What happened Thursday

Business / news

A review of things you need to know before you go home on Thursday; some small TD changes, GDP slip impresses, NZGB yields stable, Aussie jobs rebound, swaps firm, NZD firm, & more

16th Dec 21, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
The Cooperative Bank raised many term deposit rates today by between +5 bps and +10 bps. NBS (Nelson Building Society) also raised many of its TD rates.

A POSITIVE SURPRISE; EXPECT HIGHER RATES
Delta drove GDP down -3.7% in in the September quarter from the June quarter. That was the country's second largest ever quarterly fall in GDP - but is was in line with forecasts and shows increasing resilience in the face of lockdown restraints. Most analysts were relieved. The RBNZ had assumed a -7% retreat when they last did their forecasting. Given high inflation, low joblessness and the pandemic being seen as less of a threat, there seems to be little holding back OCR increases in the first half of 2022.

NOT PROTECTED
Supported by the Government, New Zealand manuka honey producers failed in their bid to trademark the term “manuka honey” in the UK. The British were persuaded the plant grows naturally in Tasmania. They haven't made progress with appellation protection in the United States, Europe, or China either yet. A decision for New Zealand is pending.

ALL 'NORMAL' IN TODAYS NZGB TENDER
The prospect of sharply lower issuance in 2022 hasn't really had investors piling in to today's $500 mln NZ Government bond tenders. But there were 75 bids for the three tranches on offer totaling $500 mln. $1.018 bln was bid and 49 of those bids were successful. The May 2024 $200 mln ended with a yield of 2.02% pa, up from 1.88% two weeks ago. The May 2032 $200 mln went for a yield of 2.36% vs 2.39% two weeks ago. The May 2051 $100 mln went for 2.81% pa vs 2.80% two weeks ago.

A PART-TIME REBOUND
The Australian workforce rebounded by +366,000 jobs in November, much more than the +205,000 expected and dropping their jobless rate to 4.6% from 5.2%. However, +208,000 of those new jobs were part-time. So, the full-time rise of +128,000 was only half of the overall increase expected.

LOCAL PANDEMIC UPDATE - NZ HITS 90%
In Australia, pandemic cases in Victoria were 1618 reported today. There are now 12,252 active cases in the state - and there were another 9 deaths today. In NSW there were 1742 new community cases reported today, and another big jump, with 7,647 active locally acquired cases, but no deaths. Queensland is reporting no new cases. The ACT has 11 new cases. Overall in Australia, 89.7% of eligible Aussies are fully vaccinated, plus 3.8% have now had one shot so far. In contrast, there were four cases in New Zealand at the border, and 91 new community cases today. Now 90.0% are double vaxxed, 94.3% of Kiwis nationally aged 12+ have had at least one vaccination, and the equivalent Australian rate is now at 93.5% of all aged 16+ (92.6% ages 12+).

GOLD FIRMS
In early Asian trading, gold is at US$1778/oz and +US$6 higher than this time yesterday.

EQUITIES MIXED
Wall Street closed higher with the S&P500 up +1.6% with a strong finish in their Wednesday trade after the US Fed decision. The NASDAQ was up +2.2%. Tokyo is up +1.7% in opening trade. Hong Kong is down -1.1% in their opening trade today. Shanghai is flat in their opening trades. The ASX200 is down -0.6% in early afternoon trade in a further falling trend. And the NZX50 is down another -0.7% in late trade today.

SWAPS FIRM
We don't have today's closing swap rates yet. They are likely to be firmer again. The 90 day bank bill rate is up a sharp +4 bps at 0.92%. The Australian Govt ten year benchmark bond rate is now at 1.61% and +3 bps higher. The China Govt 10yr is at 2.87% and unchanged. The New Zealand Govt 10 year bond rate is now at 2.30% and up +4 bps but still below the earlier RBNZ fix for that 10yr rate at 2.34% (-7 bps) which now reflects both the HYEFU and the GDP result. The US Govt ten year is now at 1.47% and +3 bps firmer.

NZ DOLLAR FIRMS
The Kiwi dollar is now at 67.7 USc and +30 bps firmer from this time yesterday on the better-than-expected GDP result. Against the Aussie we are lower at 94.4 AUc. Against the euro we are firm at 60 euro cents. That means the TWI-5 is higher at 72.4.

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BITCOIN FIRMS AGAIN
The bitcoin price has risen by another +2.1% to US$49,091 from the level this time yesterday. Volatility over that period has been moderate at just over +/- 2.5%.

This soil moisture chart is animated here.

Keep ahead of upcoming events by following our Economic Calendar here ».

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41 Comments

by JohnTrz | 16th Dec 21, 4:12pm 1639624360

'Supported by the Government, New Zealand manuka honey producers failed in their bid to trademark the term “manuka honey” in the UK.'

They might have been more successful if they had tried to trademark the NZ honey 'maanuka'.

by Audaxes | 16th Dec 21, 4:46pm 1639626401

The prospect of sharply lower issuance in 2022 hasn't really had investors piling in to today's $500 mln NZ Government bond tenders. But there were 75 bids for the three tranches on offer totaling $500 mln.

The RBNZ joined the action with another $200 million issue of 4 week RB Bills at 0.75%. Total outstanding $600 million

And given that the most recent settlement cash balance is $43.091 billion, the single successful bidder is unlikely to need to sell them to settle a prior day liquidity call. They serve a better purpose as pristine RP eligible collateral.

by Audaxes | 16th Dec 21, 4:33pm 1639625606

The US Govt ten year is now at 1.47% and +3 bps firmer.

Double the taper, zero tantrums. I've been told - vehemently - that without Jay Powell esp. LT USTs would be toast. Not to mention last CPI. Since FOMC announced taper on Nov 3, yields on 10s down 13 bps; 14 bps for the 30s. Irving Fisher was right; the Fed's a cult. - Link

by profile | 16th Dec 21, 4:42pm 1639626128

Surely MSM stoked panic and government policy drove GDP down -3.7% in in the September quarter from the June quarter not "Delta".

" In people < 70 years, infection fatality rates ranged from 0.00% to 0.31% with crude and corrected medians of 0.05%.

Conclusion The infection fatality rate of COVID-19 can vary substantially across different locations and this may reflect differences in population age structure and casemix of infected and deceased patients and other factors. The inferred infection fatality rates tended to be much lower than estimates made earlier in the pandemic."

https://www.who.int/bulletin/online_first/BLT.20.265892.pdf

by Nifty1 | 16th Dec 21, 4:57pm 1639627060

First Omicron case in NZ - MIQ, Bloomfield dramatically holds unscheduled press conferences. Said they're not ruling out future lockdowns if it spreads...

You can see where this is going...

by Brock Landers | 16th Dec 21, 7:12pm 1639635125

As soon as its confirmed to provide good immunity to Delta they should just let it in while its still summer.

by Galloleous | 17th Dec 21, 9:13am 1639685604

Yea nah bro, Ive had enough of that shit.

by CWBW | 16th Dec 21, 5:10pm 1639627841

Looks like the bond market maybe heading towards messy.

Maybe signalling a possible recession.

by JamesM | 16th Dec 21, 5:22pm 1639628531

Don't understand why everyone is getting so excited about Omicron. All reporting overseas is that it spreads quickly/extensively but is very mild. Seems to me the damage caused by lockdowns is now outweighing the benefits.

by muzled | 16th Dec 21, 5:36pm 1639629407

I think the question is, how long before people start realising this isn't the black plague?

This was put up on here by someone else a few days ago but will put it up again as it's well worth a read.

https://www.juliusruechel.com/2021/12/a-half-truth-is-whole-lie-omicron…

by JamesM | 16th Dec 21, 5:24pm 1639628684

By my calcs we have spent circa $100bn to 'save' 5,000 lives. ie $20m per head. Surely this money spent elsewhere (health, education, childcare) would have saved just as many if not more lives?

by bw | 16th Dec 21, 5:41pm 1639629710

Perhaps that was the point all along? Increase the amount of Debt in The System. And look! "Inflation!".

"Never let a good crisis go to waste" and all that.

by False economies | 16th Dec 21, 5:45pm 1639629920

Your calcs might be a bit off? How did you get 5,000?

Uk has population 14 times ours with 147,000 dead (but that's with lockdowns and vaccinations so without it would've been much more), so assuming similar here it would've been just over 10,000 with a crappy late lockdown like theirs. With no lockdown probably 5 times that at least? So now that number's down to at least $2m which is below the "statistical value of a life" used for risk management.

Then add in the effects from long covid (minus negative effects of lockdowns of course!)...

by profile | 16th Dec 21, 6:17pm 1639631878

147,000 dead compared to what? 2020 was only the 10th deadliest year of the century. No one gave a toss when death rates were higher in 2008. If it was such a big deal surely it would have been the deadliest year of the century?

"As of 15 July, Public Health England’s modelling group, with the MRC Biostats Unit, estimated that overall infection mortality rate is approximately 0.096%." which is consistent with the Ioannidis data - a bad flu season. The panic killed more people than the disease - sold a lot of drugs and advertising though.

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarr….

https://questions-statements.parliament.uk/written-questions/detail/202…

by False economies | 16th Dec 21, 6:42pm 1639633362

And if anyone can be bothered to go and download that ONS spreadsheet they'll see that mortality was falling steadily from way back when until 2020 when it shot up to 1043 from 925 per 100,000 in 2019

What caused that then?

by profile | 16th Dec 21, 6:58pm 1639634286

A severe flu season - 925 being the lowest death rate in history - but in the great scheme of things 2020 nothing to write home about. Why was 1946-2008 deadlier than 2020? You can big up 2020 all you like but a death rate of 0.096% is pretty boring. More like an Asian flu of '59 than a Spanish flu or a Black Death.

by False economies | 16th Dec 21, 7:11pm 1639635075

And 2020 mortality was *with lockdowns* and social distancing etc

What would it have been without?

I am not "bigging it up". Just reading the data.

by bw | 16th Dec 21, 7:17pm 1639635447

As you just suggested - we don't know. None of us do. ( mine below 7.17pm)

by False economies | 16th Dec 21, 7:26pm 1639635974

by bw | 16th Dec 21, 7:49pm 1639637360

Your question above - "What would it have been without?"

My reply, "We don't know"

No one can prove a 'what wasn't' = "without"

by profile | 16th Dec 21, 7:43pm 1639637037

Immuno-compromised people lock themselves down all the time - they don't need a bigged up pandemic to do so. A modicum of research shows plenty of studies demonstrating lockdowns made no difference to death rates so that tells you would it would have been like. nb - lockdowns not be conflated with border closure on isolated islands.

by kiwimm | 16th Dec 21, 6:54pm 1639634074

From your own ONS link:

2019 - 925 per 100,000

2020 - 1043.5 per 100,000

So an extra 13% of people died (likely more as the mortality trend has been downward)

by Carlos67 | 16th Dec 21, 10:57pm 1639648669

Not really $2 mil a life when your over 75 though is it ? Hate to say it, but the reality is when people are old they are costing the country money.

by frazz | 16th Dec 21, 6:15pm 1639631707

Hope your not an accountant?

by False economies | 16th Dec 21, 6:44pm 1639633476

Hope *you're* not an english teacher! :)

by Pacman_46 | 16th Dec 21, 7:58pm 1639637910

Hope you're not an English teacher either? lol

by False economies | 16th Dec 21, 8:17pm 1639639025

:) thank fully not!

by JimboJones | 16th Dec 21, 6:28pm 1639632509

Had we not done anything and let covid run loose, many people would have locked themselves down, that would have been disastrous for the economy, government tax take, unemployment, etc.

by bw | 16th Dec 21, 7:17pm 1639635433

Did you lock yourself down when Swine Flu (H1N1) hit? I didn't. My wife contracted it, but I didn't. I've never seen her as ill.

But to us, it was just another flu. It came, it went. I haven't seen Covid19 close up, so have nothing to compare her illness with. But there was no panic. We have no idea whether the same would have applied if we'd just got on with Wuhan Flu rather than Swine Flu. And if there's one thing we all on here know, stats can show you anything you care to imagine.

by Kjeldorian | 17th Dec 21, 7:15am 1639678557

Would you spend $20m to save your wife, parent or child?

by gypsymanz | 17th Dec 21, 9:11am 1639685478

I don't have 20 million but I will happily spend 20 million of your money to do anything!

by taimaiakka0 | 16th Dec 21, 6:05pm 1639631140

Does anyone knows what Jacinda is plaining for quarantine free travel from 14th February as many have booked for Xmas with return after 14th Feb.

by Brock Landers | 16th Dec 21, 6:36pm 1639633003

Depends on the decision they make about letting Omicron in. Probably an excellent idea if it replaces Delta and provides widespread herd immunity. But the Iwi won't like it.

I suspect they are just going to WAIT AND WATCH.

by Nifty1 | 16th Dec 21, 7:05pm 1639634724

Herd immunity LOL yeah right, more like booster immunity...

by Brock Landers | 16th Dec 21, 7:10pm 1639635030

Omicron will provide herd immunity.

Pay attention to what's happening in the UK over the next month.

Santa has a special gift in his sack for EVERYBODY.

There is no hiding from Omicron.

by Nifty1 | 16th Dec 21, 7:18pm 1639635492

Don't know what you've been reading out of the UK?

Omicron likely biggest threat of Covid pandemic so far, says UK health chief

https://www.theguardian.com/world/2021/dec/15/omicron-probably-the-bigg…

This is all trending one way...

by Brock Landers | 16th Dec 21, 8:01pm 1639638100

Indeed. It will infect everybody within a month or two. Then herd immunity.

The Guardian isn't a healthy thing to read.

by muzled | 16th Dec 21, 8:14pm 1639638880

The Bill Gates Daily News isn't healthy? ;)

by Neonlights | 16th Dec 21, 11:01pm 1639648905

I very much like the idea that Omnicron will give us herd immunity with few negative health impacts but there isn’t a scrap of evidence to say this is the case. It’s a very new variant, we don’t yet fully understand if you can catch it twice etc.

You seem very sure - what is it that makes you so confident?

by Rob Reid | 16th Dec 21, 11:39pm 1639651198

Dr John Campbell is putting out a vid a day on Youtube as he reviews data from places like South Africa. It looks promising to him that Omicron is mild and helps build immunity. You are right that it is early days, but a pretty consistent picture has been building since it first hit the radar in Oct.

by taimaiakka0 | 17th Dec 21, 7:46am 1639680387

Biggest problem today is that people who can are not questioning RBNZ and Government.

Is trusting blindly, the right thing and allowing them to get away with their blunder / excuse with no accountability.

Has Mr Orr who was parroting Fed that inflation is temporary - All his policies and money printing was based on this assumption/theory - has he come out to admit that he was wrong and has screwed Big time OR can he assure that his new assumption and expectation on which he is framing his policy now will not go wrong, specially after screwing first time.

Why 40% of his team are quitting after his re-nomination. Only two things possible : Either the team was hoping that he will not be re-appointed (Reasons known to them) and now that he is are resigning OR Mr Orr after his re-nomination asking or creating a situation for them to resign as he is not happy with them (Reason known to Mr Orr).

Government has got a excuse to hide behind pandemic and every failure can be attributed to it (It is but should they not grow and look beyond while continue to manage pandemic)