Here's our summary of key economic events overnight that affect New Zealand with news markets are reacting today to the rising expectation that the Fed will move against the inflation threats earlier than they had priced in.
But first, today's dairy auction was a good one - even if perhaps not quite as good as the futures market was expecting. Overall prices were up +4.6% in USD terms and +5.2% in NZD terms. Starring was the butter price, rising to a record high and breaching the US$6000/tonne mark for the first time ever. The global recovery in the foodservice market is one driver of these strong prices. The other is a falloff in global dairy production, and that includes New Zealand. But it is a good result when local production will be down -1.6% but prices are up +4.6%. Clearly this will be positive for the farm gate milk payout. On a formula payout calculation basis, this would support a NZ$9.10/kgMS price if these prices lasted for the rest of the season - and it is likely that many analysts will be raising their forecast after this latest auction.
Lower milk production is only a part of it. Agricultural production is slipping worldwide and that is keeping prices very high, and they will probably go much higher yet - making life very hard for emerging economies.
But the big overnight international financial market news is the emergence of a taper tantrum on Wall Street as markets reprice for the end of QE, earlier Fed rate hikes to push back against inflation, and sharply rising benchmark bond yields. In the situation going forward, asset valuations won't be supported by cyclically low yields.
And the booming US economy may come off the boil somewhat. Certainly the NY Fed's Empire State factory survey suggests that things leveled off abruptly in response to the Omicron surge, but that expectations remain buoyant in this key manufacturing region. Prices remain elevated and investment intentions remain very strong.
Canadian housing starts eased back in December, although they were revised higher for November.
Japan's industrial production data for November was up a strong +5.1% year-on-year, and up a stronger +7.0% from October. This augers well for Japan, and also suggests international demand for their high-tech exports is rising.
The Bank of Japan raised its inflation forecasts but said it was in no rush to change its ultra-loose monetary policy, as rising prices fan speculation it may soon signal a shift in its decade-old stimulus experiment.
Also improving is Germany economic sentiment which rose strongly and unexpectedly, even if their current conditions haven't improved. Germans seem to like what they see when they look ahead in 2022.
In the US, there is an emerging high-stakes struggle between high-tech telecom companies and the airline industry. It seems that older and especially wide-body passenger jets, of which there are thousands still in service, are at safety risk from the rollout of the US's new 5G services interfering with airplane electronics. Much aircargo is carried on older widebody aircraft. Some international airlines are grounding flights to the US. All this of course adds a further impediment to global supply chains.
In China, more details are emerging of their efforts to get their struggling economy going again. China’s top state planner said that it will "appropriately" front-load infrastructure investment. Plus, financial markets are expecting some big official reserve ratio cuts over the next few months. Not long ago, a Chinese economic slowdown would have assumed to have had global implication. But it isn't working out like that it seems. The world is generally immune to their woes, although there will be some emerging markets badly affected no doubt.
In Australia and NSW, there were 16,067 new community cases reported yesterday, a sharp fall, now with 326,356 active locally-acquired cases (and undoubtedly an undercount), and 33 more deaths. There are now 2,850 in hospital there. This is confirming the NSW Chief Health Officer's recent warning there will a high number of deaths in coming days. In Victoria they reported 20,180 more new infections yesterday, and little relief. There are now 235,035 active cases in that state - and there were 22 deaths. A "Code Brown" (mass casualty event expected) has been declared in most major Victorian hospitals. Queensland is reporting 15,962 new cases and 16 new deaths. In South Australia, new cases have risen to 4,685 yesterday with no more deaths. The ACT has 1601 new cases and 1 death and Tasmania 1310 new cases. Overall in Australia, 73,580 new cases have been reported.
The UST 10yr yield opens today at 1.86% and up +7 bps from where we closed last Friday. The UST 2-10 rate curve starts today little-changed at +81 bps. Their 1-5 curve is slightly steeper at +109 bps, while their 3m-10 year curve is much steeper at +181 bps. The Australian Govt ten year benchmark rate is up +7 bps at 1.98%. The China Govt ten year bond is down -3 bps at 2.77%. The New Zealand Govt ten year is down -2 bps at 2.52%.
Wall Street has opened after their long holiday weekend sharply lower on the rising yields in a bit of a taper tantrum. The S&P500 is down -1.8% in afternoon trade. Overnight European markets traded about -1.0% lower. Yesterday, Tokyo fell -0.3%, Hong Kong fell -0.4% but Shanghai rose +0.8%. The ASX200 was down -0.1% yesterday, but the NZX50 rose +0.1%.
The price of gold starts today at US$1815/oz and down -US$5.
And oil prices start today slightly firmer at just over US$84/bbl in the US, while the international Brent price is now just under US$86.50/bbl. These prices are seven year highs. Not helping are terror attacks on oil installations in the Middle East.
The Kiwi dollar will open today lower at 67.7 USc. Against the Australian dollar we are softish at 94.2 AUc. Against the euro we are holding at 59.7 euro cents. That means our TWI-5 starts the today at 72.1 and a slip since this time yesterday.
The bitcoin price has moved down by another -1.3% to US$41,614. Volatility over the past 24 hours has been modest at +/- 1.4%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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85 Comments
That 5G confusion in the USA is simply unbelievable. At the eleventh hour. Oh dang, this might make some planes fall out of the sky.Even The Far Side couldn’t have dreamed up such a farcical cartoon. Appreciate the quagmire of bureaucracy is ever increasing worldwide but if this example can occur in supposedly the globes’s most modern and powerful nation, then we are all likely doomed.
Seems to be related to specific equipment
https://www.vox.com/recode/2022/1/12/22878622/5g-airplanes-c-band-inter…
Petition to rename New Zealand "The Hermit Queendom", now that the government has decided to try and pull a King Canute (I guess they never understood the meaning of the story) and close the border indefinitely to returning Kiwis; and how nice of them to do it via an 8pm press release and Tweet!
Many are stranded and do not think will open border till mid / end of year, as Jacinda herself said that it is when and not IF, it will spread in community. Assuming that it start spreading in Feb / March and as have seen that overseas it peak in a month or two so expecting lockdown Till may or June at earliest.
Fail to understand, once booster has been taken by most, should try to bring about normalcy asap considering covid19 as endemic. If expecting most to have got boosterby Feb end should announce their plan than going forward or just say that we will be shut as long as covid remains in any form - need clarity.
Government has succeeded in getting the High Court hearing into the legality of MIQ, delayed by three weeks. In the same piece usual expert Baker espouses holding back of MIQ places is the right thing to do, omicron cases can’t be handled at the moment. As usual no mention as to when they may be able to be handled and what is being done in order that it might be. Again simply more palaver, softening the ground, prior to confirming the border will remain closed indefinitely. Becoming of somewhat risible Catch 22 status. No new MIQ places until the border is open and the border won’t open until there is no omicron in MIQ. Goodbye 2022 year of freedom, the promise that never was a promise.
They have an agenda, not even really started, of taking NZ deeply to the left, in socialist terms for want of better description. Thus the priority on centralisation. Health Boards no community representation. Water rights, removed from the community. That requires to remain in power. That requires to remain popular, keep winning the polls with the ever present advantage of the incumbent. So weigh up the odds. A highly distraught population suffering multiple covid mortalities is a greater threat to that of the downside of isolation, business, commerce & stranded NZ travellers. QED.
Only two scenarios now:
1) The government knows that Omicron will get into the community (either because it already is via this MIQ leak OR there are genuine plans afoot to reopen the border and it will get back in) but they don't want to be seen to be effectively committing to bringing Omicron into the country so will try and make it look like Omicron just "slipped through the cracks" and they did everything they could. Remember that plenty of Kiwis are still acolytes of the Cult of Zero Covid, and are happy to live in the Hermit Queendom as they aren't personally affected - they would not be happy to be told that the border is reopening.
2) The border is shut indefinitely, probably until just before the next election where it will be reopened with just enough time to make everyone think "wow thanks Labour, we are back to normal now" and then go and diligently put their tick in the correct box. The government will not formally announce an indefinite border closure, but will instead continually tease a reopening only to pull it at the last minute (e.g. in late Feb we will be told that we just need to get a bit more boosting done before we reopen) The media will get a few more $$$ thrown their way to ensure the apocalypse occurring in the UK, Australia etc is "accurately portrayed".
Bonus for the government - by this point many Kiwis would have been out of the country for more than three years, so cannot show their displeasure at the ballot box.
I would like the reality to be scenario 1, but I suspect it is scenario 2. Happy to be proven wrong (and I am not personally affected by the MIQ/border issue beyond not being able to go on holiday ... I have no skin in the game)
Same ideology as the Dutch fable about the boy with his finger in the dyke isn’t it. The thing is MIQ is being overwhelmed sure enough, but what about the other border, customs areas, ports etc. Delta very nearly breached at Tauranga Port, omicron is far more slippery. The government quite rightly pushed for a high vaccination level. This has more or less been reached now. They now need to come clean about the other side of the coin. That is regardless of vaccination the hospitals will still be overrun. The Dutch boy won the day, this government is on the brink of losing it, all the two years of delaying tactics to no avail, the inevitable is arriving but instead of bolstering hospitals etc $millions has been spent paying consultants to scheme up a monolithic bureaucratic structure in Wellington. Almost as crazy, in the midst of a pandemic, as inflicting a pay freeze on nurses and suchlike.
Yep the promise of freedoms and being able to get the relatives home from O/seas or being able to go and see them and get back into the country if you have been dble jabbed was just BS. Now hundreds of thousands just have no trust in what the government say, they go back on their promises in a heart beat. How are they going to sell the Booster.
Most people are just vaccinated and going about their everyday lives without hysterical posting on social media. Then we have the anti-vaxxers out their yelling about "fear", posting misinformation about kids fainting etc, etc. They don't seem particularly self-aware.
Yeah there are hysterics out there saying "the virus is literally finding unvaccinated people". Who could ever dreamed it would be so omnipotent!
https://www.bloomberg.com/news/articles/2021-10-03/n-z-locks-down-secon…
A poor turn of phrase for the fact unvaccinated people have been infected and affected more, sure. Something to latch on to and cling to, eh. Go hard.
Yet again...most of us are going about our lives and not ranting about fear, repeating lies about fainting children on social media etc. Whoever dreamed some folk would spend so much effort ranting about people "living in fear". Surely they've got better things to do.
https://twitter.com/nayibbukele/status/1478201251737317385?s=20
We should be encouraging healthy eating and exercise ^^, like all the smart people have been saying for the last 2 years. Rather than lock everyone inside.
They are not selling the Booster they are basically forcing you to take it to keep your passport current. Not being vaxxed has been a bit inconvenient for me as I had to find someone to cut my hair and a restaurant that doesn't want to see a pass. Burger King etc is now limited to drive through but I can live with it. Yep you have all been conned because the majority of people took it on the premise that it would then be business as usual and everyone could get on with life, this is clearly NOT the case.
"EU regulators warn against repeated COVID booster shots
European Union's vaccine regulators say excessive use of COVID booster shots could impair immune response, lead to system 'overload'.
...Marco Cavaleri, chief of the agency’s vaccines committee, warned against the overuse of booster shots, saying they cannot be “repeated constantly.”
“We are rather concerned about a strategy that entangles repeated vaccinations within a short term.”
“We cannot really continuously give booster doses every 3-4 months.”
Boosters “can be done once, or maybe twice, but it’s not something that we can think should be repeated constantly,” Cavaleri continued.
“There are two concerns here: If we have a strategy in which we give boosters, let’s say, every four months approximately, we will end up potentially having problems with the immune response, and the immune response may not be as good as we would like it to be. So we should be careful in not overloading the immune system with repeated immunization.”
“And secondly, there is the risk of fatigue in the population with the continuous administration of boosters.”
They are not yet. I'm not sure there is mass public support for 4 monthly boosters. I think uptake has been underwhelming when you consider everyone up to the 16 September is due (and these will be the easy people to convince). They wont bring in mandates until the vast majority are vaccinated. It will get a little tricky to force half the population get vaxed and then explain it when it does not work well.
Boosters for our current delta wave seem very unnecessary at the moment.
Maybe the Govt. is delaying until everyone's had their booster before letting Omicron free. Or wait until we've got the Omicron vax.
“One preprint study found that after 30 days the Moderna and Pfizer vaccines no longer had any statistically significant positive effect against Omicron infection, and after 90 days, their effect went negative – i.e. vaccinated people were more susceptible to Omicron infection,” they wrote.
“Confirming this negative efficacy finding, data from Denmark and the Canadian province of Ontario indicate that vaccinated people have higher rates of Omicron infection than unvaccinated people.”
Dr Montagnier and Mr Rubenfeld added that while there was “some early evidence” that boosters may reduce Omicron infections, “the effect appears to wane quickly, and we don’t know if repeated boosters would be an effective response to the surge of Omicron”.
Their comments come after the UK’s head vaccine adviser, Professor Sir Andrew Pollard, who helped develop the Oxford-AstraZeneca vaccine, called for an end to ongoing mass vaccination.
“We know that the two doses of the vaccine offer very limited protection, if any,” Dr Bourla said.
“The three doses with a booster, they offer reasonable protection against hospitalisation and deaths – against deaths, I think, very good, and less protection against infection. Now we are working on a new version of our vaccine, the 1.1, let me put it that way, that will cover Omicron as well. Of course we are waiting to have the final results, [but] the vaccine will be ready in March.”
“Because the protection against the hospitalisations and the severe disease – it is reasonable right now, with the current vaccines as long as you having, let’s say, the third dose.”
He added that it also remains unclear whether a fourth shot will become necessary, with Pfizer set to conduct experiments on the issue.
True. This Government must be voted out at the next elections, simple as that. Pity that we need to wait until next year for this. Yes, National has all sort of issues and some questionable policies and characters, but now I have reached the point that I do not care if the alternative is not very appealing either. Now the issue is simply that we can't afford to continue with the direction this Government is taking in managing the country.
I don’t think this government is alone in this but is probably the worst in having the need to try & overcome their inadequacies by employing “outside help.” Recent publication record an extraordinary growth in bureaucracy under this government in particular. The problem then is if that advice or policy is flawed and/or impractical, or there is a better alternative to consider, the government does not possess the acumen to determine that. Case in point the kerfuffle that is now emerging over the new lending criteria for banks and suchlike, which has completely side blinded the minister, and now he’s trying to find out “what was intended.”
In the US, there is an emerging high-stakes struggle between high-tech telecom companies and the airline industry. It seems that older and especially wide-body passenger jets, of which there are thousands still in service, are at safety risk from the rollout of the US's new 5G services interfering with airplane electronics.
Another 5G glitch:
Anti-competitive practices against Chinese firms hurt Western consumers, taxpayers
Former UK Business and Industry Minister Vince Cable, who served for five years in his post in the coalition government led by David Cameron, said at an event on January 10 that the UK government's decision to ban Huawei 5G equipment and services was made "because the Americans told us we should do it."
Contrary to what Prime Minister Boris Johnson's government has claimed, citing evidence from the country's National Cyber Security Centre (NCSC), Cable said the decision "had nothing to do with national security."
Furthermore, the former minister said, "If Britain had kept with 5G, we would now be at the forefront of countries using the most advanced technologies. And we're not."
After manipulating and lying...or may be believed but was wrong as normally are....look the type of question governor of reserve bank is facing....he may not feel insulted being thick skin but is an insult to the institution :
Who says experts or economists though have wisdom but are not without personal biased ego / agenda so err most of the time.
The Bank of Japan raised its inflation forecasts but said it was in no rush to change its ultra-loose monetary policy, as rising prices fan speculation it may soon signal a shift in its decade-old stimulus experiment.
I am not sure Japan are running an experiment any more. They have realised that they can set the interest rate wherever they want forever - regardless of what 'the market' thinks - and that is exactly what they are doing.
They have also realised that higher interest rates in Japan won't reduce the international price of oil, eliminate Covid across the world, or stop shipping companies abusing their market power. Meanwhile in tiny little NZ we wait excitedly for Orr to wiggle his impotent little interest rate lever up or down like it will make any difference to anything but the disposable income of the more exposed mortgagees.
Yes. Isn't it mind numbingly stupid that central banks use one lever (interest rates) to try and control relative currency values, domestic house prices, cost of business borrowing, interest payable by Govt on investment in infrastructure, employment rates etc. We do not have to trade these things off against each other. We could separate bond yields and mortgage rates for example (as we effectively did using state mortgages in the 40s and 50s).
You either completely missed or ignored some important factors here about Japan, which are their housing market has hardly moved, their spending culture and population aging issue after the great recession. Their inflation rate has been extremely low. Sorry to put it this way but the person would be a fool that he thinks New Zealand can follow Japan's footsteps in current situation .
NZ absolutely controlled yield on bonds / interest rates for most of 2020 and early 2021. Australia, US and EU are still doing so (although not for much longer). They all literally copied and implemented the Japanese yield curve control model. If NZ wanted to control bond yields (e.g. maintaining a given spread with US treasuries) they could do that through a combination of strong signaling and open market operations. Controlling yields does not mean holding rates at zero (as Japan are doing) - it means choosing your rate and making it so.
Correct. How do people think raising interest rates will solve problems such as overseas supply chains breaking down and complete lack of staff available for employers in NZ? These are the real contributors to inflation. Rates may go up and then inflation will persist. Then what? It is all stuffed and beyond our control in NZ.
We have supply issues because we have too much demand. Demand based on free money dished out across the globe to cope with the pandemic - with no associated increase in the production of these supplies.
It's like joining a monopoly game with the cash from a second set....and not expecting it to cause prices to rise.
Raise rates, reduce the supply of cash and prices cannot go up - because the people cannot pay, they go without. Simple as that.
Like other people's comments here, it's to hold NZD value. It all comes down to central bank's creditability. RBNZ's mandate is to remain inflation rate below 2% along with a sustainable unemployment rate (couldn't remember exactly number). If inflation goes above 2% and unemployment rate fall into a unsustainable level, they will have to raise OCR until inflation goes below 2% again. Otherwise, they will lose their creditability. This can result in NZD becoming worthless and causing business and individuals to lose confidence in RBNZ's policies.
Simplistic view indeed, too simplistic.
Interest rate rises hit the consumer items for the plebs because they have less access to money, yes. Interest rates rises don't really hit the cashed up folk who keep blowing money regardless, and there is plenty of them in NZ. Next up is businesses that manufacture and export. Raising interest rates does nothing to address the supply chain problems they have. Interest rates rising does nothing to address the lack of workers. Raising interest rates in NZ does nothing to slow demand overseas for our products. The list goes on.
My point is that your statement whilst generally correct is too simplistic and raising interest rates won't be the silver bullet many hope for.
Interest rates rises don't really hit the cashed up folk who keep blowing money regardless, and there is plenty of them in NZ.
I don't agree. Interest rates /OCR rises means term deposit rate will be up too. That will attract those cashed up folks to put their money into savings.
Raising interest rates does nothing to address the supply chain problems they have.
I don't fully agree with you on this too. Raising interest rates might not directly solve supply push inflation. But low interest is not good for competition. When there is less competition, it's much easier for monopolies to put up their price. It helps big companies more than small ones. When certain booming industries gains more investment, certain industries gains less investment which causes less productivity, therefore causing less supply.
Interest rates rising does nothing to address the lack of workers.
I don't agree. Rising interest rates restrains overexpansion in business in a overheated economy scenario. It helps to ease up a tight labour market.
Fair points but IMO they are simplified economics 101 responses that everyone expects. If we learnt anything from the past two years, its that these things rarely go as economists predict. Side note, I doubt interest rates will even rise that much, its all virtue signaling at this stage.
This is a great wrap up of the complete cluster **** being perpetrated by the fed and other central banks
https://wolfstreet.com/2022/01/12/purchasing-power-of-dollar-inflation-…
Food costs (14% of overall CPI) jumped 6.3% year-over-year. The sub-index for “beef and veal” jumped by 18.6%. OK, switch to pork, which jumped by 15.1%. OK, switch to chicken, which jumped by 10.4%. OK, switch to “fresh fish and seafood,” which jumped “only” 10.2%, hahahaha. OK, forget it, switch to lentils….
Haha love that one, but the sad thing is the white house media correspondent came out and said exactly this :( You will own nothing, eat soy sludge and bugs, and be happy!
The banks are doubling down on their attack on the CCCFA! I wonder if they have colluded, and if so is it legal for them to do so (I guess it isn't price fixing). Its very interesting to watch, I guess for them they will take the short term pain of less mortgages for the long term gain of a watered down regulation.
https://www.nzherald.co.nz/business/new-lending-rules-mum-shocked-by-90…
It seems to me that most of the noise about the cccfa seems to be coming from the broker community who aren't necessarily aligned with the banks.
What is interesting from David's article on the credit crunch the other day is that consumer credit has been impacted more then mortgage credit, and given that consumer credit is the lifeblood of a consumer economy this will have much more, and much more immediate effect, as this will curtail consumer spending.
Anecdotally there seems to have been a dramatic slow down in activity in the hospitality industry with operator's reporting that they are at what they would regard as 70% of expected turnover, this seems to be quite a recent turn of events.
Another news story covering a scenario that has little to do with CCCFA...
Banks are never keen to lend to someone that is not going to have income for an unknown period of time...
What do people expect?
As per the article:
A spokeswoman for the bank acknowledged that as a result of the CCCFA it was enforcing tougher criteria for customers taking parental leave for more than 90 days, but said there had been no change in policy.
The bank also said: "But under the new CCCFA rules, a lender must take any likely income changes into account when assessing affordability, she said."
The woman said she believed they could afford the mortgage with or without her income. Maybe she is wrong, in which case she would have to go back to work early, but now she doesn't get that choice because the government is protecting her from herself and making her life worse.
Yes and it takes the focus off eye watering section prices which are completely in control of the government. Nicely played Ardern.
"Labour wants the Government to abolish Auckland's city limits to get people out of cars, caravans, garages and tents.
Labour housing spokesman Phil Twyford said the urban growth boundary had to go because it has fuelled the housing crisis and people would not be forced into bad circumstances if the Government acted.
"The Government should rule out any possibility of an urban growth boundary in Auckland Council's Unitary Plan if it is serious about fixing the housing crisis," Twyford said.
"Over 25 years the urban growth boundary hasn't prevented sprawl, but it has helped drive land and housing costs through the roof. It has contributed to a housing crisis that has allowed speculators to feast off the misery of Generation Rent, and forced thousands of families to live in garages and campgrounds," Twyford said."
https://www.nzherald.co.nz/business/abolish-auckland-city-limits-labour…
Urban sprawl is also incredible costly and we have plenty of land if people are allowed to build on it with greater freedom. The bipartisan moves to liberalise zoning and allow more freedom are a better alternative, and could have been better if not for NIMBY push-back (was sad to see Luxon turn out to be a NIMBY as he could've been a reasonable prospect). It's absurd entitlement that some expect to have control over what others can do on their own land. Anti-freedom.
In terms of global economies, why do we see western commentators continually pushing the story that China's economy is struggling?
Yes their real estate issues are real, billionaire developers got just too greedy, and the country is rather more a socialist capital driven society than many would have us believe.
However, let's be honest, apart from the realisation that the upper level personnel of their Goverment tends to be extremely wealthy, the big difference between them and us here in NZ, is that their Govt at the top is full of intellectuals, all extremely well educated, all holding multiple qualifications, and able to make careful calls on managing their economy and their 1.4 billion population.
We can read elsewhere that they are producing high quality EV's like there was/is no tomorrow....Tesla Shanghai managed to produce 350,000 vehicles for the European market in the past 12 mths, and also sell 150K into China, while BYD produced just on 500K EV's themselves. They are currently commissioning the fastest train on the planet ...between Beijing and Shanghai ( 600Km/hr) ...the list could go on. In spite of the US trying to squash their technology advances and penalise their exports with tariffs on everything from tooth brushes to solar panels, China's exports to the States rose significantly in 2021 even with their factories working with Covid & 2 & 1/2 days of electricity per week a few months ago. How did they do it every one is asking? As one factory manager said to me, they just had to work harder for the days they had a supply of electricity.
China may be struggling with all sorts of problems, but they have an inbuilt motivation to succeed and provide the best for their next generation. We could do well here in NZ to mirror their thinking and end the racial based separatism that our current Govt is driving through our society.
If you're asking why, look at the likes of Michael Reddell who paints it pretty well. China with centralised control has underperformed more liberalised economies starting from the same initial points in time and per capita measures. 500k cars is a nice figure, but figures will be big in a place of a very large population. Percentages haven't been so flash over the lifetime of the CCP (vs. more liberal countries) and the demographic problem is rearing its head (getting old before getting rich etc).
Hi Rick...points taken...but massive production both in infrastructure and in manufacturing in China really have nothing to do with population numbers...the Tesla factory is a classic demonstration of what can be achieved without using slave labour. The reason why Eion went to China was he recognised the can do attitude they have. It was the very reason that America couldn't get their manufacturing requirements fast enough to China rather than persist with home manufacturing a couple of decades ago. I think we have our own demographic issues here in NZ.
Yields are rising, and faster than predicted. This does not bode well at all for the overinflated NZ housing bubble. The RBNZ and Government can do all their worst in the short term to sustain the NZ housing Ponzi just a little longer, but at the end of the day the overall fixed rates environment, currently witnessing the beginning of a global and significant normalization of interest rates, will heavily affect local NZ rates.
Moreover, the flimsy pretense that the current inflationary trends are only temporary cannot be sustained for much longer, and once this happens all central banks will be forced to acknowledge reality, and if they do not that the fixed rates markets will do that on their behalf.
The music has not stopped yet, but it is definitely slowing down. In this game of musical chairs, quite a few participants will get their backside badly, badly burned, that's for sure. The higher prices have gone, the bigger the mess. And, in NZ, prices have gone well beyond any sensical level and are now completely detached from any economy fundamentals.
“ In Victoria they reported 20,180 more new infections yesterday, and little relief. There are now 235,035 active cases in that state - and there were 22 deaths. A "Code Brown" (mass casualty event expected) has been declared in most major Victorian hospitals.”
The situation in Victoria & NSW should be a big warning to NZ.
The media in NZ has not held the government to account for a lack of prepardness to get our hospital capacity up to Australian standards.
Why isn’t the number of spare hospital beds at each hospital published weekly.
Why isn’t the increase in hospital beds published weekly?
Similarly for MIQ capacity.
If the total number of spare beds in hospitals & MIQ are published regularly, as well as the increases in capacity, NZ can judge how effective this government is in preparing for the inevitable onslaught of Omicron over the next 12 months.
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