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, NBS, and UnityMoney all cut their 6 month to 2 year fixed home loan rates. WBS cut its variable and fixed rates too. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ cut many TD rates 1 year and shorter. They no longer have a 5% one year rate, in fact they now only have 5%+ rate for a 6 month term. Rate cuts also came from SBS Bank, WBS and AMP. All updated rates less than 1 year are here, for 1-5 years, they are here.
A DATA SURPRISE FOR SOME
Census data shows the proportion of people owning their own home is increasing. And renting is declining, according to census data that kind of cuts across the barbeque-conversation narrative that has been widely accepted.
"SUCCESSFUL TRIAL"
Since September, Foodstuffs NI has been conducting a trial using facial recognition (FR) systems to defer retail crime. Today, they released an "independent assessor's report". This final evaluation report by independent analytics firm, Scarlatti, which monitored and evaluated the trial, found there was “strong quantitative evidence” that the use of FR reduced serious harmful behaviour in trial stores by an estimated 16%. The Scarlatti report says a total of 1,742 FR alerts of offenders and their accomplices were generated across stores during the trial – an average of 70 a store – of which around 50% resulted in the person being approached. Scarlatti Director, Dr Adam Barker, said the 16% harm reduction was equivalent to around 100 serious harm events averted, including assaults, abuse and other aggressive or disorderly conduct. But the trial had some rough edges and there are a handful of disgruntled people who claim they were targeted and trespassed 'wrongly' as a result.
ANNOUNCEMENT DUE
Word is that the Government will release its plans on replacing the Cook Strait ferries next Wednesday, December 11, 2024. The strategy around rail capacity will be the key issue (in addition to the costs). That is sure to kick of a pre-Christmas bun-fight.
NZX EQUITY MARKET UPDATE
Here is a summary of how the NZX equity market traded today, as at 3pm. The NZX50 is flat today, finishing the week with a -1.5% decline. Oceania Healthcare, Mercury Energy, lead the gainers with Kathmandu, SkyTV, falling back.
LIVESTOCK DE-STOCKING CONTINUES
In the year to June 2024, the number of beef cattle was 3.7 mln, little-changed from 2023 but down -5.8% from 2020. The number of sheep was 23.6 mln, down -3% from 2023 and down -9.4% from 2020. The number of dairy cattle was 5.9 mln, up +1% from 2023 but down -4.5% from 2020.
MEAT MARKET UPDATE
Here is a summary from Prime Range Meats: "This week prices in China for mutton have been wavering as importers are starting to see more product becoming available and product sold now will be arriving after Chinese New Year. Strong interest continues for lamb in the UK and North America. The outlook for beef continues to be positive in the US while China prices are a bit more volatile. Australia’s two last remaining beef processing plants delisted from the China export market [during the Morrison-era trade tiff] have now been reapproved."
THE NEXT BANK PROSPECT
Fintech Revolut says it is applying for RBNZ banking registration, which would see it launch interest-bearing savings products, and a wide range of credit (debt) products.
NO CHANCE OF PAYING ANYTHING BACK
ANZ has been looking at what the Christmas eve HYEFY is likely to reveal, and they have flagged higher borrowing in the current ear by as much as +$2 bln taking them to a peak of $40 bln this year. That is not a signal of strength in the current fiscal policy settings. They also think additional borrowings will be required in the 2026/27 and 2027/28 out years.
EYES ON RBI
We have noted this before, but it has suddenly got worse. The Indian rupee has fallen -0.8% in the past week, -1.6% over the past six months, extending falls that compounds the long-running decline that started 45 years ago, but has gotten particularly problematic now. Most analysts are not expecting the Reserve Bank of India to cut its 6.5% policy rate when they meet today, probably fearful it will make the international value of their currency fall even further. But other metrics suggest a rate cut is probably warranted. (The rupee is also very low vs the NZD, but to be fair, it is at levels similar to the past ten year average).
BACK FROM THE BRINK
In Argentina, their central bank reduced its benchmark interest rate by -300 bps to 32% earlier today as part of efforts to curb high inflation. This decision follows a -500 bps rate cut the previous month and marks the eighth reduction since President Javier Milei assumed office in December. The central bank policy rate is down from 126% in October 2023. Inflation in Argentina is down from a peak of 292% in April 2024to 193% in October. Monthly inflation is however now running at an annualised rate of 32%. Many readers will remember Milei's election vow to dollarise the Argentine economy. That hasn't happened and probably won't now.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed yet again today. Most analysts don't see them falling much from here. Our chart below will record the final positions. The 90 day bank bill rate was also little-changed yesterday at 4.33%. The Australian 10 year bond yield is unchanged from this time yesterday, still at 4.28%. The China 10 year bond rate has fallen again, another -2 bps, to a new all-time low of 1.95%. The NZ Government 10 year bond rate is up +4 bps at 4.54% while today's RBNZ fix was 4.48% and up +8 bps. The UST 10yr yield is now at 4.18% and down -1 bp. Their 2yr is now at 4.15%, so that positive curve is still +3 bps, all little-changed ahead of the US non-farm payrolls report.
EQUITIES MIXED
The NZX50 has fallen -0.4% in late trade today. The ASX200 is down -0.5% in afternoon trade. Tokyo has opened its Friday trade down -0.8%. Hong Kong is up +0.2% and Shanghai up +0.1%. But Singapore is down -0.3% at its open. Wall Street ended its Thursday trade down -0.2% on the S&P500.
OIL SLIPS
The oil price is down -50 USc from yesterday, now at US$68/bbl in the US, and just under US$72/bbl for the international Brent price.
CARBON PRICE DROPS
The carbon price is noticeably lower softer today in live trade, now down at US$62.10/NZU and down -$1.25 in a post-government auction reaction. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DROPS
In early Asian trade, gold is down -US$28 from this time yesterday, now at US$2617/oz.
NZD SOFTISH
The Kiwi dollar is down -10 bps from where were this time yesterday, now at 58.6 USc. Where to from here? Westpac analysts say the USD is likely to rise in Q1-2025 at the expense of many others including the NZD. Against the Aussie we are up +10 bps today at 91.3 AUc. And against the euro we are down -30 bps at 55.5 euro cents. This all means the TWI-5 is now at 68.3 and down -10 bps.
BITCOIN EASES BACK
The bitcoin price has fallen to US$97,978 and down -2.0% from where we were this time yesterday. Volatility of the past 24 hours has been very high at just over +/- 5.5%.
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