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
There are no new rate changes to report. But this review of the home loan sector and what is motivating borrowers might help.
TERM DEPOSIT/SAVINGS RATE CHANGES
NZCU Auckland increased its one year TD rate from 6.15% to a remarkable 6.6% rate. A minimum balance is only $5000 to access this rate.
HIGHER CREDIT CARD RATES
SBS Bank raised its credit card rates for their Visa offering. The new rate is 19.65%, up from 18.5% for purchases. For cash advances, the rate rose to 22.65%, up from 21.50%. And Farmers raised its store card rate to 28.5%, up from 25.5%.
STRONG MAGNET
The number of people in this country on work visas increased by +54% last year after 204,327 overseas workers arrived in 2023. That means that as at the end of December there were 176,619 people in this country on work visas. Another 73,659 arrived on student visas in 2023.
TOUGH TRADING AS VOLUMES DROP
It has been a soggy Christmas for retailers according to the December retail data released as part of the Stats NZ electro\nic card activity monitoring. Retail card spending fell a seasonally-adjusted -2.0% in December - which isn't good when inflation seems to be running about 5% and those retail sales numbers are not inflation-adjusted. (The September CPI was 5.6%. The December CPI data will be released a week today on January 24. And the November "selected price indexes" which covers about 45% of the CPI suggested rises in these monthly-tracked items of about +4% and helped by big falls in diesel and international airfares. The December "selected price index" updates are due out tomorrow.)
NO DEBT STRESS YET
The latest personal bankruptcy data, while slightly elevated, are still only running at ~70 per month. Bankruptcy-lite (No Asset Procedures) haven't moved up at all, still running about 40 per month nationwide. Both these levels are actually very low and do not point to rising debt stress. Further, company liquidations managed by MBIE are actually lower than recently.
FIRMER
Dairy prices rose modestly in the overnight and by a bit more than expected on demand from China, the Middle East and Southeast Asian buyers, giving a good start to the year. Overall prices were up +2.3% across most product categories. Suggestions of lower production in many exporting producers (including New Zealand) is helping underpin prices too.
ANNUAL HPI CHANGES
The average value of dwellings fell by almost -$32,000 last year, with rural centres and smaller towns tending to hold their values better than the main centres. That's according to the CoreLogic House Price Index. The rose the most in the Queenstown Lakes District (up +$96,000) and fell the most in Auckland City's eastern suburbs, down -$145,000. Proportionately, South Wairarapa fell more, down -11.9%.
MORE HOUSING DATA DUE
REINZ says it will release its December activity results tomorrow, Thursday, at about 9am.
AUCTION RESULTS STARTED AGAIN
Although the numbers are still low, residential auction results are starting to flow again, recorded in our unique auction database.
FAR NORTH UP WITH THE MAINSTREAM
Fitch Ratings has assigned the Far North District Council (FNDC) a Long-Term Local-Currency Issuer Default Rating of 'AA' with a Stable Outlook. (For reference, Auckland Council has a 'AA' rating from S&P and a Aa2 from Moody's. The LGFA has a AA+ rating.)
CHINA'S ECONOMY GAINS
There was a big set of important Chinese economic releases today. As foreshadowed in Davos, China recorded a Q4-2023 GDP expansion of 5.2% which was marginally less than the +5.3% expected. The official 2023 target was "around 5.5%" so they undershot slightly. China's industrial production grew by +6.8% year-on-year in December 2023, after a +6.6% gain in the previous month and beating market forecasts of +6.6%. It was the fastest recorded pace of expansion in industrial production since February 2022 and electricity production rose +8.0% which supports the industrial production claim. However their housing development retreat picked up in December. And new house prices fell at their fastest pace since March. Prices for pre-owned units fell faster and everywhere.
CHINA'S POPULATION FALLS
Meanwhile, China's population is declining faster now, as deaths rise above norms. The number of people in the world’s second-largest economy fell for a second year to 1.41 billion in 2023. The Chinese population started shrinking in 2022 for the first time since 1961.
SWAPS HOLD AGAIN
Wholesale swap rates may not be changed much again today. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is unchanged yet again at 5.64%. The Australian 10 year bond yield is up +5 bps at 4.20%. The China 10 year bond rate is unchanged at 2.54%. And the NZ Government 10 year bond rate is up +3 bps at 4.72%, while the earlier RBNZ fixing was at 4.66% and up +6 bps from yesterday. The UST 10 year yield is now at 4.05% and up +5 bps from this time yesterday. The UST 2yr is at 4.22% and up +2 bps, so that inversion is now just -17 bps.
EQUITY WINNERS & LOSERS
The NZX50 is down -0.2% in late trade today. The ASX200 is also down -0.2% in early afternoon trade. Tokyo has opened up a very strong +1.7% embellishing their recent run up. When will it ever end? Hong Kong has opened down -2.2% while Shanghai is down -0.6% at its open. Singapore has opened down -0.7%. Wall Street ended down -0.4% in Tuesday trade on the S&P500.
OIL SOFT
Oil prices are retreating from yesterday at just under US$71.50/bbl in the US while the international Brent price is now at US$77.50/bbl. These levels are a bit less than -US$ lower.
GOLD LOWER
In early Asian trade, gold is now at US$2029/oz and down -US$21 from yesterday. Earlier it ended in London at US$2050/oz.
NZD SOFTER AGAIN
The Kiwi dollar is now at 61.4 USc and down more than -¼c from this time yesterday. Against the Aussie we are little-changed at 93.2 AUc. Against the euro we are unchanged at 56.5 euro cents. That means the TWI-5 is now at 70.2 and down another -20 bps
BITCOIN RISES MODESTLY
The bitcoin price has firmed again today to US$43,090 and up +1.1% from where we were this time yesterday. There's been modest volatility over the past 24 hours of just on +/- 1.8%.
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 ».
42 Comments
https://www.abc.net.au/news/2024-01-17/dp-world-pay-dispute-at-australi…
"How the DP World pay dispute at Australia's ports could see prices rise, reigniting inflation"
A little off topic but the amount of crime seems to still be climbing. This poor family amongst hundreds of other stories. I had a car stolen in Auckland from a secure carpark recently and they just shrugged their shoulders and says it happens every night and that they are told not to intervene. Excuse me???
Where are you Luxon, Peters, Seymour???
https://www.nzherald.co.nz/nz/auckland-man-seriously-injured-trying-to-…
There's no magic fix. It might take a whole generation to undo the entitlement mentality that some people now have, that they can commit crimes unimpeded and unpunished because of their cultural/mental/childhood/poverty/racial issues. Just look at the latest example, Golriz Ghahraman.
It might take a whole generation to undo the entitlement mentality that some people now have, that they can commit crimes unimpeded and unpunished because of their cultural/mental/childhood/poverty/racial issues
TBH, I respect the gangs in this respect. While they will do their utmost to not go to jail, they don't seem to jump straight to the victim card. And they're more than ready to be punished.
When I think of entitlement, I think of people collecting benefits they don't need. Like people collecting superannuation who really don't need it or politicians who rent their own properties to the government for their own use. Taking stuff they are legally able to, but not what is really right.
I doubt many criminals really believe they deserve to commit crime because of their upbringing. Most I expect just don't care if they get caught as they have no positive future to look forward to, or they simply think they wont get caught.
Radio NZ this morning interviewed an ex mongrel mob man from Hawkes Bay who now organises training for unemployed youth - set up his own company called Topline contractors. left the mob as going to jail was bad for his kids and in the mob he couldnt be good and as he said walk the talk for them
When asked what he would like to see the govt do his answer was cut the dole for all those that are fit to work - announcer was a bit speechless as she was expecting a much more wokey answer
He is one tough task master - if you are on the dole and sign up to work for him he sends a van at 6 am to pick you up and if you are not ready will march inside and haul you out of bed if necessary
Great guy. I've met him. He really is doing the mahi. The Seven Sharp story is worth a watch. https://fb.watch/pDdS1slhDn/?mibextid=Nif5oz
I know I'll get a lot of flack for mentioning this, on account of entitlement mentality etc. Number of superannuitants earning over $100k = 30k. Over $200k = approx 8k.
- 8k x $20k p.a. = $160 million p.a.
- 30k x $20k p.a. = $600 million p.a.
Yet screeches and hollering when nurses or teachers need a bump in pay.
https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018735910/n…
https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018810787/n…
One of the biggest winners on that score was his rival Mark Zuckerberg, whom he was due to fight in a cage match earlier this year before the pair thought better of it. The Facebook founder’s fortune leapt by 184%, from $45bn to $128bn, as the value of the social network’s parent company, Meta, soared by 172% over the year.
Maybe we should have cage fights for the poor who commit crime.1 billion dollar purse?
That's right, there is no magic fix. The appalling performance of the previous government in the area of law and order will take time to fix.
But, it will come. GG has just been charged with shop lifting, and she needs to accept the consequences of her actions when she is found guilty (very likely based on the evidence in the public domain). This will be an example to others. Any other result, i.e. guilty and then a wet bus ticket, is not acceptable given that the government has a policy of stamping out crime and ridiculously light sentences (hugs and KFC are no longer valid punishment).
What is more than unfortunate is the sorry tale that has lifted markedly in the last few years or so of mps behaviour that has been little more than sordid. Sort of got underway with the Ross revelations along with his concubine, Walker and Boag, Galloway and his hyphen, Falloon and his projections, the cry baby defection from the Greens, a couple of ethnic Chinese from either side suddenly gone, the Minister of Justice, no less, criminally charged to illustrate just a bit of it. To be honest I voted for MMP in the hope that the integrity and application of our parliamentarians would improve from the shenanigans that the like of Muldoon had descended to. In reality it’s now likely worse.
Location, location, location.
A downtown development site in the forever hot Vancouver property market was acquired for $173 million in 2018.
It is now fetching offers at for $93 million and the development is in receivership. These are land prices for luxury high rises.
Anything to do with China ya reckon?
https://storeys.com/1045-haro-thurlow-partnership-receivership/
You'd be mad to sign a purchase agreement for an apartment in Sydney these days. Seems like 1 out of 2 properties are essentially broken before they're even occupied.
Four blocks of 900 new apartments in Macquarie Park are at risk of collapsing due to “serious damage” to the concrete in its basement, the state’s building authority says.
“This is a defect in a building product or building element that causes or is likely to cause the basement slab to fail, namely, to fracture and collapse, leading to the destruction of the building or any part, or the threat of collapse of the building or any part,”
The reported defect would likely mean the concrete slab would be unable “to withstand the carpark and ground floor loads”.
https://www.smh.com.au/national/nsw/northern-sydney-apartment-complex-a…
Came across this Australian building inspector on YouTube (lol) showing footage of some shockers - seems like there's some serious issues in Australia with dodgey builds being signed off by building authorities. No doubt similar practices going on here. https://youtube.com/@Siteinspections?si=z4UGqsOq9WnVi5yR
The latest building plague in Auckland is engineered floorboards. Huge issues with performance, looking like both poor materials and installation methods. They don’t need council sign-off so I guess many developers are just doing it ultra cheap. And the onus is on the tradies to fix the problems. so the developers can wash their hands of it.
Won’t result in buildings falling down but sure as heck frustrating for the buyers of new properties.
And usually the problems are not being properly fixed so the issues keep re-emerging - cracks, buckling, lumps etc
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.