Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
SBS Bank cut its floating rate by -50 bps along with its First Home Construction loan which is now down to 4.94%. But it hasn't yet adjusted its reverse mortgage loan rate which stays at 9.75%. Co-operative Bank reduced some fixed rates. Heretaunga Building Society cut too. All rates are here.
BUSINESS LENDING CHANGES
Rabobank said it will reduce the variable base rate on its rural loans by -50 bps from December 2, 2024. They said borrowers using its fixed rates within its All-In-One loan facility have already reflected daily changes in wholesale markets that had priced in the expected cuts to the OCR within the last month.
TERM DEPOSIT/SAVINGS RATE CHANGES
SBS has cut its i-Save account interest rate by -50 bps to 0.60% and its Call rate to 0.55%. Co-operative Bank has trimmed two key TD rates. Squirrel has cut its on-call rate by -50 bps to 4.00%. The Sharesies Save account has gone down -50 bps to 3.35%. All updated rates less than 1 year are here, for 1-5 years, they are here. We also hear that one of the most competitive term deposit banks will cut rates on Monday. Time to lock-in if you are thinking of a TD.
JOB POOL KEEPS SHRINKING
The latest Statistics NZ figures show there are over -35,000 fewer filled jobs in the country than a year ago. This is a seventh consecutive month of job retreats (although in raw terms they rose in October).
HOUSING MARKET THAWS
The Reserve Bank has raised its 2025 house price growth forecast to +7% in 2025. The latest monthly figures show a seasonally adjusted rise of +3.3% in committed mortgages. And investors are now taking the biggest share of mortgages since early 2021. But an ageing and wavering population will keep a lid on a full return to high-froth. More here.
IT MIGHT BE TOUGH BUT BUSINESS MANAGERS ARE VERY UPBEAT
The ANZ business confidence survey was little changed in its November survey. The very high general confidence level slipped just minorly. The 'own activity' assessment actually rose again, pushing it to a higher level and a new ten year high.
NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Gentrack, Tower and Vista led the gains but were overwhelmed by Ryman, F&P Healthcare & Genesis, which took the NZX50 down -1.2% at 3pm.
SKY HIGH DEMAND, LOWER YIELDS
There was huge demand for the NZGB bond tender today, enough to drive the YTMs lower for the two big ones. The $250 bln April 2029 attracted 41 bids worth $832 mln. This maturity was offered last week as well, and the yield fell from 4.16% last week to 3.95% at this event. The $175 mln April 2033 g also got 41 bids and they were worth $673 mln. It has been 22 weeks since this maturity was offered, yet the yeild fell to 4.37% from 4.65%. Along with the small May 2041 maturity, all up $1.776 bln was bid for the $500 mln available.
LOCAL INSURER MAKES PROGRESS
Tower is making market share progress. Their premiums close in on $600 mln, up +15%. The CEO says premium rises will stabilise as inflation comes down.
WESTPAC NZ'S ACTING EXECUTIVES
Westpac NZ has announced three "acting" executives amid changes to its executive team. The bank says James Grant, currently CFO for the Westpac Group's Specialist Business Division, will be Acting Chief Financial Officer from January 13 succeeding the retiring Tania O’Brien. Stephen O’Brien, currently Westpac NZ's General Counsel, will be Acting Chief Risk Officer from December 2 after current CRO Dirk McLiesh leaves. Stefania Esposito, currently Head of Regulatory Affairs and Investigations, will be Acting General Counsel from December 2 in place of O’Brien. All appointments are subject to regulatory approvals.
UNEXPECTED CUT
The Bank of Korea cut its base rate by -25 bps earlier today to 3.0% during its November meeting. It was a cut not expected and was the second straight month of rate reductions, bringing borrowing costs to their lowest level since October 2022.
HOW THEY READ THE SIGNALS
In China, the CCP top leadership is apparently very concerned about 'social stability' risks. A top national official has been out telling local officials to strengthen “risk prevention and control at the source”. He said that “it is necessary to rely on technology for police force and combat effectiveness, deeply mine the "rich mine" of legal data, strengthen data identification, screening, analysis and evaluation, and find ways to identify and screen out potential risks".
WHY WE SHOULD TAKE MORE NOTICE OF CALIFORNIA
apropos of nothing in particular, I was surprised to find that only three countries in the world have GDP larger than California - China, Japan and Germany. That is at current exchange rate. But if you use PPP, then California is #11. Having said that, it has the smallest population than the other ten. So on a per capita basis it wins there too.
INVESTMENT SURGE
Private capital investment rose +1.1% in Australia in Q3-2023. And that was despite a -1.9% drop in the mining sector. And you can see that in the distribution by State. New South Wales led the way with a +3.6% rise followed by Victoria's +3.2% gain. The largest falls were in South Australia (-10.9%) and the Northern Territory (-17%). WA was down too, but a lesser -1.3%. Large building projects involving large scale upgrades in the manufacturing sector, and large data centre projects, were a driver. Many companies in this survey say they plan an investment surge in 2025. Westpac described the trend as a "once in a generation structural change".
SWAP RATES FALL
Wholesale swap rates are probably back lower today, unable to extend yesterday's rise. Our chart below will record the final positions. Yesterday the 90 day bank bill rate was little-changed again. The Australian 10 year bond yield is down -7 bps from this time yesterday to 4.42%. The China 10 year bond rate is unchanged at 2.06%. The NZ Government 10 year bond rate is down -10 bps at 4.55% while today's RBNZ fix was 4.50% and down -1 bp. The UST 10yr yield is now at 4.26% and down another -2 bps. Their 2yr is down at 4.23%, so that positive curve is now only to +3 bps.
EQUITIES MIXED
The NZX50 has fallen -0.8% after clawing back some of the 3pm loss (above). The ASX200 is up +0.6% in afternoon trade. Tokyo is up +0.5% at their open. Hong Kong is down a full -1.0% at its open and Shanghai is down -0.1%. Singapore is starting up +0.2%. Wall Street ended its Wednesday session, and ending the week before the long holiday, down -0.4% on the S&P500.
OIL HOLDS
The oil price is little-changed from this time yesterday, now at US$68.50/bbl in the US, and still just over US$72.50/bbl for the international Brent price.
CARBON PRICE STILL ESSENTIALLY ON HOLD
The carbon price is very marginally firmer today at US$63.80/NZU today. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD SLIGHTLY SOFTER
In early Asian trade, gold is down -US$4 from this time yesterday, now at US$2627/oz.
NZD FIRMS
The Kiwi dollar is up +30 bps from this time yesterday, now at 59 USc. Against the Aussie we are unchanged at 90.7 AUc. And against the euro we are down -10 bps at 55.9 euro cents. This all means the TWI-5 is now at 68.3 and up +10 bps.
BITCOIN RISES
The bitcoin price has risen +3.9% from this time yesterday, now at US$96,328. Volatility of the past 24 hours has been moderate at just on +/- 2.7%.
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