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
No changes today.
TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.
CHUNKY RETREAT I
Manufacturing sales in Q3-2023 fell a whopping -$2.5 bln from the same quarter a year ago (and before accounting for inflation) and that is the largest fall ever recorded apart from the pandemic and the GFC. Those sales were down -7.6%, and along with it manufacturers have started reducing inventories (both raw materials and finished goods) in an indication that actually don't think things will improve any time soon.
CHUNKY RETREAT II
The same data set released shows that retail sales were flat in dollar terms, and again before accounting for inflation. They are lower in volume terms, just not as hard hit as their less vocal colleagues in the factory sector.
WHERE & WHY ITS SLOW
Meanwhile, Westpac has been analysing their customer's credit and debit card activity to glean insights into the drivers of retail activity. They found spending growth has continued to slow in recent months in the face of ongoing financial headwinds, with households increasingly focused on value for money (rather than 'nice to haves'). Separately, Worldline is finding "mixed" retail in the holiday season buildup.
HOLIDAY SEASON RISK FOR RETAILERS
The RBNZ is reminding retailers to train new cash handling staff on the fast and easy ways to spot fake banknotes. The say we generally don't have a huge counterfeiting problem, and the fake banknotes caught are low quality and easily detected using the look-feel-tilt method. But sometimes scammers take advantage of busy holiday seasons and inexperienced staff to try it on.
STRONG JOBS GROWTH
Stats NZ analysis of filled jobs shows them up more than +3.0% in the year to September, now totalling 2.276 mln (+67,000 for that year). Total earnings were up +9.0% (which of course includes those new 67,000 who weren't in the data a year ago). The fastest growing regions recently (proportionately) were Auckland and the Bay of Plenty. The sectors where job growth was fastest were "healthcare and social assistance", "administration and public safety", and "arts & recreation" (and at the risk of being rude, all public sector areas that have been complaining the most).
UPGRADED, (NOT OF THE GOOD KIND)
The FMA has upgraded its Stop Order against David McEwen, making it a permanent one. They claim it is because of "false", "misleading", "material misdescription" and "material error" were involved. This order not only relates to him, but also Stockfox Limited, Cosmopolitan Holdings Limited, Strategy Services Limited, Fund Administration Services Limited, Digitech 1 Limited, M and A Holdings 1 Limited, M and A Holdings 2 Limited, Agtech 1 Limited, Agtech 2 Limited, Agtech 3 Limited, Startight Holdings Limited, Innovative Capital Limited, and McEwen’s Limited Partnership.
FOUR MORE SOLAR FARMS ...
Singaporean company OC Oscar has been granted OIC approval to buy 185 hectares of land to construct 4 solar farms at various site in the North Island. When operational (in 2025), that will add 221 GWh of renewable electricity per year to the national grid.
... AND TWELVE MORE FORESTRY CONVERSIONS
The same public notice for October shows that twelve more foreign companies were granted approval to buy farms for forestry.
SWAPS FIRM
Wholesale swap rates are probably firmer today. However, the key reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is down -1 bp at 5.63% and now +13 bps above the OCR. The Australian 10 year bond yield is up +7 bps 4.33%. The China 10 year bond rate is little-changed at 2.70%. And the NZ Government 10 year bond rate is up +5 bps at 4.98%, while the earlier RBNZ fixing was at 4.87% which was up +3 bps today. The UST 10 year yield is now at 4.17% and up +4 bps from yesterday. The UST 2yr is now at 4.61% so that key curve inversion is marginally higher at -44 bps.
EQUITIES QUITE MIXED
The NZX50 is heading for a -0.4% retreat in late trade today but if that holds it will be up +0.7% for the week. But the ASX200 is unchanged so far today in afternoon trade and if that holds it will be up +1.5% for the week. Tokyo has opened down -1.6% in a continuing back-peddling and on the way to a -3.0% weekly fall. Hong Kong has also opened unchanged heading for a -3.4% drop for the week so far. Shanghai is continuing the same theme, unchanged at today's open but on the way to a weekly -2.2% drop. Singapore is up +1.0% at its start and might end the week in positive territory. The S&P500 ended up +0.8% in Thursday trade in New York which makes it level-pegging with where it finished last week.
OIL HOLDS LOWER
The crude oil price is essentially unchanged from yesterday, now at US$70/bbl in the US, and the Brent benchmark is at US$75/bbl.
GOLD LITTLE-CHANGED
In early Asian trade, gold is now at US$2030/oz and up +US$2 from this time yesterday. Earlier in New York it closed at US$2028/oz. And earlier still it closed in London at US$2027/oz.
NZD RETREATS
The Kiwi dollar is almost -¾c lower that this time yesterday, now at 60.7 USc. Against the Aussie we have fallen -40 bps to 93.4 AUc. Against the euro we are up +20 bps at 57.2 euro cents. That means the TWI-5 is down to 70.2.
BITCOIN BREATHER EXTENDS
The bitcoin price has moved down to US$43,402 and a retreat of -1.2% from where this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.4%.
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43 Comments
Will stick my head out and say CHUNKY RETREAT I and CHUNKY RETREAT II are indicators that all is not well with the wealth effect.
The fact that "retail sales were flat in dollar terms" is a bad, bad sign. Anyone who was worked with Nielsen retail audit data and understands value and volume growth should understand.
Man I knew I should have bought Bitcoin at $16k! I think its a crock of shit, but it looked like a good gamble regardless.
Its like a continuous cycle of the greater fool, there will be people buying now thinking it can only keep going up, they will probably lose their money (maybe there is a bit to go before then). Then the sensible ones buy at the bottom and wait for it to happen again. One day all the fools will be gone and the "sensible ones" will also lose their money.
Man I knew I should have bought Bitcoin at $16k! I think its a crock of shit, but it looked like a good gamble regardless.
Such thinking shows you're not mentally prepared for this asset class.
1. Even the BTC OGs suffer from regret. It can be worse when you were buying in under $4K and understanding how better positioned you would be had you filled your bags at those price points. But if you cannot deal with it mentally and emotionally, you should not really own BTC. Remember, you really have to be in a minimum of 5 years to make it worth your while. It's not a night or afternoon at the pokies.
2. No point buying something if you don't have any understanding of its fundamental value.
Looks good. Hearing good reports about scammer Richard Heart documentary. Guy is outrageous.
Japanese investors are gobbling up international real estate according to Bloomie. But not busloads of Japanese individuals with suitcases of cash willing to pay a king's ransom for suburban homes in the English speaking nations.
Japan-sourced capital has accounted for $7.4 billion of global commercial real estate transactions so far in 2023, more than three times the annual average in the past 15 years, according to MSCI Real Assets. Spending on that scale from Japan has rarely been seen since the late 1980s, when the nation’s asset bubble fueled purchases of iconic places like Rockefeller Center and Pebble Beach Golf Links.
https://www.bloomberg.com/news/articles/2023-12-05/new-york-tower-londo…
The sectors where job growth was fastest were "healthcare and social assistance", "administration and public safety", and "arts & recreation" (and at the risk of being rude, all public sector areas that have been complaining the most).
Can you think why public administration and safety jobs might have had a temporary jump up in October? Was there something big on that required tens of thousands of staff for a few weeks perhaps?
Healthcare job growth was in private aged care facilities in the main - as they filled vacancies with thousands of new migrants.
Arts and Recreation includes mostly private sector work too (e.g. film production, gambling, horse racing, recreation activities etc). But, hey ho.
The crude oil price is essentially unchanged from yesterday, now at US$70/bbl in the US, and the Brent benchmark is at US$75/bbl.
That's probably a good sign for inflation moderation as ultimately the cost of energy sets the price of most consumables.
However I remain unconvinced that CPI will hit the bottom of RBNZs policy band and a rate cut any time soon. Running at or close to the bottom of the target band for several years may be seen as desirable anyway to allow wages to catch up with inflation, abscent a change in the economic environment (I mean it's hypothetically possible government might go on a huge ramp up in infrastructure development.)
I mentioned the other day about a 'socio-economic disaster' in Aussie and said that only those on the fringes like Maccy B were highlighting this. Incidentally they posted this.
Just like Trudeau, Anthony Albanese is engineering the worst housing shortage in history by ramping population (immigration) demand to unprecedented highs.
The Trudeau and Albanese governments are supposed to be “centre-left”.
So, why do they hate the working classes so much that they deprive them of shelter and force them onto the streets?
https://www.macrobusiness.com.au/2023/12/broken-canada-a-harbinger-for-…
This one is easy. The left know that poorer classes generally vote left. The more poor they can import the more votes they can lock in. Likewise by wrecking and sabotaging the economy to drag otherwise ok people down into poverty the better.
That premise sounds reasonable from how I see the left of center. However, it's also a strategy used by right of center (who arguably don't give a rats about poor voters).
Basically, I see it that immigration is the greatest short-term outcomes for the least effort. People like Bernard Salt in Aussie have long pumped the idea of strong immigration as the ruling elite see it as an easy way to pump house prices (and their revenues) and GDP. They will talk about how migrants stimulate innovation, entrepreneurship and productivity. And that is true to some extent. But typically immigration policy is more about preserving the positions higher up the socio-economic ladder.
I think crediting govts with an agenda is giving them too much credit. They are just bumbling along trying to avoid bad sounding stats. They think when business calls for more/cheaper labour they better give them a whole pile for the sake of the 'economy'. I really don't think their brains can handle any more variables.
Sounds about right. I don’t think there’s a conspiracy to pump immigration to inflate house prices. Instead I believe (admittedly I have no evidence whatsoever) that high immigration levels arise from the business lobby/demand. It’s just a neat coincidence for those who own all the assets because it pumps demand.
It’s not going to end well though when the overshoot becomes apparent and unemployment starts rising in the face of thousands of mortgages that need to be re-fixed to higher rates.
It’s been a poor year for Australasian stocks, which I called at the end of last year. I am not sure on ‘24 at this stage, I feel that a rebound might be in 2025. Bank of America thinks they will boom in ‘24. Thoughts?
https://www.macrobusiness.com.au/2023/12/stocks-to-boom-or-bust-in-2024/
Another country backtracks on ending tobacco smoking
https://www.channelnewsasia.com/commentary/malaysia-smoking-vaping-ban-…
NZ leading the world again ;)
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