A review of things you need to know before you sign off on Monday; no retail rate changes; terms of trade hold, services rise again, NZX50 promotion-relegation, swaps & NZD hold, gold at ATH, & more

Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).

MORTGAGE/LOAN RATE CHANGES
No changes to report today.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.

HOLDING OUR OWN
Our merchandise terms of trade eased back a relatively minor -0.6% in the September quarter to be only -0.3% lower than a year ago. Export prices of goods fell -9.3% in the year primarily due to weak meat prices and import prices fell -9.1% on the same basis with much lower petrol prices although that was somewhat offset by large prices rises for imports of consumption goods. In volume terms none of these year-on-year reductions were as large. For services the situation is quite different and our terms of trade for this category improved and by a healthy margin, and building further on a trend that started in March.

AUCTION PUSH
Auction rooms had their busiest week of the year last week with a big rush of properties being auctioned as we head towards Christmas.

MINI BUDGET DATE SET
Treasury announced that the incoming Government's mini-Budget will be released on Wednesday, December 20, 2023.

SERVICES SURPLUS GROWS AGAIN
Included in today's trade data release is the fact that Kiwis are now travelling abroad more than pre-pandemic (and not just to the Doha COP28). But fortunately that is somewhat overshadowed by a good return of overseas visitors although that is nowhere near pre-pandemic levels. Still, it is a surplus to our current account advantage.

SEAT WARMER
The NZ Super Fund is filling departing CEO Matt Whineray's role with an acting-CEO because he leaves on Friday December 8, 2023. The seat will be kept warm by Paula Steed, an existing NZSF manager (and prior to that the GM Strategy at ASB. It could be a very short gig. Guardians Chair Catherine Drayton said the Board’s search for a permanent Chief Executive to replace Whineray was progressing well and that she expected to be able to make an appointment this year.

REBALANCE REVISION
The NZX50 is about to be updated with two listeds relegated (Pacific Edge and Synlait Milk), and two promoted (Gentrack, and Turners Auto Group). We are updating our tracking resource ready for the shift on December 18.

ONLY FOR THE COMMITTED, PATIENT & RESILIENT
Rabobank's global review of animal protein production signals a mixed outlook, but one where quality may have a good future. They see structural change coming after four years of growth, and even faster growth in costs resulting in margin compression. Post-pandemic processing costs will be higher they say, and price rises to pay for this may stunt overall demand volume. But they also see consumers growing used to higher prices and, in some markets, willing to pay a quality premium. However stamina and patience will be required in this transition until excess production capacity is shed.

MORE HOUSING DEBT
In Australia, there was something of a surprise rise in home loan lending in October. The latest data shows it up +4.9% from a year ago, up +5.4% from a month ago. Nothing like that was expected. But little of this expansion was for new-builds, disappoint their construcyion industry.

SWAPS HOLD
Wholesale swap rates are probably unchanged today. However, the key reaction will come at the close. (Update: They dipped -5 bps for 2yrs.) Our chart will record the final positions. The 90 day bank bill rate is unchanged at 5.63% and now +13 bps above the OCR. The Australian 10 year bond yield is up +6 bps from this morning to 4.46%. The China 10 year bond rate is unchanged at 2.70%. And the NZ Government 10 year bond rate is down -5 bps at 5.05%, while the earlier RBNZ fixing was at 4.97% which was down -4 bps today. The UST 10 year yield is now at 4.24% and up +3 bps from where we opened this morning. The UST 2yr is now at 4.60% so that key curve inversion is still at -36 bps.

EQUITIES MIXED
The NZX50 has opened its week holding on to last week's good gains, up +0.1% in late trade today. The ASX200 is up +1.7% in afternoon trade, catching the same wave the NZX50 got last week. Tokyo has opened down -0.6%. Hong Kong has opened up +0.3%. Shanghai is little-changed at its open. And Singapore is up +0.6%. The S&P500 futures suggest that Wall Street will open its first full December week little-changed.

OIL STAYS DOWN
The crude oil price is little-changed from this morning, still at a low US$74.50/bbl in the US, and the Brent benchmark is at US$79/bbl.

GOLD AT RECORD HIGH
In early Asian trade, gold is now at US$2091/oz and a new all-time high, up +US$20 from this morning's open.

NZD HOLDS
The Kiwi dollar is unchanged from where we opened this morning at 62.1 USc. Against the Aussie we have held at 93 AUc. Against the euro we are unchanged at 57.1 euro cents. That means the TWI-5 is still at 70.8 and holding its higher level.

BITCOIN RISES
The bitcoin price has moved up to US$40,208, a 20 month high and up +1.3% from where we opened this morning. It was last at this level on April 26, 2022 when it was falling. Volatility over the past 24 hours has been low at just on +/- 0.8%.

This soil moisture chart is animated here.

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