Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
There are no changes to report today.
TERM DEPOSIT RATE CHANGES
None here either.
NOVEMBER CAR-BUYING STRONG
More new cars were sold in the year to November 2021 than is any prior twelve-month period. It topped the year to October 2018, with 110,151 new car sales. Car registrations rose to 22,573 in November, with 'new' recording 11,214 and 'used imports' recording 11,327. Compared with pre-pandemic levels, that is a +16% rise for 'new' but a -3% fall for 'used imports'. SUV's, especially compact SUV's, accounts for 73% of the new car segment. Infometrics notes that full battery EVs have doubled their share of registrations since the Clean Car Programme began in July, accounting for 5.5% of total registrations over the last five months. Although diesels have maintained their usual share, hybrids have increased to nearly 20%, and petrol registrations have slipped back from 74% to 68% over the same period.
STRONG DAIRY PRICES FLOW TO THE FARM
Strong dairy prices sees dairy giant Fonterra raise its forecast 2021/22 milk price payout by 30 cents to a mid-point level of $8.70/kgMS, but trim its earnings forecast by 5c to 25-35c per share. A summary of all analysts' forecasts is here.
FRAUD RESULTS IN HOME DETENTION
A Balclutha livestock agent has been sentenced to 12 months home detention on charges brought by the Serious Fraud Office. John Francis Williams (40) was sentenced today in the Dunedin High Court having pleaded guilty to two representative charges of ‘False accounting’, one representative charge of ‘Obtaining by deception’ and one charge of ‘Causing loss by deception’. At the time of his offending Williams was employed as an agent by Rural Livestock Limited, the largest privately-owned livestock and station company in the South Island.
DOWN, UP, & AROUND
The latest Roy Morgan political poll reveals some interesting shifts and non-shifts, even if it completely misunderstands the New Zealand context of where the Maori Party stands. According to this poll, National and the Greens tread water, both at low levels. Labour falls from high levels, and Act makes a good gain, again. NZ First is now polling below the Maori Party. There are some revealing data on where each is drawing support; Act is particularly strong with men, but matches the Greens on the women's vote. Labour's strength is the women's vote. National is weak across the board.
SERVICES DISPARITY
Despite low consumer confidence, the Japanese service sector PMI rose in November to its highest in more than two years. Meanwhile, the private Caixin services PMI for China expanded more slowly with a lame result, and one that was weaker than the official services PMI. But the same services PMI survey in Australia is reporting a rising expansion. We don't get the November PSI for New Zealand until Monday, December 13, 2021.
LOCAL PANDEMIC UPDATE
In Australia, pandemic cases in Victoria were 1188 reported today. There are now 12,913 active cases in the state - and there were another 11 deaths yesterday. In NSW there were another 337 new community cases reported today, a jump, with 2851 active locally acquired cases, but they had no deaths yesterday. Queensland is reporting three new cases. The ACT has 4 new cases. Overall in Australia, just over 87% of eligible Aussies are fully vaccinated, plus a bit over 5% have now had one shot so far. In contrast, there were five cases in New Zealand at the border again, and 92 new community cases today. Now 86.7% are double vaxxed, 92.9% of Kiwis nationally aged 12+ have had at least one vaccination, and the equivalent Australian rate is now at 92.6% of all aged 16+ (91.7% ages 12+).
GOLD SOFT
In early Asian trading, gold is at US$1769 and down another -US$12 from this time yesterday. The gold price was US$1784 at the beginning of November so it hasn't really moved much.
EQUITIES GENERALLY FIRMER
Wall Street closed up +1.4% in their Thursday trade, so making back off of the prior day's fall and more. Tokyo has opened flat today but Hong Kong has opened down more than -1.0%. Shanghai is also little-changed at its open. The ASX200 is flat in early afternoon trade, and heading for a weekly fall of -0.8%. The NZX50 is also flat nearing its close, but heading for a +0.3% weekly gain.
SWAP & BONDS RATES
We don't have today's closing swap rates yet. They may have flattened again today with the 1 and 2yr rates firmer. The 90 day bank bill rate is up +1 bp at 0.87%. The Australian Govt ten year benchmark rate is now at 1.63% and down -2 bps. The China Govt 10yr is at 2.91%, little-changed but firm. The New Zealand Govt 10 year rate is now at 2.37% and up +2 bps but still well below the earlier RBNZ fix for that 10yr rate at 2.43% (+3 bps). The US Govt ten year is down another -1 bp from this time yesterday to 1.42%.
NZ DOLLAR SOFTER AGAIN
The Kiwi dollar is now at 67.9 USc and amore than -¼c lower since this time yesterday. Against the Aussie we are slightly firmer at 96 AUc. Against the euro we are softish at 60.1 euro cents. The TWI-5 is now back down to 72.7. Remember it started November at 75.3, so an overall devaluation in five weeks of -3.5%. That has inflation implications.
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BITCOIN SLIPS
The bitcoin price has dipped -1.2% over the past 24 hours, now at US$56,538. Volatility since this time yesterday has been modest at just on +/- 1.4%.
This soil moisture chart is animated here.
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85 Comments
Well, if I was to try to predict the bond/stock markets future performance, I wouldn't know where to start.
In NZ terms, by doing this recent money printing, whats to stop Labour doing it again and again in future, using really weak excuses.
Might indicate a rising market forever.
Then again I get a really bad feeling with this approach especially that NZ's debt headroom has reduce markedly for no quantifiable economic gain.
Roy Morgan polls often a bit more maverick than others, but leaving aside the irrelevance of tallying the Maori Party with the other opposition it nevertheless confirms the continued trend doesn’t it. Even Keys 9 year term was bereft of a solid viable coalition party. The emergence of ACT as exactly that, really changes the landscape. If you think about it the only incoming government that has offered a solid election platform as a coalition was that of the Clark/Labour & Anderton/Alliance and even then the latter started to unravel not long after. Predict Luxon’s appointment will provide further momentum and at that point the actual strength & stability of this Labour government will come under pressure to which they are neither accustomed to nor capable of absorbing. This is going to be a very entertaining two year pre election period.
You could be right. But if Luxon fails to launch, then why would any of the disaffected ex-National, new Labour, voters return? What is it that he's going to offer-up that hasn't already been? How is he going to attract/retain the vote of tonyam below?
There's a lot riding on the next few months. A lot.
(NB: If he had any sense, he'd read the mood of both the property market and the electorate; announce he's going to quit his property holdings, bar the family home, to remove any impression of vested interest. But I don't think he has that foresight or courage in him. He appears to be very much a product of The System, and I'm not sure that's what the voters want. )
Why would he fail to launch?Im sure Peter Goodfellow would have thought this one through!What could go wrong?
In the middle of a housing crisis its a hell of a bold choice and a hell of a stance( i got seven and i don't care) of Luxon to take......
Let em eat cake alright!!
That’s the thing isn’t it. Two years in politics is a hell of a long time but history is inclined to favour a party that has an ascending path underway whereas once an incumbent government begins a slide it is very difficult to redress & rebound. But certainly agree the resumption of parliament in 2022 will quickly demonstrate whether or not Luxon has both the mana & substance, with the electorate in general, to carry the above proposition. As said, if nothing else, entertaining.
And no one is looking forward to a viable National Party than me. I'm one of the disaffected, who turned last time. Ardern has lost me at this stage as she ,as Key did, reneged on her housing commitments. (I guess they were both terrified by the same set of permanent Public Servants?!). So entertaining times ahead indeed.
Of all the Greek, thence Roman gods, a lot of fun and mayhem they did cause, but Janus was certainly the most believable if to translate to modern society. And that is because way back then the Romans initially largely inscribed their coinage with the image of Janus, as being fittingly two faced.
And yet, he could be a winner on both fronts!
Seen as a man of the People (if he sells) and money in the bank, if the market corrects.
But, you're right. It's just a tick on Luxon's CV Isn't it. "Politician - Leader of the NZ Oppositions Party" . Now. Where is that bank directorship form.....
You're right about the importance of ACT's rise as a viable coalition partner. But so much of their vote has been cannibalised from National... the question is whether National can retake the centre.
Dropping Collins is a good start, but I'm really not getting the sense that Luxon can read the mood of the electorate. At all. The preconditions are there for an absolute landslide if National had a leader with that skill, but they're still in thrall to the 90s. His first moves as leader of the opposition have been to appease voters in the wealthy inner-urban electorates... maybe they've decided that's where they can take votes from Labour, but I think they're wrong. There aren't enough swing voters in Remuera to make up for the general mass who see National led by a very rich man, whose first priority is protecting the interests of the very rich by defanging an important housing initiative.
Guys and gals, It's happening. FHB here with 160k combined income, 1 kid and 250k deposit. Was pre approved for 770k in September. Got a call yesterday by the broker saying ASB has revised our lending down to 585k.
We're officially screwed. Wheee!
P/S: did you see how many property has been passed in TODAY from Barfoot ?!?!
Your loss will always be someone else's gains.
That aside, I think it's more like you may have other issues that the bank won't lend you.
Even ANZ is ready to hand out $1.192M on the best of scenario based on your 160K p.a. income and 1 kid.
Love the story.
yeah the broker called me today and she said she forwarded the application to ANZ last week in anticipation for a reduction. Came back even lower. The only silver lining is, we only got a cut of 190k, some other clients of hers have been cut up to 300k. Will hate to be a mortgage broker these days after that rule changed on the 1/12.
Your loss will always be someone else's gains.
Debatable. The NZ economy seems to based around bidding up house prices. Less or tighter credit creation doesn't seem to be in the interests of home sellers or for the wealth effect (crucial for the economy at the best of times). But that's where this silly game has ended up. If debt creation doesn't keep expanding, then the potential for the economy to turn to seed is greater.
The problem is the debt creation is for consumption (housing) and government welfare with no productive enterprise to pay the debt. The interest that has to be paid was also never created when the loan was made. Debt fueled growth. USA is the king but have the worlds reserve currency and thus a method to 'export inflation' and continue to live above their means. What backstop do we have? A debt Jubilee? Monetize the debt? Now we have a trade deficit, plus for the first time RBNZ have gone to QE. QE will not be unwound without a recession. Interest rates cannot rise without a recession. The more we continue down this road the more painful it will be. This is why America will go to any extreme to keep the worlds reserve currency and to keep oil trading in petrodollars (Gaddafi). We cannot continue this Keynesian approach without a huge correction.
It seems harsh but maybe the new reality.
On a 30 year mortgage at 4% interest your payments would be around $850, add another $75 per week for insurances and rates and although not a breeze $925 pw is doable on your income.
Stress tested at 7% though and outgoings come out to around $1200 pw.
On the flipside you'd think being a jnr dr that there is a fair bit of upside to the 'salary is highly likely to increase substantially' part of the equation.
I'm interested to see where the house prices go by about March next year, it might just start to get interesting...
tomyam ......while you wait for a house, stick with the Crypto, as the comments you get on here don't even know what an NFT is or because they don't understand it, they just trash it ! .....or they are secretly buying it, like so many financial institutions around the world ......while they wouldn't know who Willy Woo is ? (my favourite crypto commentator as he reads what the crooks in Wall St are up to and how to work around them in the crypto space - from Nelson as well I hear :)....I'm just a HODL'r right now, but looking into DEFI 2.0 (just heard 3.0 is out now too) .....btw earned more from Crypto than my gross salary ......hang in there , things are about to change ....Good Luck !
Nurse....? Could get pregnant and lose income so lose points there! Say 3.5% off the loan amount for that!
depends what the current algorithm is.... welcome to the matrix!
in all seriousness.... the banks have no relationship with the customers at all...we have all been dumbed down so much and lost much of what made us a community- wait till the branches close!
Keep it in bitcoin.
“bitcoin will demonetise physical property and collapse its value down to its utility value.” Michael @Saylor on the latest @WhatBitcoinDid episode
Few understand how profound of a shift this will be.
https://twitter.com/btcgandalf/status/1466560285037240328?s=21
PDK -
"Deposit is grown from crypto and Tesla".
So nothing really; just blind faith.
Just like the "big chunk of money in cash" - by which I presume you mean digits in a bank computer?
Good luck with that.....
PDK - Just be happy for the guy man, leave your negativity and superiority at home !
The World hasn't ended yet, we live another day, enjoy 'Freedom Day '
PDK -
"Deposit is grown from crypto and Tesla".
So nothing really; just blind faith.
Just like the "big chunk of money in cash" - by which I presume you mean digits in a bank computer?
Good luck with that.....
PDK - Just be happy for the guy man, leave your negativity and superiority at home !
The World hasn't ended yet, we live another day, enjoy 'Freedom Day '
He could have done that for 50g. The rest is because of rentiers, of one type or another; landlords, bankers, RE people, even the media (the ODT has a HUGE section of RE every Saturday).
But 'rentier' also describes share-trading and crypto-betting; nobody is actually DOING anything (well, Tesla, arguably a percentage). Whereas a doctor and a nurse (productive activities both) should be able to buy a house with a year's income between them. The rest is parasitic and ponzi. This will end, and it won't end well.
Fix the money first. We need a hard, mathematically-engineered, fixed-supply money, that can’t be magically inflated with a printer, so people can store their economic energy in a thermodynamically stable system. Bitcoin will eventually demonetise all of that other “stuff” used as a store of value, including eventually real estate, and the latter’s value will collapse to just it’s utility value.
even if it completely misunderstands the New Zealand context of where the Maori Party stands
Does it? The Maori Party are not in any formal or even informal agreements with Labour (i.e. Coalition/Confidence and Supply/Support)
So therefore logically, would they not sit in the "opposition" camp with National and Act?
Well I read Hootens article in the herald this morning and was interested in who the chap was that got mentioned as mentoring Luxon after I read this;
"National was too shambolic to make much of Horn's advice last year, but Luxon and Bridges appear to have picked it up, stressing not so much the quantity of government spending but the quality."
Then I googled this guy Horn and found this
"Murray Horn has had a four decade career in finance and business traversing senior public service leadership positions. He was at Treasury during the sweeping economic reforms of the fourth Labour government in the 1980s, and served as Treasury secretary during the welfare and labour reforms of the 1990s National government. He's also had top jobs in the private sector, including as managing director of the ANZ, and is now a director on the boards of leading companies Wynyard Group, telco retailer Spark, and the Beijing based board of the China Construction Bank."
Advice last year?More advice this year....Classic New Zealand....no wonder we got slaughtered at Gallipoli.Too trusting and too naive.
I was hoping Luxon might have shared his own vision but in all honesty I worry he will just be running some blackboard post-it note sessions to prioritise what the banks say...ffs!!!
Former Westpac CE appointed to chair Kiwirail.
At the very least, they could've brought in someone with a bit of background in infrastructure while Kiwirail is running several capital expansion projects simultaneously?
https://www.stuff.co.nz/business/127181034/former-westpac-nz-chief-appo…
Lots to happen yet. Don't panic Mr Mannering. Plenty of time for Labour to f....k it up next year. They've pretty much f.........d it up every year for me so no, won't be ticking lipstick red. The real issues undermining our culture today comes from the quality collapse of the dept of education. They have departed from any real education & vast swathes of the population now don't know any better. They still believe what they're told on television, which is archetypally dumb, & passes for normal these days. Remember, No News is Good News.
Interesting looking at the new car stats, random fact did you know NZ has the most cars per capita in the world! 837 cars for every 1000 people (that is ignoring 3 miniature countries with a population less than 300K)
https://en.wikipedia.org/wiki/List_of_countries_by_vehicles_per_capita
NZ punching above it's weight again. Could be because of NZ's notoriously aged car fleet. Lots of toranas, vivas, and corollas parked on lawns in case one of the others doesn't get a warrant:
https://www.transport.govt.nz/statistics-and-insights/fleet-statistics/…)3%2C%20and
"The average age of New Zealand’s light passenger vehicle fleet has increased from 11.7 years in 2000 to 14.4 years in 2017, which is older than that in the United States (11.6 years for cars and light trucks in 2016)1, Australia (10.1 years for all vehicles in 2016)2, Canada (9.3 years for light vehicles in 2014)3, and Europe (7.4 years for passenger cars in 2014)"
It's no surprise we have an older vehicle fleet, we are a lower income country, and cars cost more (shipping cost, lack of buying power)
What I find interesting is the surge in hybrid car purchasers, when 5 months from now they could buy the same car with a chunky rebate...
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