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%.
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