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
Unity Money trimmed its 2 year fixed home loan rate today and down to a level below all the main banks.
TERM DEPOSIT/SAVINGS RATE CHANGES
Unity Money raised its 9 and 12 month term deposit rate to 6.10%. Gold Bank Finance has reduced its 18 month rate from 8% to 7.25%.
WELLINGTON HOLIDAY
Remember today is a public holiday in Wellington.
HIGH LEVEL OF ADDITIONS TO AUCKLAND HOUSING STOCK
According to the latest Auckland Council data, more than 1900 new dwellings were completed in the Queen City for a third month in a row in November, extending the record run. To put these three months into perspective, data shows there were 9426 used homes listed at the start of September and 9502 listed at the end of November (realestate.co.nz). There were 5935 homes sold in the three months (REINZ). In this period, 5801 new dwellings were added to the regional market. This surge may explain why there is no demand overhang in this market so far. But retreating residential consent levels might change that in 2024.
DEFENDING THE YUAN IS JOB 1
China's Loan Prime Rates are unchanged, not a surprise given last week's unchanged MLF rate. The unchanged LPR rates are because their central bank is in a very tough position, having already prioritised keeping up the value of the yuan.. Lower interest rates would make it almost impossible to hold the yuan's value - and they are prepared to take the risk on economic expansion.
COMMODITY SPIRAL
The almost halving of the nickel price over the past year is causing a messy shakeout among miners in Western Australia (and globally in fact). Mines are closing and those running are loosing big money. High inventories and very weak demand from China are behind the retrenchments. Nickel is mainly used in making alloys such as stainless steel. Among other technical industrial applications, it is used in batteries as a "critical mineral", including rechargeable nickel-cadmium batteries and nickel-metal hydride batteries used in EV and hybrid vehicles. The lithium price has fallen even further and its miners are taking a cold bath too.
SWAPS HOLD
Wholesale swap rates will probably be little-changed 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 at 5.65%. The Australian 10 year bond yield is down -3 bps at 4.30%. The China 10 year bond rate is unchanged at 2.52%. And the NZ Government 10 year bond rate is down -5 bps at 4.79%, while the earlier RBNZ fixing was at 4.75% and unchanged from Friday. The UST 10 year yield is now at 4.11% and down -6 bps from Saturday. The UST 2yr is at 4.39% and up +2 bps, so that inversion is now out to -28 bps.
EQUITY WINNERS & LOSERS
The NZX50 is up +0.2% in late trade today. The ASX200 is up +0.6% in afternoon trade. Tokyo has opened up yet another strong +1.4% in morning trade. But Hong Kong has opened down -0.8%. Shanghai has opened down -0.6%. And Singapore has opened up +0.2%. The S&P500 futures suggest the record high on Wall Street will get extended when it opens in New York tomorrow, perhaps up by +0.9%.
OIL SETTLES
Oil prices are down -50 USc from this morning at just on US$73/bbl in the US while the international Brent price is now just over US$78/bbl.
GOLD ON HOLD
In early Asian trade, gold is now at US$2030/oz and up just +US$1 from where we opened this morning.
NZD FIRMS SLIGHTLY
The Kiwi dollar is now at 61.3 USc and up +20 bps from this morning's open. Against the Aussie we are unchanged at 92.8 AUc. Against the euro we are marginally firmer at 56.2 euro cents. That means the TWI-5 is now just back over 70.
BITCOIN SLIPS SLIGHTLY
The bitcoin price has eased down today to US$41,418 and down -0.4% from where we were opened this morning. There's been low volatility over the past 24 hours of just on +/- 0.7%.
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14 Comments
The almost halving of the nickel price over the past year is causing a messy shakeout among miners in Western Australia (and globally in fact).
Indeed.
Billionaire Andrew Forrest is shutting the West Australian nickel mines his private company, Wyloo, bought for $760 million six months ago, bowing to the supply glut that has crashed nickel prices and triggered the loss of around 1000 jobs across WA.
The latest capitulation brings job losses across WA nickel mines to more than 1000 since the start of December, despite demand for the metal used in stainless-steel making and electric vehicle batteries.
https://www.afr.com/companies/mining/forrest-shuts-wa-mines-as-nickel-d…
Wobbly times in the mines.
- Albemarle puts Kemerton lithium project on backburner in latest blow to critical minerals sector https://www.abc.net.au/news/2024-01-18/kemerton-lithium-project-on-backburner-blow-to-mining-sector/103364330
- Ravensthorpe nickel mine to cut 30 per cent of workforce as mining suspended amid weaker metal prices https://www.abc.net.au/news/2024-01-15/ravensthorpe-nickel-mine-to-cut-30-per-cent-of-workforce-as-mini/103322050
- On-site staff at Panoramic Resources Savannah nickel mine made redundant as prices continue to fall https://www.abc.net.au/news/2024-01-10/halls-creek-savannah-nickel-mine-layoffs/103297450
- Alcoa Kwinana alumina refinery phased shutdown announced with around 1,000 job losses https://www.abc.net.au/news/2024-01-09/alcoa-to-close-kwinana-alumina-refinery-job-losses/103295918
- Core Lithium announces suspension of mining at Finniss project near Darwin, with up to 150 jobs to be lost https://www.abc.net.au/news/2024-01-05/core-lithium-mine-darwin-nt-operations-suspended-job-cuts/103287454
OECD Secretary General and ex-Aussie Finance minister Mathias Cormann has been exposed as being the 'secret owner' of a company that made big $$ from Aussie taxpayers. The company was given $9m in Australian govt contracts while Cormann was a a secret owner and was run by the CEO of PwC Australia (involved in the tax leaks affair). As Finance Minister, Cormann was at the centre of multiple scandals.
Sayers Group, like PwC, makes large amounts of money through government contracts by providing services previously provided by public servants, often at several times the cost.
https://theklaxon.com.au/firm-secretly-owned-by-oecd-boss-given-taxpaye…
House price correction continuing in San Francisco, Bay Area, and Silicon Valley with the lowest Dec prices since 2017 & 2019.
Wolfie Richter gives his expert perspective.
“Housing Crisis” – that’s the term being used to describe the problem in San Francisco and in the Bay Area overall of housing being so expensive that normal people with good incomes cannot afford to buy a house. And rents are too expensive too. Pressured by these housing costs, companies are having to offer enormous salaries to recruit people into this area, which makes employment costs very expensive. There are all kinds of taxpayer-funded initiatives – from federal, state, and local governments – to lower the burden of those housing costs, but they’re expensive for taxpayers!
https://wolfstreet.com/2024/01/21/status-of-the-housing-bust-in-san-fra…
Granny Herald thinks that cold storage for BTC is "like a USB".
Good indicator we're still very early.
https://www.nzherald.co.nz/business/exclusive-15m-flows-to-us-bitcoin-f…
Always bugs me that quiz questions , state that stainless is stainless because it has chrome in it . As an apprentice welder it was always the nickel that defined stainless steel. and the non magnetic properties.
Maybe the rise of newer stainless grades , other than the 304 and 316, means less nickel , more chrome. also the drop in the use of nicad and NIMH batteries , due to been replaced by lithium.
A key question: how much stock added by new builds in say 2016-24?
Then, compare sales numbers to total stock, as a %
This I feel will show sales lower than they seem, as a proportion of total stock. This is a relevant market metric
Not doing this means not using an applicable updated denominator when assessing sales and state of market.
For example, Barfoots annual sales only exceeded the 10 year average of 10,300 pa, in one year since 2016, which was in 2021. All other years since 2016 were below 10,000. As stock risen considerably in Auckland in that time, sales are in fact worse than look and proportionate decline greater.
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