A review of things you need to know before you go home on Monday; trade deficit swells, Xmas spending rush, consumer sentiment dips, cheap electricity, cartel alleged, swaps lower, NZD stable, & more

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
None here today either.

SWINGING NEGATIVE FAST
New Zealand's trade balance is worsening fast. In November 2021 it was a deficit of -$864 mln, far worse than the November 2020 surplus of +$75 mln and the November 2019 surplus of +$380 mln. For the year to November, that adds up to a deficit of more than -$6.0 bln, an uncomfortable level of about -1.7% of GDP. However it is far from a record which was set in February 2006 at -4.3% of GDP when the trade deficit reached -$7.3 bln in a year. Remember this was a trade surplus of +$3.3 bln in the year to November 2020, so the change from then has been sharp and negative, almost -$10 bln in twelve months. It is getting zero coverage; no-one seems to care.

RECORD SPENDING
Worldline (Paymark) is reporting that with just five days left till Christmas, spending at retail stores is trending at record levels. While the easing of Auckland’s Covid-19-induced boundary restrictions last week allowed for more movement of people across the country resulting in higher spending on accommodation in the Bay of Plenty, Waikato and Auckland/Northland regions, the dominant pattern across the nation was the ongoing surge in spending ahead of Christmas Day.

'HOLIDAY BLUES'
However, Westpac is reporting its consumer sentiment survey shows confidence has continued to fall, and there are now more New Zealanders who are pessimistic about the economic environment than there are those who are optimistic.

'OUR FREINDLY BANKERS'
According to a Federated Farmers survey of members, farmers like their bankers a bit more. This survey reports farmers are feeling slightly more satisfied with relationships with their banks but interest rates are starting to rise and some are reporting a tougher attitude from lenders. Results from the November Federated Farmers Banking Survey show 67% of the more than 900 respondents are satisfied with their bank relationship, up 5.5 points on the May survey and a break in what had been a steady erosion in satisfaction since 2017 (when it was over 80%).

A TEN YEAR LOW
Wholesale electricity demand is sinking fast, down -5.9% from two weeks ago. And with it, wholesale electricity prices have dived to very low levels. Your power bills are about to fall (/sarc, of course they aren't). Hydro lake inflows are above average (there is plenty of fresh water), and hydro lake levels are also above their long term averages. Prices over the past few days sank to their lowest since September 2010. Also recall, record high prices occurred (unnecessarily) on August 9, 2021.

REFRESH GATHERS PACE
Westpac NZ names new Chief Financial Officer & new Chief Technology Officer. It is continuing its board and executive refresh through the appointment of Tania O'Brien as CFO and Martin Gaskell as CTO.

FREIGHT CARTEL ALLEGED
The Commerce Commission has filed civil proceedings in the High Court against two international freight forwarding companies, Mondiale Freight Services and Oceanbridge Shipping, and four individuals associated with the companies, alleging each company entered into and gave effect to cartel agreements.

FAKE NEWS RUMOUR SPOILING CHRISTMAS
The RBNZ says an urban myth picking up speed in Christchurch has genuine banknotes being refused and damaged, and honest Cantabs accused of passing counterfeits. “People are being told that you can tell a fake banknote by scraping it with a coin, and if the printing comes off revealing the plastic then it’s a fake. This is completely false, not one of our recommended ways to check a banknote, and actually illegal defacement”, says Peter Northcote from the Bank’s Money and Cash Department.

WEIGHING AGAINST SLOWDOWN
China cut -5 bps from its 1 year prime loan rate today, but left its 5 year rate unchanged. That is expected to save companies about NZ$20 bln in interest cost over a year, and is part of Beijing's promise to help its struggling SMEs. (See chart at the bottom of this page.)

SUPPLY OVERWHELMS
In Australia, auction clearance rates slumped over the past week after a rush of properties for sale. But at least there, more are still selling than not - unlike in Auckland.

LOCAL PANDEMIC UPDATE
In Australia, pandemic cases in Victoria were 1302 reported today. There are now 123,175 active cases in the state - but there were no deaths today. In NSW there were 2501 new community cases reported today, and another big jump, with 16,225 active locally acquired cases, but also no deaths. Queensland is reporting 49 new cases. The ACT has 13 new cases. Overall in Australia, 89.4% of eligible Aussies are fully vaccinated, plus 3.5% have now had one shot so far. In contrast, there were three cases in New Zealand at the border, and 69 new community cases today. Now 90.2% are double vaxxed, 94.5% of Kiwis nationally aged 12+ have had at least one vaccination, and the equivalent Australian rate is now at 92.9% of all aged 12+.

GOLD FIRMER
In early Asian trading, gold is at US$1802/oz and firmer than where it closed in New York on Saturday by +US$3.

EQUITIES MOSTLY NEGATIVE
The NZX50 has started the week up +0.2%, in contrast to the ASX200 which is down -0.2 in early afternoon trade today. Tokyo has opened down a very sharp -1.8% in early trade. Hong Kong is down -0.7% and Shanghai is down -0.5% in their early trade openings. The S&P500 futures signal a -0.8% fall is in store for Wall Street tomorrow.

SWAPS SOFT & FLATTER
We don't have today's closing swap rates yet. They are likely to be soft. The 90 day bank bill rate is up however +1 bp at 0.94%. The Australian Govt ten year benchmark bond rate is down to at 1.57%. The China Govt 10yr is little-changed at 2.87%. The New Zealand Govt 10 year bond rate is now at 2.24% and down -3 bps and still below the earlier RBNZ fix for that 10yr rate at 2.29% (-2 bps). The US Govt ten year is now at 1.38% and -5 bps softer.

NZ DOLLAR STAYS LOW
The Kiwi dollar is now at 67.4 USc and marginally firmer from where we opened this morning. Against the Aussie we are also marginally firmer at 94.7 AUc. Against the euro we are still at 60 euro cents. That means the TWI-5 is now just under 72.2 and touching its four month low again.

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BITCOIN SLIPS AGAIN
The bitcoin price has fallen by -1.2% to US$46,607 from the level it opened at this morning. Volatility over the past 24 hours has been moderate at just over +/- 2.2%.

This soil moisture chart is animated here.

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