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
No changes to report.
TERM DEPOSIT RATE CHANGES
Credit Union Auckland raised term deposit rates today.
RETAIL WEAKER THAN EXPECTED
Retail card spending dipped -2.5% in December from November in a sign of a spending slowdown. Stats NZ noted this was the first retreat for nine months and was a 'large' fall for a December month. In nominal terms, retail sales rose +4.8% in December from a year ago. It is likely that inflation was higher than that for the 2022 year (we get that data on Wednesday January 25), so that means retailing is shrinking in 'real' terms.
FEW HOUSE BUYERS AROUND
The REINZ says December's sales plummeted nationally to the lowest in years at 4,336; national median price slipped over -12% for the year. In Auckland the fall was -18%. In Wellington -20%. House prices now down around -15% from November 2021 peak.
MORE IMMIGRATION
Another Brit* is coming to regulate Kiwi businesses. The FMA has appointed Stuart Johnson to the newly created role of Chief Economist. He is said to be "an economist and behavioural science expert within the financial services industry spanning banking, insurance and government regulation". He joins the FMA from London, England, where he has been Head of Behavioural Economics, Conduct Risk and Customer Experience, at a British car, house and life insurance company, and before that at HSBC. He has as an MSc from the LSE and prior to that, the University of Melbourne. (*or Aussie?)
FLAT TODAY, HIGHER TOMORROW?
Dairy prices were little-changed in USD today at the latest dairy auction. However, some analysts are optimistic about the near-term future. Westpac says the current price weakness will not last. "In fact, we expect that the abrupt end to China’s Covid Zero policy will lead to a swift rebound in dairy demand and lead global dairy prices higher over coming months."
END OF THE BOOM
In Australia, the number of houses(dwellings) under construction reached a record high in December, but that is just as the number of consents and starts for new dwellings fell very sharply.
EYES ON TOKYO
Markets are keeping a close eye on the Bank of Japan which is expected to release details of the meetings just wrapping up now, at 4pm NZT. We will update this item as soon as details come to hand. Update: The Bank of Japan kept its ultra-easy monetary policy unchanged, despite the bond market fallout from a surprise policy shift last month. After the two-day meeting, the BOJ's nine-member board maintained its yield curve control policy, keeping its target band for 10-year Japanese government bonds at between plus and minus 0.5%.
SWAP RATES FIRM
Wholesale swap rates were likely a little firmer today. The real action comes near the close however. Our chart will record the final positions. The 90 day bank bill rate dipped -1 bp today to 4.81%. Actually, that is only the third dip (each of -1 bp) since early November, during which time it has risen +71 bps. The Australian 10 year bond yield is now at 3.66% and back up +6 bps from this time yesterday. The China 10 year bond rate is at 2.94% and down -3 bps. The NZ Government 10 year bond rate is now at 4.17% and up +7 bps, and still well above the earlier RBNZ fix for the NZGB 10 year which was up +5 bps to 4.12%. The UST 10 year is up another +3 bps at 3.56%.
EQUITIES MEANDER
The S&P500 ended its Tuesday session on Wall Street down a minor -0.2%, post long holiday weekend. Tokyo has opened up +0.6% on top of yesterdays big gain. Hong Kong has opened its Wednesday session down -0.2%. Shanghai is up +0.2%. The ASX200 is little-changed in afternoon trade after a slip yesterday. The NZX50 is up a minor +0.2% in late trade after a good rise yesterday.
GOLD SLIPS
In early Asian trade, gold is just on US$1908/oz and down -US$10 from this time yesterday.
NZD FIRM
The Kiwi dollar is up almost +½c from this time yesterday, now at 64.4 USc. Against the AUD we are +¼c firmer at 92.1 AUc. Against the euro we are up +½c at 59.6 euro cents. That all means our TWI-5 is now at 71.4 and +40 bps firmer than yesterday. These moves seem at odds with the current grim economic outlook however.
BITCOIN HOLDS
The bitcoin price is up marginally from this time yesterday at US$21,232 (+0.4%). Volatility over the past 24 hours has been modest at +/- 1.4%.
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 ».
18 Comments
Sigh of relief for many on BoJ stance. Fascinating watching ol' ratty on Japan exchange Bitbank. Spiked massively just before the announcement. Just as well the Japanese exchanges are more or less spot exchanges so the degenerates cannot gamble like there's no tomorrow.
NZDJPY up +2.5%. Zespri shedding a little tear.
Dairy prices were little-changed in USD today at the latest dairy auction. However, some analysts are optimistic about the near-term future. Westpac says the current price weakness will not last. "In fact, we expect that the abrupt end to China’s Covid Zero policy will lead to a swift rebound in dairy demand and lead global dairy prices higher over coming months."
Why are so many people convinced lockdowns were China's big econ problem? They aren't, or weren't. And because the issues go much, MUCH deeper in China, reopening isn't going to do much - just like last time a few months ago. https://youtube.com/watch?v=Un80WbcaqYY Link
China became old before it became wealthy: https://www.bbc.com/news/world-asia-china-64300190
That said the pattern is being repeated across the world. Even India now has a fertility rate of less than two, well under the replacement rate.
Implications for New Zealand? China and India had been among our preferred sources of workers. We won't be able to lean on immigration forever.
https://www.nzherald.co.nz/nz/embattled-homeowners-get-creative-as-mont…
2k a month more needs to be found.....
Yes there is that but in Gisborne embattled is something else again. If you cannot sit safely in your own home over dinner then it is more than dire. Instead some layabout crashes their car through your house and puts you in hospital fighting for your life. And I bet said layabout says I didn’t mean to, they made me do it, it’s not my fault and anyway I’m not injured so what does it matter. New Zealand’s society nowadays would make the wild west look like a Disney cartoon.
I think we will become a lot more market gardeners. Well the productive people will anyway. Like you might have a job but every dollar is valuable. You can grow a lot of food on the average sections land and even in pots on your balcony. Why would you need to buy anything then? That's what I'm planning anyway.
The weird incompetence of this government never ceases to amaze:
https://www.nzherald.co.nz/nz/government-buys-same-rotorua-land-it-reje…
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.