Here's our summary of key economic events overnight that affect New Zealand, with news we are in the shadow of tomorrow's US non-farm payrolls report which will give an important steer on where the world's largest economy is heading.
But there were some labour market indicators out today ahead of that report. First, jobless claims rose last week. However, this was the usual seasonal increase, but little more, and were basically at the same level as the same week a year ago.
Secondly, the Challenger job cut report noted a tiny rise in November from the tiny level a month ago. But these levels very much less than the same month a year ago. There is nothing here to suggest labour market stress is building.
In Japan, there are a series of subtle signals coming out that the Bank of Japan is about to end its negative interest rate policy. These moves are expected over the New Year period. That saw the yen rise.
Exports from China unexpectedly rose by +0.5% in November from the same month a year ago, after a -6.4% fall in the previous month and beating market forecasts of a -1.1% drop. It was their first increase in exports since April. But it isn't the gains that were expected and essentially dashes any hopes for an economic rebound in China. Among key trading partners, exports increased to the US (+7.3%) and Taiwan (+6.4%), while shrinking to Japan (-8.3%), South Korea (-3.6%), Australia (-9.1%), New Zealand (-15.2%), and the EU (-14.5%).
The spread of the dangerous respiratory infection illness in China seems to be bringing back their mobile "health code" apps - in at least two provinces so far, as officials struggle to contain it spreading nationwide.
Australian exports were -11.9% lower in October than the same month a year ago, down -0.4% from September.
But global freight rates for containerised cargoes rose +6% last week, no doubt due to the difficulties in traversing both the Suez and Panama canals. China to Europe rates rose +15% in a week, whereas China to the US West Coast actually fell. Meanwhile, bulk cargo rates peaked on Monday, but have eased marginally since.
The UST 10yr yield is unchanged from yesterday at 4.11% in a basic holding pattern. The key 2-10 yield curve is now a bit less inverted, by -46 bps. Their 1-5 curve inversion is also less inverted, now by -94 bps. And their 3 mth-10yr curve inversion is now -125 bps and little-changed. The Australian 10 year bond yield is now at 4.28% and up +5 bps from yesterday. The China 10 year bond rate is little-changed at 2.70%. And the NZ Government 10 year bond rate is down a mere -1 bp at 4.93%.
In New York, Wall Street isn't hanging around for the payrolls report, it has started its Thursday session with the S&P500 up +0.8%. Overnight European markets all eased a minor amount. Yesterday Tokyo ended its Thursday session retracing -1.8%. Hong Kong gave up -0.7%, and Shanghai fell -0.1%. The ASX200 also fell a minor -0.1% while the NZX50 ended up +0.3%.
The price of gold will start today just on US$2,020/oz and down -US$10 from yesterday.
Oil prices are staying down, unchanged from yesterday at just on US$69.50/bbl in the US. The international Brent price is now at US$74/bbl. These are 5 month lows, and on an inflation-adjusted basis, decade-lows. It is fair to wonder if the OPEC cartel has lost its influence.
The Kiwi dollar starts today at 61.7 USc and +10 bps firmer from yesterday. Against the Aussie we are down -20 bps at 93.5 AUc. Against the euro we are up fractionally to 57.2 euro cents. That all means our TWI-5 starts today just on 70.6 and -10 bps lower from this time yesterday.
The bitcoin price starts today at US$43,637 and down -0.4% from this time yesterday. Volatility over the past 24 hours has been modest at +/- 1.4%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
34 Comments
Yes. Praise to Damien O'Connor. Chris the Fence Sitter Hipkins continues to demonstrate every time he opens his mouth how spineless Labour has become on almost any topic.
Who are all these fools who take refuge in an impossible 'two-state solution' that died in 1967, and dies another death every day, with every bomb on Gaza, with every new Zionist settler seizing a Palestinian's land in the West Bank (700,000 of them, so far)?
The only solution is to sweep away the apartheid Israel state and replace it with a Palestine with equal rights for all, from the River to the Sea.
https://consortiumnews.com/2023/12/07/israels-two-state-smokescreen-for…
Agree. A distraction from NZ issues.
The looney greens and co should be reflecting that it was their liberal types, out to do good and help these Palestinian people who were then raped, murdered and dragged around like rag dolls for the concerns.
The Greens are finished for me. Let them go to Gaza and be human shields for their Hamas mates.
Let them go to Gaza and be human shields for their Hamas mates
Funny enough, Hamas does not treat LGBTQIA+ people as humans in the first place, women are still considered inferior to men and the victims of sexual assault are put on trial alongside the perpetrator.
Not condoning the deplorable treatment of the people of Palestine at the hands of the IDF, but liberal Western values in the entire Middle Eastern region only exist within the Israeli borders.
The "Greenies for Gaza" movement is basically like the sheep cancelling the sheepdog for attacking the wolves.
Inhabitants in this region have been warring and killing one another as the old testament substantially describes for centuries and centuries too before New Zealand was known to exist. How bad it was, was hardly helped either by the arrival of christians in the guise of crusaders. what New Zealand thinks is about as important to the participants as chaff in the wind. Reminiscent of the Reefton Times, or whatever it was, editorial warning Herr Hitler in the 1930s that his aggressive policies were unacceptable.
Exports from China unexpectedly rose by +0.5% in November from the same month a year ago, after a -6.4% fall in the previous month and beating market forecasts of a -1.1% drop. It was their first increase in exports since April. But it isn't the gains that were expected and essentially dashes any hopes for an economic rebound in China.
Indeed.
The entitlement and hubris is absolutely off the charts: "We've got to look at what are the technologies where we are ahead of China, they're capable of doing very bad things and we're going to deny the entire country this class of equipment" https://twitter.com/jordanschnyc/status/1732044427005464860/video/1 Does she seriously believe she can stop the technological progress of 1/5th of humanity, especially when it's a country that produces 8 times more engineers than the US? Link
Wonder why the economy seemingly kept trucking along without signs of major of stress even though the RBNZ has pummeled it with high interest rates? Cash buffers! Not only consumer savings either. This too.
https://www.nzherald.co.nz/business/ird-calls-for-2b-of-covid-business-…
Christmas and the months following are going to be harsh. RBNZ says 'very low growth'. Who says 'recession'?
I fear this could also mean IRD kicking off more liquidations, the max loan amount was between 20 and 30k I think, so it will represent a big liability for many small businesses. Coupled with IRD having more funding for investigations and the business cycle looking negative for many industries (hospo, construction, etc) and it's not looking great.
Without the $3 billion a year in tax cuts we could build a CRL every 2 years (not that we need to), or a surface light rail every year, or probably a couple of hospitals every year (I have no idea how much they cost).
We can easily afford it, we just choose to leave it for the next generation to worry about.
You seem to doggedly need to avoid reality, and cling to money.
Labour Party tout?
It isn't the money, it is the net energy and the resource supply(ies) and the number of infrastructure-balls we have in the air.
Take the time to learn, JJ ; sit yourself down and listen to a Generalist mind in full cry;
https://www.thegreatsimplification.com/episode/66-kim-stanley-robinson
(Kim Hill interviewed him recently, and I've just finished the book (the interview takes less time and is several times more illuminating). The last 1/4 is astounding; challenging Musk and Hawkins using the same empirical logic I use to rubbish Economics (as taught, and as you have clearly come to the church of). This isn't - oh the irony - rocket science.
Are you saying that if the National party didn't give tax cuts and instead gave that money to a contractor to build say a new Light Rail line, that it wouldn't get built? And the CRL tunnel pictures I've seen are actually just fake? And I just imagined driving through the Waterview tunnel yesterday? And that there is not enough energy in that big yellow thing I can see in the sky?
And when this coalition say PPP is the answer to fund infrastructure,have a look at Transmission Gulley...$180 million a year going forward for 6 lanes of ashphalt,CRL looks like a bargain.
https://thespinoff.co.nz/business/01-04-2022/the-true-costs-and-benefit…
In his typical rush to identitify incidental beneficiaries of Govt spending Hickey completely misses the true cost.
The PPP 25 year funding & maintenance contract National signed means Transmission gully will cost over 3x the upfront capital cost (originally $800M, now $1.2B). So between $3 to 4B.
https://www.greaterauckland.org.nz/2019/08/30/lost-in-transmission-junk…
Hickey should also know that anyone who regularly used the old road in daylight hours over weekends will say that the time benefit is many times 11 minutes.
On the flipside, by not building any infrastructure and bickering endlessly over the delivery model, we are constraining the earning potential of future generations and leaving behind an overcrowded, creaking infrastructure subjecting them to worse living standards.
We already use PPPs in NZ where the government agency contracts private partners to design and build infrastructure. NZ could benefit from private infrastructure funding by bringing Kiwisaver into the mix and expedite the design and consultation timeline - since private funders prefer not to sit around chatting about a project for half a decade like the fat-cats at NZTA and MoH do.
"boomers not opting to fund assets that they will likely never use" - but they did use assets that their parents funded. Boomers want to move from the pay up front model that they benefited from when they were young to the pay later model that they benefit from now. Its the same with NZ super.
PPPs are effectively way of funding a project without any debt being loaded into the government books. But instead of paying the cheap funding rate the government gets, they pay the private funding rate + profit + risk premium (+ golden handshake no doubt) that the private company expects.
That's why we need local fund managers like ACC, NZ Super and KS providers to step up and participate more in infrastructure financing, instead of betting all their money on the NASDAQ.
How about the government puts its revenue from oil exploration and production into a green financing fund? Nope, rather keep that money in the tax pool to hand out election lollies.
As a nation group, we seem determined not to consider that tomorrow will come.
It is very healthy to live in the "now" for your mental health. If it is not raining now, you don't need your raincoat.
But does your life experience inform you that it never rains?
There is a great article on this site about the size of our infrastructure problems. Recommended reading.
And we waste our time talking about tax cuts?
Who is setting the agenda for what we discuss?
Are we all completely nuts?
We need some kind of national framework to talk about our real issues and it is not coming from our Capital.
"Coles and Woolworths set to face a Senate inquiry. NZ has been down this road before"
https://www.abc.net.au/news/2023-12-08/coles-woolworths-nz-grocery-duop…
Peter Dunne (of all people) puts his finger on the pulse
https://breakingviewsnz.blogspot.com/2023/12/peter-dunne-social-investm…
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.