Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Heartland Bank raised all three of its market-leading fixed home loan rates by between +35 bps and +55 bps. That results in the new rates still being the lowest offers from any bank.
TERM DEPOSIT RATE CHANGES
The Cooperative Bank raised a savings rate by +5 bps.
BUYERS MARKET DUE?
CoreLogic says there's a strong possibility of a buyer's market developing in 2022 as new listings surge. They see bargain house prices as likely.
UNRESTRAINED AGAIN
After restraining themselves for 2020 ('restraining' being defined as keeping increases below +3% pa), local authorities are pushing their rates and regulatory income up fast again. In September 2021, the increase was +8.1% pa. The average increase over the past 25 years has been +5.5% per year. Prior to the GFC increases in this monopoly funding exceeded +10% pa regularly. Since the GFC there was a brief jump in 2015, and then a race up in 2018-2019. Now they are back with more substantial claims.
DAIRY DELIGHT
Westpac economists are now forecasting a 'windfall' for farmers of a milk payout $9/kgMS as they pick the Kiwi dollar will get down as low as 66 USc next year. See a summary of all analysts forecasts for the payout here (bottom of page).
UBIQUE
Cyber threats rose during the third quarter, says CERT NZ, with a smorgasbord of threats.
RBA HAILS CBDC RESEARCH A SUCCESS
The Reserve Bank of Australia (RBA) says a wholesale central bank digital currency (CBDC) research programme, named Project Atom, has demonstrated the potential for a wholesale CBDC and asset tokenisation to improve efficiency, risk management and innovation in wholesale financial market transactions. Commonwealth Bank of Australia, National Australia Bank, Perpetual, ConsenSys and King & Wood Mallesons also featured in Project Atom. The RBA says the project demonstrated the benefits of collaboration and it will continue researching CBDCs.
BIG DATA, NO REACTION
After Wall Street closed today, Fed data on consumer credit came in unexpectedly weak for October (and September data was revised down). And Japan reported a final Q3-2021 GDP contraction that was much more than expected. Both are notable misses, but don't seem to have moved markets at all.
RECORD LOW
Australia's birth rate fell sharply in 2020 to a record low 11.5 live births per 1000 population. (New Zealand's is even lower at 11.2 on the same basis.) Eyes will now be on the 2021 lockdown consequences.
LOCAL PANDEMIC UPDATE
In Australia, pandemic cases in Victoria jumped to 1312 reported today. There are now 11,331 active cases in the state - and there were another 5 deaths today. In NSW there were another 403 new community cases reported today, another jump, with 3,196 active locally acquired cases, and one death. Queensland is reporting one new case. The ACT has 8 new cases. Overall in Australia, just over 88% of eligible Aussies are fully vaccinated, plus a bit under 5% have now had one shot so far. In contrast, there were five cases in New Zealand at the border, and 90 new community cases today. Now 87.6% are double vaxxed, 93.5% of Kiwis nationally aged 12+ have had at least one vaccination, and the equivalent Australian rate is now at 93.0% of all aged 16+ (92.0% ages 12+).
GOLD FIRM
In early Asian trading, gold is at US$1787/oz and +US$8 higher than this time yesterday, and higher than the close on Wall Street.
EQUITIES RISING
On Wall Street, the S&P500 ended up +2.1% in their Tuesday trading taking the two-day advance to +3.3%. Tokyo has opened up +0.9% while Hong Kong has given up its opening bounce to be flat in early trade. Ditto Shanghai. The ASX200 is up +1.0% in their early afternoon trade today, while the NZX50 is up +1.2% in late trade.
SWAP & BONDS RATES HOLD
We don't have today's closing swap rates yet. There is likely to be little movement today. The 90 day bank bill rate is unchanged at 0.88%. The Australian Govt ten year benchmark rate is now at 1.66% and up +4 bps from this time yesterday. The China Govt 10yr is at 2.87% and up +2 bps. The New Zealand Govt 10 year rate is now at 2.40% and unchanged, but still below the earlier RBNZ fix for that 10yr rate at 2.46% (+5 bps). The US Govt ten year got as high as 1.48% am hour ago, but is back to 1.46% now and only +1 bps higher than this time yesterday.
NZ DOLLAR FIRMS
The Kiwi dollar is now at 67.8 USc and a little firmer from this time yesterday. Against the Aussie we are -½c softer at 95.2 AUc. Against the euro we are firmish at 60.1 euro cents. The TWI-5 is slightly higher at 72.6.
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BITCOIN SLIPS
The bitcoin price has slipped to US$50,465 and down -1.1% below the level at this time yesterday. Volatility since this time yesterday has been modest at just on +/- 1.9%.
PLEASE NOTE:
There will be no 4pm Review tomorrow. The whole interest.co.nz team who bring it to you will be out of the office tomorrow at our end-of-year function, 'reflecting' on 2021 and looking forward to 2022 - and our holidays before that.
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42 Comments
The Reserve Bank of Australia (RBA) says a wholesale central bank digital currency (CBDC) research programme......
Gearing up for and preparing the 'big reset'. To be honest, this is quite clearly being smoke signaled among the developed countries and even in Nu Zillun, but I don't think the sheeple or even the media are really paying any attention. Too many other things to worry about.
https://www.youtube.com/watch?v=dSyWoAd0gS8
George links it all together perfectly.
How the CBDC, Health Passports, Social Credit scores, and Internet of Bodies (all your health data like heart rate, exercise activities) could be linked together in the future.
George is take on the "Corona" virus has put me off him...Simon Dixon sums it up better here
After Wall Street closed today, Fed data on consumer credit came in unexpectedly weak for October (and September data was revised down). And Japan reported a final Q3-2021 GDP contraction that was much more than expected.
The Productive Use Of Awful Q3 Productivity Estimates Highlights Even More ‘Growth Scare’ Potential
What the Bureau of Labor Statistics said today was that US labor productivity absolutely plunged during the third quarter. The reason, in statistical terms, was very simple: total hours worked rose more than total (private) output had; a lot more, way, way too much more.
The raw numbers: hours increased by 1.8% in Q3 2021 from Q2, an annual rate of 7.4% which largely agrees with the other labor data. This still leaves total hours (on a quarterly basis) about 1% less than the number worked all the way back two years ago during Q4 2019; which, sadly, also matches the rest of the labor data therefore succinctly summing up the actual state (pitiful) of the labor market, Q3’s rate of change notwithstanding.
However, as we know already from the latest GDP numbers, output had been “surprisingly” weak. Private output (a subset of real GDP as produced by the BEA) only gained 2.23% (annual rate) from Q2 to Q3, therefore the difference between hours and o output therefore productivity was an enormous -5.15%!
This was the worst quarter for labor productivity in more than sixty years.
"a buyer's market developing"
That....is the last thing we need. We require a market where no one wants to touch property, even with someone else's bargepole. As long as we sustain the notion that "You can't lose with property, mate!" any buying will delay the necessary shake-out.
Not until we've been through the 'stocks of '87' and the 'finance companies of '07' stages will the property market have been recalibrated sufficiently for long-term market sustainability. Anything less will just see social and economic sanity delayed. (NB: This was all so avoidable, even 10 years ago, and yet here we are. Debt soaked and wondering how we keep the magic going. "It's a buyer market, mate. Better get in now!")
No follow the 'Fed". The RBNZ could just buy mortgages, bundle them up, dice em, slice em, so nobody knows who owns what and call them an asset like a MBS. The RBNZ could then convince the public they are just exchanging assets and not creating money, just allowing banks to lend more. Then they could sell the 'Assets' to unsuspecting hedge funds or investors anywhere in the world, because house prices in Auckland never go down. The private corporation fictitiously called the 'Federal Reserve", lender of last resort, will keep interest rates near zero forever and when their own banks squeal about liquidity, throw in a little QE. Damn the wage earners and savers, the productive part of society, we don't need them to create wealth. Those debt slaves will just be the fall guy when the scheme collapses. Follow the Fed.
If prices start falling and interest rates rise, its hard to imagine anyone buying:
1) Investors: Why buy if there is no capital gain (and instead a loss). The rent does not even cover interest payments.
2) FHBs: If they couldn't buy at 2.5% interest rates, how are they going to at 5%?
3) Existing owners: Its hard to upsize / downsize / etc if no one wants to buy your house.
Undoubtedly demographics will (and is starting to) play a major global role economically in the coming decades, with a number of countries/areas ( some surprising ) seeing a surge in elderly and a decline in working age groups.. New Zealand, although its birth rate is currently low , is significantly better positioned than many. Whether money flows out from the aging countries to the younger ,and investment strategies change only time will tell,
Well that worked out well - as predicted by virologists who warned against vaccinating during a pandemic.
"...Recent studies confirm that natural selection is the dominating mechanism of SARS-CoV-2 evolution, which favors mutations that strengthen viral infectivity. Here, we demonstrate that vaccine-breakthrough or antibody-resistant mutations provide a new mechanism of viral evolution. ...By tracking the evolutionary trajectories of vaccine-resistant mutations in more than 2.2 million SARS-CoV-2 genomes, we reveal that the occurrence and frequency of vaccine-resistant mutations correlate strongly with the vaccination rates in Europe and America."
What's your point Profile? That vaccines shouldn't have been or be developed? The study you cite even says:
We anticipate that as a complementary transmission pathway, vaccine-breakthrough or antibody-resistant mutations, like those in Omicron, will become a dominating mechanism of SARS-CoV-2 evolution when most of the world’s population is either vaccinated or infected
So, even if we didn't vaccinate (like you seem to be wanting) you'd still get natural selection favoring other variants of virus once people had immunity to the initial variants via exposure. Except, in your implied ideal world, millions more would be dead for the same long-term outcome. That seems pretty dumb if you ask me.
Hi Pluto. The key point would be ‘Here, we demonstrate that vaccine-breakthrough or antibody-resistant mutations provide a new mechanism of viral evolution.’ So now we have a new mechanism for viral evolution - by releasing a leaky therapy during a pandemic. As predicted. If you own Pfizer shares it is a fantastic development but if you want to keep a population healthy against coronaviruses you can’t beat M. Nature.
For example - “Ultrapotent antibodies against diverse and highly transmissible SARS-CoV-2 variants
Our study demonstrates that convalescent subjects previously infected with ancestral variant SARS-CoV-2 produce antibodies that cross-neutralize emerging VOCs with high potency.”
https://www.science.org/doi/full/10.1126/science.abh1766
So by all means protect to vulnerable but by using leaky gene therapy on healthy people has lead to – ‘a new mechanism of viral evolution.’ As opposed to ‘Ultrapotent antibodies’ from subjects previously infected with ancestral variants.
It's sinister that public health officials/big pharma insist only (no other health or treatment measures) on a leaky therapy for healthy adolescents when data from Sweden, Germany, Singapore etc. demonstrates healthy adolescents are at zero risk of dying from covid.
As for your millions dying hand wring – compared to what? Per capita more people died in the Asian flu of ‘59 and 1945-2008 UK. Did you give a toss about the UK death rates earlier in the century?
https://www.medrxiv.org/content/10.1101/2021.11.30.21267048v1.full.pdf
https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarr…
Low birth rates? We won't mention massive immigration, followed by massive property speculation, making families unaffordable to those in the prime of their reproductive years. But hey, why not govern on behalf of foreign countries population overgrowth, instead of NZ tax payers?
One major thing though is that the govt has finally brought in the phased in extension of time before recent immigrant oldies can get NZ super. This will have a huge effect on the numbers of unskilled young people who come here with the sole aim of bringing in their ailing old parents.
I find it really weird how recently my views and Tony Alexander's views have converged so much.
Here he is again, with some warnings for the construction sector, something I've been saying for quite a while (definitely predating Tony...Tony you copy cat!)
https://www.oneroof.co.nz/news/40648
He is actually very good (NZ property, NZ interest rates, macro trends) if people take the time to listen carefully to the details of what he is saying and avoid the editors headline. I have followed him, among others, since about 2014 and, he was right and the others were wrong. Unfortunately, as we’ve become more polarised people are too quick heap him the spruiker bucket (just as bears get dumped in the DGM bucket) without paying attention to why he’s saying something.
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