Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
We are still waiting for BNZ to change either fixed or floating rates after most of their rivals moved last week. Para Loan adjusted their rates today. Updates: BNZ has raised its floating rate, but only by +45 bps to 7.74%, which makes it the lowest of any main bank (lower now than Kiwibank). Separately, the Co-operative Bank has raised fixed rates.
TERM DEPOSIT RATE CHANGES
First Credit Union raised some rates today.
PERSONAL LOAN RATE CHANGES
Unity Money have increased their secured personal loan rates by another +1.0% and their unsecured personal loan rates by another +1% today. Recall, they last raised these rates on Tuesday, November 22, 2022.
A 12 YEAR LOW
Barfoot & Thompson reported that their November sales volumes were down -41% compared with the same month a year ago. This is a 12 year low for a November month. Their listing inventory is at an 11 year high. Prices for dwellings that do sell have been stable over the past few months.
COMMODITY PRICES SAG
Commodity prices fell in November with a big sag. In world price terms they were down -11.5% year-on-year. But in NZD terms the change is actually very small. But the recent rise in the NZD in December won't be helpful going forward of those world prices stay lower.
THE SHIFT TO NEVs WELL PAST THE TRIGGER POINT
New car sales came in unchanged in November from the same month a year ago, but that remains a high level at 11,175 and matching the year's best month (March). 76% of these are SUV's but with the rise of the Tesla Model 3 (a sedan), that is keeping the SUV category from pushing higher. But used imports are really struggling to match past glories. The shift to hybrids and EVs isn't helping this class of import. These used imports registered just 7,149 cars, the lowest since May and a rather large -37% retreat from year-ago levels.
BUSINESSES PULL BACK
Commercial vehicles sales fell yet again, and are now running at less than a 50,000 annual rate, its slowest level in 2017 (if you ignore the pandemic period).
CLIPPED BY REGULATION
Westpac joins other banks in changing credit card rewards schemes with a new tiered system, as regulation of revenue banks receive from interchange fees kicks-in
MORE TRADE, LOWER PROFITS
In Australia, they reported that company profits fell an unexpected -12% in Q3-2022 from Q2, missing market expectations of a small growth, and following an upwardly revised +7.8% rise in Q2. This was the first decline in company profits since the fourth quarter of 2020, amid falling commodity prices. Inventories rose almost +8%.
DANGERS RISE AS NO GOOD OPTIONS LEFT
In China, more big tier 1 cities are easing pandemic restrictions. There is clearly a revised approach to pandemic control underway there, and it comes as case numbers rise sharply. China missed some good options by dismissing Western vaccines.
SWAP RATES SLIP
Wholesale swap rates were likely lower today on global trends. The real action comes near the close. Our chart will record the final positions. The 90 day bank bill rate is up +2 bps at 4.45%. The Australian 10 year bond yield is now at 3.38% and and up +4 bps from this morning. The China 10 year bond rate is at 2.94% and back up +2 bps. The NZ Government 10 year bond rate is now at 4.00%, and down -3 bps today and similar to the earlier RBNZ fix for the NZGB 10 year which is down -4 bps to 3.99%. The UST 10 year is now at 3.53% and up +4 bps from this morning's open although little-changed from where it ended last week.
EQUITIES MIXED
After last week's good gains, the NZX50 has started this week slightly lower, down -0.3%. The ASX200 is up +0.4% in early afternoon trade. Tokyo has opened little-changed. Hong Kong is still excited about the prospect of eased pandemic restrictions in China and has opened up another +2.3%. Shanghai has opened up +0.8%. Wall Street futures suggest that the S&P500 will open tomorrow down a minor -0.2%.
GOLD FIRM
In early Asian trade, gold is at US$1803/oz and up +US$5 from this morning.
NZD HOLDS
The Kiwi dollar has firmed from this morning's open, now at 64.2 USc. But against the AUD we are down to 94 AUc. Against the euro we are holding at 60.8 euro cents. That all means our TWI-5 is now at 72.3 and little-changed
BITCOIN FIRMS
Bitcoin is now at US$17,202 and up +1.1% from where we were this morning. Volatility over the past 24 hours has been modest at just over +/- 1.0%.
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36 Comments
5.35% TDs today from CCB, new highs.
Kiwibank increased their online saving rate today ...at long last
Yeah KB were slow with that call account rate. TSB raised TD rates today to match most at 5.2%. also very late to move.
Delaying it by the weekend possibly saved them a lot of money, as I am sure many people were preparing to move cash on Monday if nothing happened.
The hospitality industry has bounced back to pre-pandemic levels.
The industry is predicted to need another 30,000 employees to keep up with the pace of growth over the summer period.
So 25% more staff needed just for summer months. Some might say the industry wants to replace higher-paid existing staff with cheaper imports to expand margins from the higher prices entrenched in their menus.
https://www.1news.co.nz/2022/12/05/nz-hospitality-industry-bounces-back…
Interesting. People still flush and ready to spend. That's a good thing.
At least for now, and over summer. There’s almost a ‘mandatory’ element to dining / drinking out over December/January
For 60% of people the punch bowl is still here, although Mr Orr has booked its removal for H1 23.
Barfoot's only sold two properties out of four at auction over the weekend one 33% below CV the other 31% below CV.
Yes I saw those, was toying with the idea of a post claiming auctions are back up a 50% clearance rates. But it’s really not a joking matter. I checked the two sold, one sold for below land value but looked like a suspicious 1990s construction. These prices are bad.
Cafes and restaurants have returned to pre-Covid sales levels, which saw annual sales of $6.6 billion for the year ending September 2022, more than 15% higher than 2019.
Not wanting to be too heavy on the DGM, but that 15% greater spend probably needs to be considred in the light of inflation. So while it's good, it might be a bit of a stretch to suggest that we're 'punching above our weight.'
However, you would think this kind of discretionary spend would be impacted by a negative wealth effect.
I think it’s as per what IT Guy says above, the pain is coming in 2023 with the negative wealth effect.
Also in light of inflation as you say. 15% higher is probably almost nothing in real terms.
Just don't tell Adrian Orr, it gives him more reasons to lift rates.
We are up north. The Coromandel.Beautiful, peaceful as ever . A few retailers closed, but signs saying they are having a break pre the summer season getting really underway. That is good to see.
"Some might say the industry wants to replace higher-paid existing staff with cheaper imports"
If you talk to the restaurateurs, they will simply say they need more staff and they can't get it. Some need to turn patrons down, not because they don't have spare tables, but because they don't have enough chefs, cooks, managers, waiters/resses etc
Advisor. Who are these, "some people"? They certainly don't exist in my home town. I suspect they are a figment of your tortured mind. And where are these higher paid staff who will be replaced by these "imports"? The only reason any hospo staff fear for their jobs in QT is because their business might go broke because of government immigration policies. These mean that businesses can't employ enough staff to make enough money to pay the rent. If that doesn't get paid, the owner's mortgage doesn't get paid, and neither do their rates. And the former taxpayers are now all beneficiaries. Just remember that it is deliberate government policy that is causing these issues.
Deliberate government policy stops me winning lotto and that's an issue for me.
We are still waiting for BNZ to change either fixed or floating rates after most of their rivals moved last week.
Or an advertising campaign from BNZ stating how much cheaper they are that the competition? That would stir things up!
Westpac joins other banks in changing credit card rewards schemes with a new tiered system
To be more clear, Westpac are reducing their reward scheme, more specifically from 1st Feb 2023, it's reducing its rewards from 2 points for every $ spent, to 1.5 points up to $7'000/month and only 1 point per $ spent above $7'000/month.
Royal Commission of Enquiry just been announced into NZ's COVID-19 response. It'll either be a bombshell or a complete fizzer once it's released in 2024, I'm not quite sure which.
There were quite a few missteps with PPE and vaccine rollout, I hope they get looked at.
They will also be looking at the economic response.
Those soil moisture levels for our North Island dairy areas looking good for production, grass and supplement growth.
Should be good going forward but boy it's been bloody wet and hard going up till now. Personally we're on a par with last season which was great but no supplements made and district average is about -9%.
Different country,,but similar ...
https://www.nzherald.co.nz/business/christopher-niesche-rate-hikes-fail… excerpts:
The combination of more people wanting to travel on fewer flights can only have one consequence. It’s not uncommon to hear stories of travellers paying A$1500 or more for a Sydney to Melbourne return flight.
It’s not just airfares that Australians are spending up on.
...Try getting a booking in a Sydney restaurant. Even on an unpopular night like Tuesday, tables are full. You’ll be lucky if they can fit you in at 6pm if you promise to be out the door by 8pm so they can book the table for a second service.
The Reserve Bank of Australia might be trying to slow consumer spending with rising interest rates, but it seems a lot of Australians aren’t getting the message.
Billionaire Gerry Harvey recently said Australia was nowhere near a recession with the unemployment rate still very low, and it was tough finding shop floor assistants.
The Aussies are also getting record prices for their coal exports. That helps. If only we had some open coal mines.
Our exports of coal would be chump change,it isn't called the lucky country for nothing.
AUD and NZD continue to charge against USD, while USD and JPY cross relatively flat. DXY still heading south. Not sure what to make of it. I thought the carry trade was toast.
Reserve Bank 'at risk of going too far', Kiwibank economist says
Jarrod Kerr can often come across as one of the more enlightened commentators, but this is a disappointing view from him. Perhaps his lateral thinking has deserted him
He might want to consider that the RBNZ has a once-in-a-generation opportunity to recalibrate our economy and 'Inflation Fighting' by raising the OCR so aggressively is a welcome, but not primary, by-product of that.
If the RBNZ 'overdoes it' and the economy changes, it will all have been worth it.
I don't understand (well actually I do) but why weren't these economists coming out in 2020-2021 and saying 'hey were pushing interest rates too low for too long and it risks overheating the economy and will cause chaos if the central banks lose control of inflation'.
As salespeople of debt, of course they want interest rates to drop so they can extend more debt to their customer base - but surely, you've got to do this with a prudent mindset and thinking 'what could possibly go wrong with this ultra-loose monetary policy'. Because we are now seeing that exact case play out....and one that had, if you were looking at the situaiton in 2020-2021 with possibilities and probabilities, a reasonably high probability of occurring.
As salespeople of debt, of course they want interest rates to drop so they can extend more debt to their customer base
Bit of a problem here IO. The existing credit mechanism through the commercial banks is more or less only designed for the property Ponzi, not for the productive sector. It's not going to fundamentally change anything.
Much much more of that to come.
It will be interesting next year as banks are approving more interest only on people’s mortgages to relieve some pressure. We might see some special mortgage rates on offer too after the new years as banks are trying win some quality business.
Stop contributing to local inflation, take the money and spend it overseas.
New poll shows National and ACT in comfortable position to form government, economic confidence drops
https://i.stuff.co.nz/national/politics/130665610/new-poll-shows-nation…
the polling took place up to 30th Nov before the 5 Waters entrenchment attempt & obfuscation, Jackson’s train wreck interview with Jack Tame and Ardern’s evasive interview today with Ryan Bridge.
There is hope. Quite what 33% see in Labour is beyond me? Same types that play Lotto?
I guess that despite all the challenges facing the country which would normally have decimated a sitting governments support, 33% look across at the alternatives that National or Act are offering and think, well this lot aren't great but voting that lot in would be just bonkers.
We'll see more of National's approach play out through this year, criticise but offer no solutions to big issues. Throw up distractionary policies that appeals to older generation like bootcamps for kids. National could be putting forward a really strong policy response to the issues we're facing but instead they will try to get in by not being Labour.
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