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A review of things you need to know before you sign off on Thursday; both mortgage & TD rate changes, Crown accounts reveal slowdown, household savings up, swaps firm, NZD firm, & more

Economy / news
A review of things you need to know before you sign off on Thursday; both mortgage & TD rate changes, Crown accounts reveal slowdown, household savings up, swaps firm, NZD firm, & more

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
ASB trimmed their 3, 4 and 5 year fixed rates. More here. NBS reduced its 2 year fixed rate by -36 bps.

TERM DEPOSIT/SAVINGS RATE CHANGES
ASB cut term deposit rates for all terms 18 months and longer. More here. ICBC raised its offers for terms 6 to 12 months.

WFH OK WITH EMPLOYERS DESPITE COOLING JOBS MARKET
Even as the New Zealand labour market has ‘cooled’, Seek says the number of job ads including opportunities to work from home has climbed higher

TAX TAKE UP
The Crown accounts for November show revenue doing better than forecast in the half-year update but worse than a year ago. The IRD collect $5.384 bln in November alone, a record high for any month. But the pace of GST collections is running -16% lower in the year to November compared to the same year in 2022 and that was its weakest in three years.

SETTLING IN A BETTER POSITION
Household net worth showed first gain since late 2021 as house prices recovered somewhat in Q3-2023. Net worth increased by a tiny +$5.3 bln in the September quarter to $2.3 tln, while the household savings rate remained steady at +1.4%. Prior to March 2019 household savings were persistently negative. During the pandemic they became strongly positive. They have settle down to modestly positive, at +$860 mln in Q3-2023 after being +$840 mln in Q2-2023. Since the pandemic it has been rare to have negative household savings in any quarter.

GOOD DEMAND, LOWER YIELDS
There was $500 mln offered in NZGBs today in three maturities. Overall $966 mln was offered in 96 bids and about half (48) were accepted. The April 2027 $250 mln went for a yield of 4.50% which was lower than the 4.79% achieved in the equivalent tender on December 7, 2023. The May 2034 $175 mln went for a yield of 4.76%, again lower than the last equivalent event on November 2 which achieved 5.35%. The $75 mln April 2037 tranche went for 4.93% yield , lower than the December 7 5.01% for that bond.

QUIET TIME
It is Auckland Anniversary Weekend coming up. Commercial activity is likely to be slow tomorrow in advance of the long weekend. Wellington institutions are likely to release disclosures into a relative vacuum of attention. Corporates may release 'bad news' for the same reason.

A STEADY EXPANSION
South Korea reported a GDP expansion of +2.2% in Q4-2023 over the same quarter a year ago. This was better than expected and the +1.4% rate in Q3-2023.

MOSTLY NOT BEING USED AS INTENDED
New analysis in Australia shows that most banknotes on issue are currently used for non-transactional purposes. Or for crime. Just like cryptos, traditional banknotes are now not being used for transactions. They are either being hoarded of if they are used  for transactions, they are not legal ones. But a shrinking section of the community, including the unbanked, still need them for their intended, traditional use. The RBA analysis found up to 80% of cash is being hoarded, while up to 11% is in criminal hands.

SWAP RATES HOLD
Wholesale swap rates might be slightly higher 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 up +1 bp at 5.66%. The Australian 10 year bond yield is little-changed at 4.26%. The China 10 year bond rate is also little-changed at 2.53%. And the NZ Government 10 year bond rate is holding at 4.83%, while the earlier RBNZ fixing was at 4.75% and up +2 bps from yesterday. The UST 10 year yield is now at 4.17% and up +3 bps from yesterday. The UST 2yr is at 4.38% and up +4 bps, so that key inversion is now little-changed at -21 bps.

EQUITY WINNERS & LOSERS
The NZX50 is little-changed in late trade today, but on the 'minus' side. The ASX200 is also little-changed in afternoon trade, but on the 'plus' side. Tokyo is down -0.4% in morning trade. Hong Kong is little-changed in early trade after yesterday's very large rise. Shanghai is up +0.7% at its open on positive sentiment. Singapore has opened down -0.3%. In New York, the S&P500 ended its Wednesday session little-changed, giving up an earlier +0.7% rise.

OIL HOLDS
Oil prices are holding at just over US$75/bbl in the US while the international Brent price is now just under US$80/bbl.

GOLD LOWER
In early Asian trade, gold is now at US$2015 and down -US$13 from this time yesterday. It closed earlier in London at US$2023/oz.

NZD RECOVERS FURTHER
The Kiwi dollar is now just on 61.1 USc and marginally higher than this time yesterday. Against the Aussie we are back up +20 bps to 93 AUc. Against the euro we are unchanged at 56.2 euro cents. That means the TWI-5 is now at just over 70.1 and up almost +20 bps.

BITCOIN HOLDS
The bitcoin price has moved up today to US$40,048 but only a minor gain of +0.3% from where we were this time yesterday. There's been modest volatility over the past 24 hours of just on +/- 1.3%.

Daily exchange rates

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Daily benchmark rate
Source: RBNZ
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End of day UTC
Source: CoinDesk

Daily swap rates

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Opening daily rate
Source: NZFMA
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Source: NZFMA
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Source: NZFMA

This soil moisture chart is animated here.

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19 Comments

New analysis in Australia shows that most banknotes on issue are currently used for non-transactional purposes. Or for crime. Just like cryptos, traditional banknotes are now not being used for transactions.

Looks like the RBA is trying to build its case for a cashless society and a potential CBDC. Aussie and NZ are far behind countries like the US and the Global South who do actually think about the implications of monetary sovereignty. I wish Maori would think about these issues more as well. The Maori elite seem more than comfortable with the status quo and pay little attention to how the state and ruling elite destroy the value of people's labor and savings. My colleague pointed out to me that of course the Maori elite are comfortable with the status quo as they're actually benefitting from it. 

F'more, the idea that crypto is not used for transactions is beside the point. If the ol' rat poison has emerged as a store of value, it makes sense that it's not used for transactions. Why spend BTC on a cup of coffee when you can use deflating fiat currency? Quicker and more convenient. And you're spending money that you've allocated for consumption, not for saving. 

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Completely anecdotal: A few more houses for sale and rent in our area than over the past few years...

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Other than new houses/duplexes, I think It is mainly "B" grade houses for sale in the northern North Shore.

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yeah saw a few in long bay and torbay for sale last drive through, not trophy houses.

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Yup. The banker government cartel has to get rid of cash . They support each other so that they can share a cut from all transactions as they are forced to go through the bank system. All free, independent transactions have to be labelled, "bad". All system transactions,"good". Us conspiracy theorists are having trouble keeping up with all the obvious evidence being continually put in front of us.

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 Us conspiracy theorists are having trouble keeping up with all the obvious evidence being continually put in front of us.

'Conspiracy realist' in my opinion

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Or just a regular garden variety realist.

Most issues are in plain sight, the issue is less conspiracy, and more distraction; people are largely caught up in their own monkey mind.

If you think you can relinquish agency over the core basics of your life, nutritional intake, energy needs, health, water, etc to external agents, and be saved by crypto, you're in for some sad times.

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If you think you can relinquish agency over the core basics of your life, nutritional intake, energy needs, health, water, etc to external agents, and be saved by crypto, you're in for some sad times.

Bunkering down in suburban NZ is the answer ya reckon? I would say that existence is as vulnerable as anywhere in the developed world. 

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At what point have I ever advocated bunkering down in suburbia - it's arguably even worse than living in a dense city area.

The pitfalls of capitalism have been espoused for centuries, if not millennia. It's now being hyper accelerated, as individuals become highly specialized, but generally useless. People used to be capable of making their own clothes, growing (or even cooking) their own food, building their own house, etc. Now that's been outsourced to an increasingly small pool of providers, who help shape our rules and consolidate their own interests.

It's not any secret conspiracy, it's by design.

What form money takes in such a system, is small potatoes.

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How can this be?

The average London home has lost £26,000 in value in just two months, according to official data

London house prices fell at the fastest pace since 2009, according to Land Registry data released today.

The average price in the capital was down 6% year-on-year to £505,000 after the second consecutive month of big declines. Prices fell by more than £10,000 in November alone, £26,000 in the space of two months

https://www.standard.co.uk/business/london-house-prices-property-market…

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8)   more sellers then buyers.......

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The world's total wealth now stands at $454 trillion, nearly half a quadrillion. Split amongst us all, this would be $84,718 per adult. Instead, the median individual has only $8,654 to his name. China is the least unequal of the world-regions with a median comparable to Europe despite having 2.36x less wealth per capita. This also puts a lie to the common Malthusian trope of "we can't all live like Americans" as the median American wealth is comparable to the average global wealth. It's just poorly distributed. Link

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HUDSON:Well, the key to understanding the West’s neoliberalism is privatization of basic needs and basic utilities. The most important public utility throughout history has always been the ability to create money and credit. 

And what China has that no other country had was its central bank created the own money. 

And when the government creates money through the treasury, spending money into the economy, it spends money in order to actually build things, mainly to build real estate, to house the Chinese, but also to build the high speed railroads, to provide an educational system, universities all over China, to build communications. 

Other countries, such as the United States, don’t have this. Money is created, especially in the United States, by commercial banks, and they create money not to finance new construction of factories or new investment of any sorts. Banks lend money in the West against collateral that is already in place. You can go to a bank to get money to buy a building that exists, an office building, although the office building’s prices are all collapsing now. You can go and borrow money to buy a whole company. That’s what private capital does. It buys money to buy Sears. It drives it bankrupt, collapses it, and fires the [workers]. 

It can buy Toys R Us, drives it bankrupt, collapses it, and it’s gone. You can buy companies and loot them and essentially close them down and turn factories into gentrified buildings for the 1% of financial operatives who are doing the looting. 

But banks in the West do not fund public utilities, and once you cut the taxes and force a government into deficit, you then finance the deficit by privatizing your roads, turning them into toll roads. You privatize your postal system. You privatize your health care system so that there’s not much health care anymore, as you have in England, for instance, the crisis that you’re having in English medicine and hospitals and privatization. You make the whole economy in the West look like England after Margaret Thatcher, where people who are actually wage earners can’t afford to live in London anymore. That’s for the foreign investors or the people who work in the financial sector. The wage earners have to live in suburbs to take privatized rail transportation. 

In the United States, for instance, Greyhound, the bus system, was just bought out by private equity. They did exactly what Stagecoach, England’s largest bus company, did in England. They sold off the bus terminal that was in the center of the city that people would go to to catch the buses, and they sold it for gentrified real estate and told people, there’s now a parking lot we have on the outside of the city. You go and wait in the parking lot. 

We hope it’s not raining or too cold or snowing, but we don’t have a terminal anymore. Well, you can just imagine this way of doing things. It turns into a race to the bottom. 

Well, China, by [keeping control of] finance, really controls who is going to get the credit, and credit is really the economic planner. Neoliberalism in the West says the government shouldn’t do the planning. Wall Street should do the planning because Wall Street is what provides the credit that determines who is going to get the resources and what they’re going to do with it. 

Well, Wall Street gives the credit to financial engineers that are trying to make money by increasing stock prices, increasing capital gains, and making money financially. 

It’s true that China has made many billionaires. That was part of the Let 100 Flowers Grow, but now that it’s had that spontaneous growth, now it’s seen what forms work and what forms don’t work. Now it’s consolidating the economy to essentially create credit to finance tangible industrial growth, tangible infrastructure growth, tangible agricultural modernization, and general improvement of living standards. 

The whole aim of the Chinese economy is growth, not looting and downsizing and a smash-up of corporate raiding. There’s no corporate raiding going on in China. There’s not going to be any financial interest that’s going to buy Huawei or the other Chinese developers. You don’t have the parasitical financial class that have become the central economic planners of the United States. 

Because that’s what libertarianism is. Libertarians want a centralized economy, not run by government but run by Wall Street and the financial sector. The libertarians are essentially the advocates of what normally used to be called fascism, central planning by the wealthy financial and monopoly sector against the population at large. 

You have the Republican and the Democratic Party both supporting a dismantling of government just with a different kind of rhetoric, but the same policies, the same military policies and the same anti-industrial policies. China, Russia and their now more and more BRICS countries are rejecting that whole self-defeating neo-feudal path of growth. 

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Does wealth per capita take into account quality of publicly funded services and personal freedom in each country? 

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Define poorly distributed! If it were equally distributed I may as well sit on my ass all day. 

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Australia reaches 27 million population thirty years earlier than forecasted. Maccy B highlights that the cost of building a home has increased by around 30% in the last 24 to 36 months compared to pre-COVID levels, owing primarily to pandemic-induced supply chain challenges and worker shortages, as well as energy price increases caused by the Russia-Ukraine war.

Albo is madder than a cut snake. 

https://www.macrobusiness.com.au/2024/01/perfect-storm-flattens-housing…

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Prior to March 2019 household savings were persistently negative. During the pandemic they became strongly positive

Regular reminder that household savings go up when govt deficit spends and down when Govt runs a surplus. It's just accounting.

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To be fair they also go up when you are locked in your house and can’t spend anything. 

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How do you think so many people were able to sit in their houses saving money? Because the govt pumped a shedload of money out to keep people employed

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