Our 4pm update is back for 2023 ! 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
There are no home loan rate changes to report. In fact there haven't been any since before Christmas.
TERM DEPOSIT RATE CHANGES
There are no changes to report here today either, but over the holiday break there were some minor shifts. We did catch up an earlier ASB rate change, but that was just up to levels most rivals already had.
IF IT WASN'T FOR WELLINGTON ...
Residential dwelling consents partly bounced back in November after a weak October result, but remain down -0.9% from a year ago, reinforcing previous views of weakening consent figures. But November was boosted by an unusual leap in multi-unit dwellings being consented in Wellington. Without that, the month would have been notably weak like October.
LABOUR MARKET PRESSURE ABATES
The BNZ/Seek Job Ads data wasn't flash for December either. Volumes of these types of ads have dropped about -20% over the past four months. Property-related industries are leading the trends down, and this includes banks and other financial institutions. The weakness is across all regions and all types of work. Applications-per-ad continue to rise noticeably.
EMPLOYMENT LEVELS STAY HIGH
The Stats NZ employment indicators remained quite positive however. But this data was for November. The total number of filled jobs remained at 2.3 mln, up +2.2% from November 2021 or a gain of +5,200 jobs. There was even a gain from October. But jobs filled by workers in their late 20s (25-29) are continuing to decline, down -3.2% from a year ago. This drop was the fifth consecutive month of declines of more than -3% in this cohort. In contrast, there was a +16% increase in jobs filled by workers aged 15-19, and a +5.7% rise in jobs filled by the over-65 cohort. The toughest jobs to fill are rural jobs.
EXPERIENCE BUSINESS/ECONOMICS JOURNALIST REQUIRED
Speaking of jobs, we have a vacancy for an experience economics/business journalist to fill a role in the Press Gallery in Wellington. If you think you have what it takes, we would love to hear from you.
NO RELIEF YET
Infometrics reports that cost increases from grocery suppliers to supermarkets increased +10.6% in December. That is up from +10.2% in November. “Local cost pressures and supply challenges, including labour market pressure, interest rates, stubbornly high inflation, and weather, look set to maintain supplier cost pressure into 2023,” they say. However they also observe, “... there is better news on the international front, with shipping costs easing back substantially, global food prices starting to ease, and fuel prices also being tempered.”
RISING HALF AS FAST
QV is reporting that the cost increases of building a new house are "easing off". You may recall that QV's May 2022 analysis showed these costs rising at a rate of +21% pa. Now their December updated data shows this has slowed to +11.3% pa. These are still heady rises, led by drainage up 9.2%, the cost of fire proofing increased by an average of 8.9%, with plasterboard linings up +8.6%, carpentry up +8.4%, and hardware up +7.8%, all since May 2022. The disconnect from falling house prices is stark.
WISE, INSIGHTFUL, HUMOROUS, CHALLENGING, REVEALING
Some eagle-eyed readers may have noticed that we now are running some interesting quotes from interesting people at the foot of each page. They appear randomly from our "quote library" so you should see a different one on each page you visit. Feel free to suggest additions to our list. We have started with an initial list of a bit more than 100, but want to get the library up to about 1000, so reader suggestions are most welcome. Suggest in the Comment box below, or if you are not Registered, email me directly.
ETHICAL TRAPS
All main banks are required by law to "know-your-customer", while at the same time have signed up to ESG principles, and promote ethical dealing. But they are finding themselves in an interest position when they find environmental vandals (coal miners), sex workers, and even "human slavery" companies (as the courts ruled with Gloriavale). Crypto businesses are sometimes conduits for illegal transactions. No bank wants to bank such clients. Those who have them as legacy clients try to debank them, but now the courts are intervening, wanting to rule on the 'fairness' of the issue. Will the Courts force banks to have them as clients? Can a government force a private company to do business with the sin-sector? Where will that end?
TREAT YOURSELF
For 2023, give yourself a years use of the content on interest.co.nz ad-free. Supporting us at $10/month (or $100 per year) is all that is required to avoid the ads on our service. You can do it here.
A SIGN OF INFATION EASING IN AUSTRALIA
In Australia, the Melbourne Institute’s Monthly Inflation Gauge showed prices eased to a four-month low of +0.2% in December from November, slowing sharply from a +1.0% rise in the previous month while marking the fourth straight month of increase. On a year-on-year basis, this measure is still recording a +7.3% rate, but the lower month-on-month result should give the RBA some comfort.
PRICE PRESSURE STILL STRONG IN JAPAN
But in Japan, the inflation pressure is still building. Their producer prices surged +10.2% year-on-year in December, exceeding market expectations for a +9.5% rise as high global commodity prices and a historically weak yen continued to inflate costs for imported raw materials. December’s producer inflation also accelerated from an upwardly revised +9.7% price growth in November to the highest in three months. The November to December rate was at an annualised pace of +6.0%, so that suggests a possible easing is at hand.
A DEVALUING ASSET
In China, new home prices in their 70 major cities dropped by -1.5% year-on-year in December according to official data, after a -1.6% drop in the previous month which was the steepest pace since August 2015. All this comes amid a property downturn due to a mounting debt problems among developers as well as the impact of a surge in pandemic cases. 55 of the 70 large cities monitored posted month-on-month declines, and those that didn't recorded just tiny rises in this official survey. There are reasons to believe the actual retreats in home resales are much larger; 63 of these 70 cities reported decreases in December.
SWAP RATES DRIFT UP
Wholesale swap rates were likely marginally firmer today. The real action comes near the close however. Our chart will record the final positions. The 90 day bank bill rate is up +3 bps at 4.82%. The Australian 10 year bond yield is now at 3.61% and unchanged from this morning's open. The China 10 year bond rate is at 2.95% and up +1 bp. The NZ Government 10 year bond rate is now at 4.13% and up +4 bps, and well above the earlier RBNZ fix for the NZGB 10 year which was up +7 bps to 4.09%. The UST 10 year is holding at 3.50%.
EQUITIES FIRMISH
The week has started with the NZX50 +0.7% in late trade. The ASX200 is up +0.8% in early afternoon trade. Tokyo has opened down -1.1% however. Hong Kong is up +0.6% and Shanghai is up +0.8% at its open. Wall Street will be on holiday tomorrow, but the S&P500 futures are indicating a +0.5% rise is in store when they do open.
GOLD SOFTISH
In early Asian trade, gold is just on US$1919/oz and down -US$2 from this morning.
NZD LITTLE-CHANGED
The Kiwi dollar is a little firmer from where we opened today at 64 USc. Against the AUD we are still at 91.6 AUc. Against the euro we at 59 euro cents. That all means our TWI-5 is now at 70.8 and marginally softer than this morning.
BITCOIN FIRMER
The bitcoin price is up +1.1% from where we opened this morning at US$21,101. Volatility over the past 24 hours has been modest at +/- 1.5%.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
33 Comments
Depends on where you go in the USA (greatest country in the world). Oklahoma, no council, no rules, Wyoming, builder knows best. Colorado, hell looks like you know what ya doing. NZ, recent college grad, employed by government telling me how to build. Guess what, we have earthquake's everywhere in the world, not just California.
Perhaps it's that the new bivalent booster vaccine is very effective:
https://erictopol.substack.com/p/the-bivalent-vaccine-booster-outperfor…
When will we get it here?
I enquired about a week ago."I understand you have questions regarding when the Omicron adapted vaccination will be available in New Zealand. Medsafe has granted provisional approval of the BA.4/5 bivalent version of the Pfizer Comirnaty Covid vaccine. However, provisional approval does not mean that a decision has been made to use this as part of the COVID-19 vaccination programme. MedSafe approval is only the first step in the process. The COVID-19 Vaccine Technical Advisory Group (CV-TAG) will now provide advice to the Ministry of Health to inform a decision on whether to use the vaccines in New Zealand. CV-TAG's recommendations will first be considered by the Director-General of Health before a final decision to use is made by ministers.
If approval is granted, bivalent vaccines are expected to be available in the first half of 2023.
You actually want the one that causes a stroke? Turns out that clinical testing on 8 mice really isn't enough for proving safety in humans. Whodathunkit?
https://www.fda.gov/vaccines-blood-biologics/safety-availability-biolog…
Capitalism without bankruptcy is like Christianity without hell.
This today
A SIGN OF INFATION EASING IN AUSTRALIA
In Australia, the Melbourne Institute’s Monthly Inflation Gauge showed prices eased to a four-month low of +0.2% in December from November, slowing sharply from a +1.0% rise in the previous month. On a year-on-year basis, this measure is still recording a +7.3% rate, but the lower month-on-month result should give the RBA some comfort.
This just 5 days ago. Quick turnaround 👍
In Australia... their November 2022 rate was released today and it came in at 7.3%, but the month-on-month rate zoomed up to a worrying +10.8% surge and far more than expected.
Might be too long, but anyway:
Beautiful credit! The foundation of modern society. Who shall say that this is not the golden age of mutual trust, of unlimited reliance upon human promises? That is a peculiar condition of society which enables a whole nation to instantly recognize point and meaning in the familiar newspaper anecdote, which puts into the mouth of a distinguished speculator in lands and mines this remark: 'I wasn't worth a cent two years ago, and now I owe two millions of dollars.'
- Mark Twain, The Guilded Age (1873)
But jobs filled by workers in their late 20s (25-29) are continuing to decline, down -3.2% from a year ago.
Worth looking at the underlying demographics there David - the changes in filled jobs by age is mainly due to the changing age profile of the population. For example, the 25-29 population has fallen about 4% in the last year - more than explaining the reduction in filled jobs.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.