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
The Co-operative Bank cut its six month fixed rate by -10 bps to 6.09%. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here today. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
OUR ECONOMY MAY BE SUBDUED, BUT PEOPLE STILL WANT TO COME
Just under 200,000 people are currently in here on work visas, with residence visa approval numbers up +59% compared to pre-Covid levels.
POSITIVITY HARD TO FIND
The latest ANZ Truckometer monitoring shows there is no relief from the dour economic performance the nation is mired in at present.
A MINOR DIP
Both SMP and WMP prices slipped in the latest GDT Pulse event overnight from the prior week's full dairy auction. But the dips were minor, so you can say prices have basically held after the recent run-up. At the same time, the NZD has fallen, so that mitigates the latest easing in local currency.
SHRINKING SECTOR
The manufacturing sector is in a rather serious decline. Excluding the dairy and meat industries, nominal sales have now declined on a full year basis for seven straight quarters to be down -6% to just $83.3 bln. Since these records began in 1992 there has never been such a long term decline. In volume terms it is down more than -17% from its 2021 volume peak. Making or processing stuff here other than dairy is tough. The businesses that do so are heroes just to survive.
NZX EQUITY MARKET UPDATE
Here is a summary of how the NZX equity market traded today, as at 3pm. Hallenstein Glasson, The Warehouse, and Mainfreight lead todays gains, with Manawa Energy, Ryman, Stride Property, and the NZX the big decliners.
AUDITOR-TURNED-POLITICIAN CANCELLED
The FMA has cancelled the New Zealand licence of Sydney based auditor, Sam Danieli, to carry out FMC audits in New Zealand. New Zealand allows recognition of Australian based auditors under the Trans-Tasman Mutual Recognition Act (the TTMRA). The decision stem from the audit of former FMC reporting entity Alliant Perpetual’s financial statements for the year ended 31 January 2022. Danieli conducted the audit. Danieli is a high profile Sydney accountant who was once mayor of Warringah Council, and who ran for the Sydney City Council.
SPENDING HABITS NOT YET DRIVING RECOVERY
Our largest bank says the card activity of their clients remains very subdued. Overall card spend was down -1.2% in November from a year ago in nominal terms, more so obviously after inflation's effect. They say the types of spending most sensitive to interest rates (housing, durables, and discretionary spending) are still experiencing the largest falls.
"SAVING THE PLANET IS AN ILLEGAL ANTI-COMPETITIVE SCHEME"
The peak farming lobby group, Federated Farmers, is upping is campaign against the Net-Zero Banking Alliance, where banks have agreed to focus their lending on climate-friendly projects and avoid climate-unfriendly ones. Fed Farmers have complained to the Commerce Commission about fears banks will move to stop lending to 'petrol stations' and ask existing borrowers to pay back those loans. Essentially they claim membership of the Alliance is an anti-competitive arrangement. More here.
FMA SEEKS APPLICANTS FOR 'REGULATORY SANDBOX'
The Financial Markets Authority is launching a pilot “regulatory sandbox” and is seeking applications from interested parties. A regulatory sandbox is a concept allowing firms to test innovative products, services or business models. An initial pilot phase will run from January to July 2025, with a decision on the need for a permanent FMA regulatory sandbox to be made later in the year. The pilot's open to all parts of the financial sector that fall under the FMA remit and can include new entrants and firms already with a market presence. The FMA says products or services that, for example, simplify compliance solutions, or use blockchain or regulatory technologies, could feature.
SIGNS POINT TO RATE HIKE IN JAPAN
In Japan, producer prices rose +3.7% in November from a year ago, higher than in October and exceeding market estimates of +3.4%. It was the 45th straight month of producer inflation, marking the highest figure since July 2023. These pressures will eventually show up in consumer prices. And that in turn will encourage the Bank of Japan to raise its +0.25% policy interest rates. They next review it on Thursday, December 19, 2024, when a +25 bps rise is anticipated by financial markets.
INSURANCE CONSOLIDATION
Meanwhile a huge Japanese life insurer has been on the acquisition trail again. Nippon Life and its wholly-owned MLC Life Insurance business in Australia has acquired Resolution Life. This comes after it also agreed to take over Asteron Life.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed-to-soft today. Most analysts don't see them falling much from here. But to be fair, they have slipped over the past week probably by a bit more than expected. Our chart below will record the final positions. The 90 day bank bill rate was down -2 bps yesterday to 4.30%. The Australian 10 year bond yield is down -3 bps from yesterday at 4.24%. The China 10 year bond rate has fallen another -2 bps to just over 1.89% and another all-time low. The NZ Government 10 year bond rate is down -5 bps at 4.44% while today's RBNZ fix was 4.38% and down -8 bps. The UST 10yr yield is now at 4.23% and up +3 bps. Their 2yr is now at 4.15%, so that positive curve is now +8 bps, with another small rise.
EQUITIES MIXED
The NZX50 has changed little in late trade today. The ASX200 is down -0.5% in afternoon trade. Tokyo has opened its Wednesday trade down -0.3%. Hong Kong is up +0.5% and Shanghai up +0.2%. But Singapore is down -0.3% at its open. The S&P500 was also down -0.3% on Tuesday Wall Street trade.
MARKED DOWN
Shareholders are passing judgment on the ANZ Group succession plan in a fierce way, selling out. The ANZ share price has fallen -6% since the new CEO was announced on Monday.
OIL FIRMS AGAIN
The oil price is up +US$1 from this time yesterday, now at US$69/bbl in the US, and up +50 USc to just on US$72.50/bbl for the international Brent price.
CARBON PRICE SAYS DOWN
The carbon price is staying lower today at NZ$59.25/NZU and a four month low. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD RISES FURTHER
In early Asian trade, gold is up +US$37 from yesterday, now at US$2701/oz.
NZD FALLS
The Kiwi dollar is down -50 bps from this time yesterday, now at 58 USc. Against the Aussie we are also down -50 bps today to 90.9 AUc. And against the euro we are down -30 bps at 55.1 euro cents. This all means the TWI-5 is now just over 67.6 and down -40 bps from yesterday.
BITCOIN SLIPS AGAIN
The bitcoin price has fallen to US$96,103 and down -1.9% from where we were at this time yesterday. Volatility of the past 24 hours has been moderate at just under +/- 2.1%.
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