Here's our summary of key economic events overnight that affect New Zealand, with news there were a flurry of factory PMIs released overnight confirming a global manufacturing downturn remains but it is minor.
But it is not minor in the widely-watched US ISM version as that reports a noticeable shrinkage across the board. The internationally benchmarked S&PGlobal (ex-Markit) version however records barely a drop. But it does confirm lower demand.
In an overnight speech, Fed boss Powell signaled that they are likely done raising rates, but his comments were laced with caution.
Canada's labour force grew at a faster pace than expected in November, faster than the good +24,900 increase in employment. Payrolls swelled much more, but the number of self-employed fell rather sharply. That meant that their jobless rate inched up to 5.8%. This wasn't unexpected.
In China the Caixin factory PMI diverged from the official NBS version again, and again was more positive. But to be fair it is just oscillating around a steady state with this an 'up' month. However this report does note "a sustained rise in new orders".
Meanwhile, Beijing has pledged to target ¥1 trillion in manufacturing and infrastructure development. Along with some supply knocks in Panama, this has helped jerk up the price of copper overnight to US$8,615/tonne, it highest since August. (But still a long way below the US$9400/tonne it reached in January.)
Overall, China's economic performance remains problematic, and along with the implied criticism he received from Party elders during their summer retreat, it now looks like President Xi is delaying a major set-piece economic conference (the "third plenum"), one where Xi's new team (the one appointed at the "second plenum") releases its longer-term economic plans.
South Korea yesterday released export data for November and it is very encouraging for global trade. Overall exports rose +7.8% from a year ago to a 14-month high and acing market expectations of a +4.7% rise. This was the second consecutive month of expansion in exports, marking the fastest growth since July 2022. amid an improvement in sales of global chip sales, with semiconductor exports rising for the first time in 16 months. Sales of semiconductors grew +12.9%, while exports of car and rechargeable batteries surged by +21.5% and +24.8%, respectively.
In Australia, CoreLogic is reporting that in November the heat came out of their housing market as values across Melbourne dipped and Sydney slows.
And we should note that Australia faces it final RBA rate review in Tuesday and markets don't expect their 4.35% rate to be changed. This is the last of their monthly reviews. In 2024 they change to a meeting schedule much like the RBNZ one.
The UST 10yr yield has fallen -13 bps from yesterday, now just under 4.21%. That is a massive -22 bps retreat for the week and is now at a 2½ year low. The key 2-10 yield curve is less inverted at -34 bps. (It was inverted by -48 bps last week.) Their 1-5 curve inversion is unchanged at -87 bps. But their 3 mth-10yr curve inversion is now -116 bps and much more inverted. The Australian 10 year bond yield is now at 4.43% and down -6 bps from yesterday. The China 10 year bond rate is unchanged at 2.70%. And the NZ Government 10 year bond rate is up +11 bps at 5.10%. A week ago it was at exactly the same level.
Wall Street has opened its Friday session with the S&P500 up +0.4% and a weekly rise of +0.7%. Overnight, European markets were all up strongly led by Frankfurt which was up +1.1%. Paris lagged, only up half that. Yesterday, Tokyo ended its Friday session down -0.2% to end its week down -0.8%. Hong Kong fell -1.3% on Friday to end down an eye-watering -4.8% for the week. Shanghai ended unchanged for a modest weekly slip of -0.2%. The ASX200 ended its Friday session down -0.2% to cap its weekly gain at +0.5%. The NZX50 did much better, up +0.3% on the day to end up a creditable +1.4% for the week and the best of the equity markets we follow.
The Fear & Greed index we follow has stayed in the 'greed' side as risk appetites remain.
The price of gold will start today just on US$2060/oz and up +US$20/oz from this time yesterday and nearing its all-time high. A week ago it was at US$2000/oz, so a +3.0% gain since then.
Oil prices firmed +50 USc from yesterday at just on US$76.50/bbl in the US. Then they suddenly dropped to US$74.50/bbl.The international Brent price was just over US$81/bbl. But after the sudden shift it is now down to US$79/bbl.
The Kiwi dollar starts today at 62 USc and up +20 bps from yesterday. A week ago it was at 60.7 so a +1¼c gain from then. Against the Aussie we are marginally softer at 93 AUc. Against the euro we are up +½c to 57 euro cents. That all means our TWI-5 starts today just on 70.7 and up +20 bps from this time yesterday, up +100 bps in the week.
The bitcoin price starts today at US$38,773 and up +2.6% from this time yesterday, and a break out of the tight range it was in this week. A week ago it was at US$37,928 so a lesser +2.2% rise from then. However, much of this is just a reflection of the USD slippage. In NZD it remains in its recent meandering range. Volatility over the past 24 hours has remained modest at just on +/- 1.8%.
If you have access, this is worth a read; the greatest mountain climbing achievement - ever. It will probably be ignored by most outside the climbing fraternity.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
41 Comments
China government is pivoting away from... fixed for you
The Chinese people will NEVER pivot away from property investment in fact they see the value that we sometimes miss. Just as well they are out of our market. Though my Chinese girlfriend has her sights set on getting nz residency
https://i.stuff.co.nz/opinion/301019123/reductio-ad-absurdum-and-the-un…
I don't understand how this guy is so surprised. It was 100% clear from the election campaign that Luxon was the worse National leader in living memory. There can be absolutely no surprise that we've ended up with a coalition that is proposing some of the worse policies in living memory. And to try to pin this on Peters is absurd. Luxon didn't have to go with Peters or Act. Luxon choose to because it enabled them to get policies they wanted but would never have been able to get over the line themselves.
Chris Bishop was a tobacco lobbyist. Does anyone really believe the tobacco law repeal had nothing to do with him?
National under Luxon is only interested in money, protecting the interests of their rich donors and industries that pay them off. Act and NZ First are just the cover they use to try to get away with it.
"Disclosure: this was a political broadcast brought to you on behalf of the Labour party"
Taylor had nothing to say about the "disproportionate amount of power" given to the last Govts minor partners.
"...the New Zealand on Air board, a completely independent organisation."
The media received taxpayer money from NZOA in return for a hyper-radical political view of “te tiriti” and NZ:. See: https://d3r9t6niqlb7tz.cloudfront.net/media/documents/2022_03_Irirangi_te_Motu_NZ_on_Air_Te_Tiriti_Framework_and_evidence_for_News_M_EPcNdaD.pdf
I think 'honest' is the key.
Yes, white folk from Europe overcame the earlier arrivals (I disagree with Taylor there; Maori are not indigenous). Yes, they set up rules which advantaged white folk - partly because the rules reflected white-folk culture, partly by force.
What neither current-debate 'side' understands - at least publicly - is that this was merely the last of a long, long history of such overtakings. The Woke brigade have chosen to salve their consciences by fiercely rewriting the most recent take-over; what they don't acknowledge is the fact that society, as constructed, is screwing the chances of EVERY future generation - a so many orders-of-magnitude-bigger problem.
Paul Johnston in a History of the American People argues that only time will even out the cultural differences, for want of a better word, between the indigenous and the colonists, or invaders as you might argue for Great Britain , from the Celts through to the Normans. However the passage of time for that particular type of percolation, is neither predictable nor harmonious. In the USA for instance the subsequent and prolific introduction of African negroes for nothing more than to provide power as in energy, has in turn created social disorder for which time passing by, has hardly offered any alleviation.
To argue that we needed people to continue smoking so we could collect a billion dollars in tax, to fund tax cuts, brought back to me a phrase I learned in my Latin class back in the 60s.
“Reductio ad absurdum” – if we are going to justify smoking as a tax generating revenue why don’t we go the whole hog and start selling methamphetamine in our hospitals.
The country deserves this Coalition
Ignorance gets what you'd expect.
The fact that some choose ignorance even when offered an alternative, is the thing I can never assimilate.
I don't think this ideological, lobby-bound rabble have three years in them. And by acceding to the tobacco lobby, Luxon has already shown us his moral compass (must have bought it off Jack Sparrow...).
Read Mary Holm column today,
Who applies boomer wisdom and experience to investing. One has to wonder how relevant it is to anyone but the boomers.
Perhaps I should read before commenting but suggesting that house prices have to be 'manipulated down' shows a serious problem with our monetary system.
Yes many cashing in their Kiwisaver accounts recently will be wondering abouts Mary's years of investing advice?
Sure. KS fund performances will probably not be great. They will cash in and Mary will tut tut about their weak hands. She will point out that stocks always go up over the long term and the down times are the best time to be buying. You cannot discredit her narrative. However, at comparative ages, the millennials have it stacked against them compared to boomers.
Anyway, what if she's wrong? What if it is different this time?
I sent a text to Mulligan/RNZ/Afternoons, about 6 years ago when she was opining about the future.
I asked if she knew about the Limits to Growth?
He asked her; "not in my skill set" she replied.
And it - very obviously - still isn't.
I wonder, often, about the thin division between choosing ignorance, and lying; in term of impact, too often the difference is nil.
I asked if she knew about the Limits to Growth?
He asked her; "not in my skill set" she replied.
Agree entirely and it's something that is also "not in my skill set" in terms of comprehensive understanding. Big difference is that I'm aware and not dogmatic like these financial / investing experts who seem to double down on very broad business cycle patterns and the infallibility of the Anglo-Saxon driven paradigms of how people allocate and generate wealth.
The price of gold will start today just on US$2060/oz and up +US$20/oz from this time yesterday and nearing its all-time high.
Gold looking at its highest daily close ever - USD2,070+.
New all-time high for gold now as price reaches USD2,089 in current trading session.
Pending homes sales in the U.S. are now at the lowest level for 20 years. Basically fallen off a cliff.
“During October, mortgage rates were at their highest, and contract signings for existing homes were at their lowest in more than 20 years”.
The U.S. Pending Home Sales Index has fallen by 44% from its peak, which makes current drop largest maximum drawdown in history. And the overall level is also at its lowest in history.
https://www.zerohedge.com/personal-finance/us-pending-home-sales-index-…
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.