A review of things you need to know before you go home on Tuesday; farm sales strong, lifestyle block sales weak, credit cards used more, Power quits Westpac, joins TVNZ, swaps hold, NZD weakens, & 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
Aotearoa Credit Union raised rates today.

OFF THE BOIL
In the year to November, the average price for a lifestyle block was $1,145,000. But in November that dipped to $1,010,000. There were 816 lifesyle blocks sold in the month, which was -30% less than the 1158 sold in November 2020, according to REINZ data released today. They trumpeted a 'Spring surge', but actually that is only if you bundle up September, October and November. In fact the surge is well passed and the November data looks pretty weak to us.

GOOD DEMAND DRIVES UP FARM PRICES
Farm sales in November didn't make year-ago levels either, with 188 units sold in the month compared with 207 in November 2020. That took the three month total to 361. However, 188 for a November is +20% higher than the average for the prior four Novembers. The average price is now $37,710 and up a sharpish +10% in a month. REINZ reports that the median price for dairy farms hit $45,000/ha which according to our data is +35% higher than a year ago, and holding these very high per hectare levels that started kicking in in August. 35 dairy farms sold in November (c.f. 23 in November 2020) and even more impressive was the 61 finishing farms sold in the month, the most for this category since March 2018. Prices for finishing units rose +15% in a year on a per hectare basis. We are hearing of global investors buying up farmland in the US and Australia; perhaps some of that demand is behind these higher transaction and price levels but we haven't heard of that - except for European investors who are targeting farms they can harvest carbon tax credits from. Maybe the elevated finishing farm sales are for farming at all, just carbon credit tax arbitrage? The dairy farm demand however will be being driven by higher dairy prices.

EYES ON DAIRY PRICES
There is another dairy auction tomorrow morning, and the derivatives market is suggesting prices are due to rise +3.2% for WMP and +2.7% for SMP. Given the NZD has fallen -1% since the last auction, there is a good floor forming under the farmgate milk price payout forecasts. Westpac's $9/kgMS is looking a safer bet.

McKINNON REPLACES McKINNON
The NZ-funded, NZ China Council has a new chairperson, ex-ambassador John McKinnon. Apart from being New Zealand's ambassador to China in two separate postings, he has also served as Director of the External Assessments Bureau from 1995 to 1999, as Secretary of Defence from December 2006 to 2012, and was executive director of the Asia New Zealand Foundation from 2012 to 2014. He is replacing brother Sir Don KcKinnon who has retired.

MORE USE, LESS ABUSE
Credit cards got dusted off in November and used more aggressively than we have seen for a while. More than $4 bln was charged on them in the month, the most for a November ever, and +4.8% more than in November 2020. But we are not letting balances build up as much, with just on $6 bln owing on them which is -6.3% lower than a year ago. Now less than 55% of these balances incur interest, the equal lowest ever.

SIMON POWER DEPARTING WESTPAC, JOINING TVNZ
Simon Power is leaving Westpac after being passed over for the permanent CEO position to Catherine McGrath. His next gig is at TVNZ as their new CEO, replacing Kevin Kenrick and starting in March 2022. He was with Westpac for ten years after a 12 year 'career' in Parliament as a high-performing cabinet minister in the Key Government. Government-owned TVNZ is being lined up to merge Radio NZ by the current Labour Government in a confusing strategy that seems to mix the commercial business with 'public service' goals.

NZ PIPELINE WATCH
Last week, the NZX50 capitalisation fell -1.1%. The largest falls were by PushPay (PPH, #27) which dropped -10.7% in the week, Fonterra (FSF, #48) down -7.8%, and Fisher & Paykel Healthcare (FPH, #1) down -2.9%. The weekly winner was Sky Network (SKT, #43) which continued its stellar rise, up +8.1%. You can inspect profiles for all NZX50 companies here, which now have an expanded set of metrics to compare, as well as charts tracking each company's changes (including their share price).

MOVING OUT
There were more people departing from, than arriving into, Australia during the pandemic totaling -89,000 people, reversing their historical migration pattern. This led to a decline in net overseas migration in every state and territory in 2020-21, according to official data.

STAYING PUT
But Kiwis living in Australia will have to wait until the end of February before they can return home, amid fears of Omicron.

LOCAL PANDEMIC UPDATE
In Australia, pandemic cases in Victoria were 1243 reported today. There are now 13,355 active cases in the state - but there were 6 deaths today. In NSW there were 3057 new community cases reported today, and another big jump, with 18,798 active locally acquired cases, and 2 deaths. Queensland is reporting 86 new cases. The ACT has 16 new cases. Overall in Australia, 89.4% of eligible Aussies are fully vaccinated, plus 3.6% have now had one shot so far. There are increasing reports of testing and hospital facilities being overwhelmed by demand.  In contrast, there were no Omicron cases in New Zealand at the border, and 28 new community cases today. Now 90.8% are double vaxxed, 94.5% of Kiwis nationally aged 12+ have had at least one vaccination, and the equivalent Australian rate is now at 93.0% of all aged 12+.

GOLD SLIPS
In early Asian trading, gold is at US$1790/oz and -US$12 lower than this time yesterday and marginally lower than where it closed in New York.

EQUITIES MOSTLY POSITIVE
Wall street closed lower with the S&P500 down -1.1% in its Monday trading. The DJIA and NASDAQ were even lower. Tokyo, which fell a hard -2.1% yesterday is recovering much of that today, up +1.6% in early trade. Hong Kong is starting today with a +0.6% recovery, and Shanghai with a +0.2% recovery in very early trade. The ASX200 is up +0.5% in early afternoon trade and making back all of yesterday's fall. The NZX50 which had a strong gain yesterday, is level-pegging near the end of its Tuesday session.

SWAPS LITTLE-CHANGED
We don't have today's closing swap rates yet. They are likely to be soft. The 90 day bank bill rate is unchanged at 0.94%. The Australian Govt ten year benchmark bond rate is up +2 bps at 1.59%. The China Govt 10yr is little-changed at 2.88%. 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% (unchanged). The US Govt ten year is now at 1.43% and +5 bps firmer.

NZ DOLLAR GOES LOWER
The Kiwi dollar is now at 67.1 USc and even lower than its open this morning, down another -½c in a day. Against the Aussie we are also marginally softer at 94.5 AUc. Against the euro we are down -½c at 59.5 euro cents. That means the TWI-5 is now just under 71.9 and threatening its four month low again.

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BITCOIN ON HOLD
The bitcoin price has marked time at US$46,682 and almost exactly at the level at this time yesterday. Volatility over the past 24 hours has been moderate however at just over +/- 2.1%.

This soil moisture chart is animated here.

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