a critical plank to the the Israeli machine. They are adept at exploiting tribal factions the ME is riven with. They also have highly sophisticated electronic monitoring capability linked to vast data records on the Gaza and West Bank Arab populations. The time is fast approaching where western opinion will decide the Israelis have gone far enough in their quest for vengeance and will then support only initiatives that are overtly 'military' in nature. Possibly why they may be currently shaping a division of the country across a less populated line and then creating a corridor across for civilian exit, which they control.
Cannot fight a war from underground, Hamas is screwed. Food and water will run out sooner or later, living underground is just a temporary defensive position, at some point you have to come up and Israel have so many drones in the air they are all you can hear in the background during any live reporting from inside Gaza.
Yes I noted with interest the same. And above that are stationary satellites revealing in great detail everything below them. Valiant resistance to invaders from bombed out urban landscapes is part of popular imagery but the recent Ukrainian stand in the Azovstal steelworks is a more realistic and instructive modern example. There purpose built nuclear bomb shelters provided a grade protection but in a relatively short time a combination of heavy bomb technology and choking of supply lines by the Russian invaders overcame a defence significantly more capable than anything Hamas could deploy.
It was surprising that Israel was caught unprepared in the first place. But it would be unbelievably surprising to think that they had not undertaken intelligence and war games in anticipation that one day they would be required to launch an heavy invasIon into Gaza against Hamas etc. Techniques to locate and weaponry to destroy underground positions and strongholds should obviously have been developed if not perfected. Next week or so should reveal if that is so.
Breakfast briefing: 'We're OK if we can avoid the shocks'
Which we? - US real disposable personal income
Bidenomics: Food crisis erupts in US as 17 million households starve, highest in 11 years
Funded by forever unpayable debt.
US Cuts Quarterly Borrowing Target to $776 Billion, Still Record
...worst-case scenario they see US$150/bbl oil.
Stop trying to give me anxiety!
Although rig count remain subdued one thing that has started to balance demand is the availability of credit. Countries that subsidised oil have substantially been forced to stop by prevailing interest rates. People who say "raising interest rates won't low the proce of X commodity" take note.
Society needs a supply of good-quality energy (high EROEI).
That source has been burned; it's gone.
We're down to stuff which doesn't support a growing number of balls in the air (both being added and already there). So by the time we get to $150 a barrel, we're in recession - so it doesn't happen. The numbers might get inflated, but every time we bump up against the lid, it'll be lower.
Nicola Willis has a lack of imagination here. We don't need a "third entrant" for supermarket. That's more of the same. Rather we need multiple models and enterprises.
https://www.stuff.co.nz/national/rnz/300999395/supie-failure-nicola-wil…
Reposting from yesterday. ".....As bricks n mortar seem likely to continue as dominant, it's time to break up the cartels. The Americans called it 'Trustbusting'
Maximum 50 outlets in each group (NW currently about 250). Let them decide how to split up. Lots of options then for consumers and suppliers both. Several different models would emerge. Completion breaks out.
It's a fiction that the cartels are efficient. They make money from control.
Let's just have hard law, nothing like the hopeless supervising 'commissioner' idea......"
I food was valued correctly - many of us couldn't afford it.
It takes several calories of fossil fuel, to produce one of food - those FF calories can never be burned again. Ever. What does that make the food made with them, worth?
Helter Skelter. I guess you could say the Manson Family practiced what they preached by dumpster diving for food.
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