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/LOAN RATE CHANGES
Kiwibank raised its 6 month and 1 year year fixed rates by +14 bps and +10 bps respectively, basically moving up to the same levels of the big Aussie banks for these terms. Kiwibank's 7.05% two year rate remains unchanged, although this was already at the Aussie reference levels. This might also be helpful. The Cooperative bank raised similar rates by +5 bps.
TERM DEPOSIT/SAVINGS RATE CHANGES
Squirrel reduced its investment rate for 5-7yr personal loans by -25 bps to 7.75%.
BIG SURGE IN WAREHOUSE BOX CONSTRUCTION COMING
Almost 200,000m2 of new warehouse space worth more than $¼ bln consented in Auckland in the September quarter. This is the first time the value of building work on warehouse/storage buildings in Auckland has topped $200 mln in any quarter. The reason might lie in the next item. We have detailed commercial consent data for all regions analysed and curated here.
RETAIL TURBULENCE
Research by NZ Post reveals that online retailers are are getting a sharp increase in activity, without necessarily seeing the accompanying rise in revenue. This is because there were 2.3 million more online transactions in Q3 2023 than there were in Q3 2022. This is a massive +20% increase and back to the transaction levels we saw at the height of the pandemic in 2021 when parts of the country were in lockdown. The quarter’s online transactions are +51% higher than pre-pandemic Q3 2019 levels. (Instore transaction levels for the quarter were up 6% on Q3 2022.) But the same research shows the value of online transaction over the same period rose just +6% - when CPI inflation was +5.6%. At the retail level, buyers are trading down or deflation is returning - of both.
'KEEP UP THE PACE'
IAG says it has paid out more than $1 bln in insurance claims for the North Island floods & Cyclone Gabrielle and says it wants the incoming government to prioritise the present natural hazard risk reduction, climate change adaptation and managed retreat work.
AND ONE LESS OPTION FOR FARMERS
And Tower said it is quitting its rural exposures. They will no longer offer insurance for commercial farms as they focus direct personal and small business. Tower will continue to insure lifestyle blocks under this strategy. Commercial rural clients will have the opportunity to work with Aon New Zealand’s AonAgri division going forward, they said.
PBoC STUCK
In China, their central bank kept its key lending benchmarks unchanged in their November review - despite the obvious need for stimulus. It won't come from lower lending rates because this would expand downward pressure on the yuan and risk increasing capital and portfolio outflows. Those outflows hit -US$100 bln in both September and October. However as long as the interest rate spread to the USD remains heavily against the Chinese yuan, these outflows will likely persist. All they can do at the moment is not make matters worse which is why the one-year and five-year loan prime rates were held steady at 3.45% and 4.20%, respectively.
HARD RIGHT TURN, INTO BLIND ALLEY
In Argentina, they have elected right-wing libertarian firebrand Javier Milei as its new president. He won 55:45. He is a hard-line social conservative with ties to the American right, opposes abortion rights and has called climate change a “lie of socialism.” He has promised to slash government spending by closing Argentina’s ministries of culture, education, and diversity, and by eliminating public subsidies. He will also close their central bank and "dollarise" their economy. But their central bank has no US dollars, so the challenge will be huge. This will be new territory: no country of Argentina’s size has previously turned over the reins of its own monetary policy to American decisionmakers. The whole affair smacks of abject desperation. Argentina has had a very long set of awful political leaders - almost all elected by their voters.
SWAPS FIRMISH
Wholesale swap rates have probably firmed a little today. The real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is unchanged at 5.63% and now just +13 bps above the OCR. The Australian 10 year bond yield is up +2 bps from this morning to 4.49%. The China 10 year bond rate is up +1 bp at 2.68%. And the NZ Government 10 year bond rate is up +4 bps at 5.02%, and the earlier RBNZ fixing was at 4.93% which was down -2 bps today. The UST 10 year yield is now at 4.45% and a tiny +1 bp rise from this morning. The UST 2yr is now at 4.89% so that key curve inversion is a little more at -44 bps.
EQUITIES MEANDER IN TIGHT RANGES
The NZX50 was lower in morning trade but has recovered that in afternoon trade and is now little-changed on the day near the close. The ASX200 is also little-changed, up a mere +0.1% in afternoon trade. Tokyo has opened its week up +0.3% and now topped a 33 year high (although it has since slipped back slightly), Hong Kong has opened up +0.8%, and Shanghai has opened marginally lower. Singapore has opened down -0.8% as a bit of an outlier. The S&P500 futures suggest Wall Street will open tomorrow up a very modest +0.2%.
GOLD HOLDS
In early Asian trade, gold is now at US$1983/oz and up +US$2 from this morning and back to Friday's level with very little net change.
NZD FIRMS
The Kiwi dollar is up +20 bps from this morning's open, now at 60.1 USc. Against the Aussie we at 92.1 AUc. Against the euro we are up at 55.1 euro cents. That means the TWI-5 is also up +20 bps at 69.3.
BITCOIN TURNS BACK UP
The bitcoin price has moved back up today, now at US$37,297 and up +2.5% from where we were opened this morning. Volatility over the past 24 hours has been modest at just over +/- 1.5%.
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69 Comments
So Milei got elected in Argentina! Wow a libertarian president ! He has an almost insurmountable task to pull Argentina out its deep malaise, but I wish him the best of luck. The left couldn't do it, can the right ?
Milei is pledging economic shock therapy. His plans include shutting the central bank, ditching the peso, and slashing spending, potentially painful reforms that resonated with voters angry at the economic malaise
Go for it, but will he be able to achieve this without a revolution by the people, despite the majority whom elected him ?
This isn't a left/right can solve it problem. any more than NZ's is. What we are seeing now - encroaching at different rates in different places - is disenfranchised people voting out whoever is in.
That will apparently be repeated, because the default position is ignorance of the real problem(s) and incumbent politicians are the first target in sight for unthinking people.
It bodes not well for democracy...
Peter Turchin has well explained the reasons why we shouldn't trust people who say they know what's good for us:
Elite overproduction - Wikipedia
Are we overproducing elites and instability? - Niskanen Center
KKNZ - NO, HE DOES NOT.
As I pointed out to you on a prior thread.
His message is well worth the read, but it is a LOT more nuanced than your little sound-byte. With many more potential outcomes; indeed he uses the analogy of a valley with reasonably restricting sides, opening out into a delta of possibilities. And he describes many such possible outcomes. And many entirely satisfactory epochs.
You remind me of the rabbit-hole brigades; looking first for self-reinforcement.
And there we see how the breakdown of our major cultural narrative, will be almost irreversible. Too many folk not thinking from first principles, too many hanging on to self-supporting assumptions.
Try this, for a stunning example of what I'm on about. A Mensa-level intellect (unless I miss my guess) who came to what I study, a decade later than me, and who had less spare time to devote to it. She is amazing - but I suspect most won't have the attention-span to do the interview full justice. Our budding PM would do well to bother taking the time: https://www.thegreatsimplification.com/episode/98-helen-thompson
Compare that to the three far-quitteers we've elected.....
What happened to Flopsy and Mopsy and Cottontail?
I've just put in 200 metres of rabbit-fencing. 17 years of nothing - now a plague.
Almost as bad as neoliberalism. Not so much Myxomatosis, as steal the public matosis, flog it off to our mates, then screw rent out of the public foreverosis.
Foxglove, with your penchant for history/geopolitics, you'll love that link I put up, upthread.
In the 1950s I had one of those annual omnibus album thingys. On the inside of the front cover there was a cartoon depicting a large collection of fair dinkum outback farmers constructing an electrified rabbit fence. On the inside of the back cover was the antics of same said farmers, airborne, electrified into impossible postures after one rabbit had pulled on the switch. Hadn’t thought of that laugh, in quite a while.
Surely you joke? One thing right wing cranks find difficult, is giving up power. They bury themselves under layers of corruption, nepotism and a security aparatus that makes getting rid of them an exercise of violent desparation.
Libertarian? A new definition for putting the state in citizens bedrooms.
Libertarians - aren't. They're about liberty but just for themselves - in that an unfettered market is an upwards wealth-pump (as Turchin notes) and they expect to be the winners. The problem for Libertarians is that they piggy-back on economics; somewhat like Bishops do a Creed. And the Creed is wrong; just plain wrong. More exactly, it fitted events until it couldn't. Which is now.
These things happen in blind alley affairs smacking of "abject desteration".
Or he could just be another come from nowhere yet win an election WEF stooge like Macron and Ardern.
"Javier Milei is a 52-year-old economist who previously worked for the World Economic Forum."
Timeline: Macron's rise from unknown adviser to French election favorite
https://www.reuters.com/article/us-france-election-macron-timeline-idUS…
He will also close their central bank and "dollarise" their economy. But thier central bank has no US dollars, so the challenge will be huge.
His arguments against central banking are dramatic but the points he makes should be echoing in the West. Essentially the Cantillon Effect still works for the ruling elite in Argentina but overwhelmingly punishes the poor. Is the West any different?
Unfortunately, and I do agree with your sentiment, the NZ electorate is plainly disenchanted generally, with what’s been on offer. That can be the only explanation for each of the main two parties shedding half of their parliamentary seats, over six years, in the last two elections. There is a fine line between Hobson’s choice and no choice and like it or not, a voter who cannot perceive any positivity is inevitably going to react negatively.
Unlikely that would have made a difference. It probably would have encouraged them more as it would have forced Luxon to backtrack.
These people voted desiring the most disruptive option for the country. Selfish pricks.
And we see so many on the left are so very pleased that the result is a difficult negotiation.
Says a lot about their character. I hope they are suitably disappointed by the result and decide leave NZ for somewhere more suited to them. They are of no use to NZ.
RtD - If you'd done your homework?
I know you haven't, by default; you wouldn't have made that comment.
Google: World3. There are several versions, many updates, peer-reviews. Note where we are now.
Can you point me to ANY Party addressing that? No, neither can I. But if folk leave, that'll make it easier for the rest of us.
Ironically that applied the other way round in 2017 in which the ‘handbrake’ notion was delivered but more exactly, kept the Greens sidelined. Then in 2020, National having stuffed themselves, the electorate chose to oust NZF but jacked up Labours vote in order to still keep the Greens out. Yep NZ certainly can vote for the negatives rather than the positives.
I can see why those NACT patriots might be a little peeved. All those hopes and dreams of turning NZ into a crowded, industrially wasted, overseas branch of Sino Wall St Inc are circling the drain of neoliberal nirvana. I couldn't personally bring myself to vote for Winnie, but I stood conflicted in the booth for 10 minutes. The wife wasn't conflicted though.
Out of all the bad outcomes this election could have thrown, this circus is best one could hope for. Worst government in history coming up. Can't wait for the banter. :-)
"I find that an absolulety disgusting and pathetic attitude. Vote for who you want, not who you don't want !"
Don't be so melodramatic Yvil,people can use their vote however they want.
National /Act have been gaming MMP by letting David Seymour win the Epsom electorate,they would have disappeared if it wasn't for Nat voters keeping them in parliament over the years.
Very true indeed. And justifiably the accompanying smirk that he was a larger contributor than anyone else in facilitating the introduction of MMP A unique character and proven as well beyond simply a political survivor. In my life, over the years, I have encountered personally five NZ prime ministers. But never WP, on reflection likely have missed out on a bit I would think.
I knew one of the organisers quite well; MMP wasn't their favourite format but it was the only one they reckoned they could get over the line (if memory serves).
I met two - but only one with humour. Gets handed a glass of water, told to turn it into wine. Pours it out, says 'no, you walk on it'.
Priceless.
Holy Sh!t saying swaps are up is nonsense - swaps are up 1bp today (Seriously 0.01%) after 50bp down for the last month and people so easily give banks a justification and support. The cost of money is plummeting, PLUMMETING.
These corporations will suck every last dollar from New Zealand and someone on this website will defend them.
This is why we need to tax the super rich and why we should not welcome them to our shores. It's not an envy thing it's that their behaviour is disgusting, they cause more harm than any gangs or dole bludgers.
https://www.theguardian.com/environment/2023/nov/20/twelve-billionaires…
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