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 RATE CHANGES
No changes to report today. Check out the swap rate chart below which suggests fixed rate cuts are unlikely any time soon. All rates are here. And note, you can compare mortgage offers with our new calculator that takes into account other costs and cashback incentives, here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Rabobank reduced its rate card for both savings and term deposits. Heretaunga Building Society did too. Xceda cut its TD rates and now has none 4% or more. Southern Cross Partners have reduced its 1 & 2 year rates by -25 bps. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
MORE ACTIVITY, HIGHER PRICES, BUT ALSO MORE STOCK
Dominant Auckland realtor Barfoots says its November trading was "an improvement". It saw its average and median selling prices rise, mainly due to a strong return of buyers at the top end of the housing market. But it also reported that its stock levels had risen again and are now at 15 year highs.
'SUMMER WILL BE A BUYERS MARKET'
And that was confirmed by realestate.co.nz who reported that the stock of homes for sale is on the rise while average asking prices declined in November. Their data shows listing numbers of properties for sale nationally are at an 11 year high. The say the summer housing market will be a buyers market.
BUSIER BUT NOT UP TO LAST YEAR
Payments network Worldline says Black Friday, November 28, was the busiest shopping day so far this year for non-food retailers on their network, but spending on the day itself was below last year.
QUIZ TIME
Life might be busy, but take a break and do our newest quiz. It is refreshed and ready for you again.
NZX50 IN MODEST DAILY RISE
As at 3pm, the overall NZX50 index was up +0.3% so far on Tuesday. That puts it unchanged over the past five working days. It is up +3.3% year-to-date. From a year ago it is now up +2.9%. Market heavyweight F&P Healthcare is up +1.8% today. Napier Port, Vulcan Steel, Property for Industry, and F&P Healthcare rose today while Gentrack, Briscoes, Summerset, and Contact declined.
UPCOMING
There is another full dairy auction tomorrow and it will be closely watch to see in the recent weakness has continued or gotten worse. Then on Thursday, Fonterra will be reporting on the timing and process of its big capital return after the sale of its Mainland Group to Lactalis.
SWAP RATES FIRM
Wholesale swap rates are probably higher yet again today, continuing the shift up, especially at the longer end. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +1 bp at 2.46% on Monday. Today, the Australian 10 year bond yield is up another +7 bps at 4.62%. The China 10 year bond rate is unchanged at 1.83%. The NZ Government 10 year bond rate is up +8 bps at 4.50%. The RBNZ data is now 'prior day' with Monday's rate up +5 bps at 4.41%. The UST 10yr yield is also up +5 bps at 4.09%.
EQUITIES MIXED AGAIN
The local equity market is up +0.5% in Tuesday trade so far. The ASX200 is up +0.2% in afternoon trade. Tokyo is up +0.6% in its opening trade. Hong Kong is up +0.8% but Shanghai is down -0.2%. Singapore is +0.2% firmer at its open. Wall Street ended its Monday trade with a -0.5% loss..
OIL HOLD EXTENDS
The oil price in the US little-changed at just under US$59.50/bbl and the international Brent price is still at just over US$63/bbl.
CARBON PRICE STALLS LOW
We can't find any trades again today so the price holds at the low $40/NZU, the lowest since July 2023. (It peaked at $90.5/NZU in September 2022.) The next official carbon auction is tomorrow and likely heading for another failure. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DIPS
In early Asian trade, gold is down -US$25/oz from yesterday, now at US$4216/oz. Silver has also retreated.
NZD ALSO DIPS
The Kiwi dollar is down -10 bps from this time yesterday, now just under 57.3 USc. Against the Aussie we are also down -10 bps at 87.5 AUc. Against the euro we are -10 bps lower at 49.3 euro cents. This all means the TWI-5 is at just under 61.9 and down -10 bps.
BITCOIN DIPS FURTHER
The bitcoin price is now at US$86,504 and down -0.8% from this morning. Volatility has been moderate at just on +/- 2.0%.
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27 Comments
There was a comment made yesterday, which demonstrated a fundamental misunderstanding of physics.
The person claimed to be driving a 'more efficient' vehicle. The extrapolation seemed to be that this changed something.
Here's a quote from an early economist - but one with an understanding of things real (not like the current crop).
'It is wholly a confusion of ideas to suppose that the economical use of a fuel is equivalent to a diminished consumption'.
He was William Stanley Jevons, the year was 1866 p123 of 'The Coal Question. Gave rise to the 'Jevons Paradox', or the 'Rebound Effect'; but spoke the truth about depletion.
And where one misunderstanding goeth, there goeth also others. The parasitic nature of landlords, for example...
Still stuck in the nineteenth century I see.
Your last two words are incorrect.
Anyway, the argument concerning the car was that more efficient use of energy can drive growth. Annual growth just in case you're tempted to have a rant about "exponential" growth. You can have growth yet use less energy if it is used more efficiently.
I'm really trying to help you PDK. Currently your claims are just too easy to refute.
Whooosh
Can you elaborate? My answer to PDK's "I see" was "anyway....' A synonym of "whatever".
Well that was a silly post.
Is annual growth different from exponential growth?
Well, B----- me.
How about 5 minutes growth? Should be through the roof.
I guess ignorance would be bliss. Never been able to go there, myself. I keep remembering that 100 million barrels got extracted and used, today. And yesterday. and tomorrow,
That's depletion, not growth.
Question for you PDK.
Do you see growth as desirable, futile, reckless or something else?
Is it growth is bad, or growth is impossible?
All growth increases entropy therefore all growth bad, very bad. Also, all growth leads to the Universe becoming full up, therefore also bad, very bad.
Increasingly efficient use of energy has been the hallmark of evolution and human technological development since... forever.
If there was no cost to extract it, then yes I see your point: if demand decreases the price will just decrease accordingly and usage will remain the same.
But at some point it becomes dearer to extract it than people are prepared to pay for it. We already see that happening with fracking for example.
Hasn't fracking made the US the top crude oil producer since 2018? A position they hadn't been in for a hundred years.
Interesting (at least to me) that if this is the bottom of the current interest cycle, it will be the first time in 40 - 50 years where the low of this cycle, is significantly higher than the low of the previous cycle.
If so, its a new paradigm/future trend/outlook - one that is new for nearly everyone here as people making adult decisions like how to deal with debt and how to invest (unless of course you are well into retirement! - not sure what % of interest.co.nz readers that would be) The majority of the population had become completely used to each rate cycle bottom being significantly lower than the last - ie monetary conditions always become easier (and debt being easier to service over time - not harder - ie we may now be entering decades of the opposite).
Why do you think Watts is running scared?
Another reason to believe the relentless 'doubling every 7-10 years' NZ property trend is a thing of the past.
Certainly true while rates were dropping as they were from around mid 1980's to 2020 and allowed house prices to consistently rise well above the general level of inflation - but it is why I was arguing on here that we were in a housing bubble in real/inflation adjusted terms (which now appears to be popping).
https://fred.stlouisfed.org/series/QNZR628BIS
But house prices rising at 7% p.a. while wages/general inflation are being 'controlled' by the central bank to rise at only 2-3%, which are the cash flows which service house prices, then you run into a fundamental problem if you understand the finance principle of:
Asset price = cash flow / discount rate.
If the cash flow only rises at 2% but the asset price is rising at 7%, that is only possible because the discount rate keeps getting smaller - which was a true statement from 1980's through 2020.
But if the discount rate stays steady or rises (ie 2021 - now and onwards), then the asset price is in real trouble ie New Zealand house prices now.
No, you can keep issuing keystroked debt-numbers forever.
Well, for as long as banks are believed...
But they're being divvied into an ever-less pile of ever-less quality resources. So expect ever-more inflation. Seen another way; expect rates and student costs and health and taxes and food and and and - to 'cost' more.
I'm damned sure this Government has been briefed - the panic is palpable - but we don't have journalism in this country capable of/willing to understand, and therefore delve. I'd be surprised if the official ignorance is prima facie.
Another reason to believe the relentless 'doubling every 7-10 years' NZ property trend is a thing of the past.
We need to be taught at school why these religious-like urban myths need proper scrutiny. I know it's easy to single out the property seminar grifters, but the wider public should be encouraged to think critically.
If Ashley Church came out with an analysis showing the relationship between money supply growth and the 7-10 year theory, then it would at least stimulate debate and further analysis. But just blindly accepting these things at face value is bad for everyone. It's mental laziness.
Some big factors have changed:
- Interest rates have bottomed out or at least near the bottom
- Population growth will decrease and may even decline
- Housing costs / rents reaching the max of affordability
- Housing related expenses (insurance, maintenance, rates) are rising massively
- Ageing population are selling out
- We are allowed to build houses now
Doubling every 7-10 years seems like old news. And even if they did, it seems you can do as well with other investments without the hassle.
Yep, hard to see house prices increasing rapidly without interest rates decreasing rapidly. But that is assuming this is the bottom of the cycle.
Cycle cycle cycle cycle...
Try: trend
The trend looks like it might be turning. Or not. Time will tell.
Interesting (at least to me) that if this is the bottom of the current interest cycle, it will be the first time in 40 - 50 years where the low of this cycle, is significantly higher than the low of the previous cycle.
In most advanced economies nominal and real interest rates have been on a structural downward trend since the early 1980s, but they have not fallen in a straight line every year.
After 4 decades of falling interest rates, it's all most people know at this point. But gold being up 32% vs. Nasdaq YTD despite the AI boom is your sign that it's time to pay attention.
When push comes to shove, commodities, energy, and hard money are an important measuring stick.
I agree that this is a very interesting point, IF it is indeed the bottom of the cycle. Don't forget the bottom of this interest rate cycle has been called multiple times before, and at a higher rate than it is now.
BNPL usage on Black Friday rose about 9% yoy, confirming that installment-style checkout continues to gain share in online holiday spending. In dollar terms, BNPL drove roughly three-quarters of a billion dollars of U.S. Black Friday ecommerce sales and is on track to exceed $20 billion for the full holiday season.
Relying on debt to buy discounted consumer goods is not good. But does it necessarily signal that U.S. consumers are tapped out? Or is it just a change in behavior?
Higher-income households are leaning in as well, with 38% of those earning over $100,000 using BNPL services. Notably, the trend is expanding beyond discretionary items - 25% of BNPL users are now relying on it to finance groceries.
https://www.businessinsider.com/buy-now-pay-later-black-friday-risks-cr…
"does it necessarily signal that U.S. consumers are tapped out? Or is it just a change in behavior" - or are they just a bit stupid?
3 - 10 year swaps going vertical at the moment. Not buying into the last OCR cut whatsoever.
Mortgage rates will be on the rise again very soon (ie within weeks/months) unless something changes and convinces the swaps to move in the opposite direction.
Many of the swap terms (which determine mortgage rates) are up 50bps in the past month.
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