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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Keep abreast of upcoming events by following our Economic Calendar here ».
54 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
I see what you mean, however, we do expect demand for oil to peak before 2030,and then decline as electrification and renewables come onstream. We are already seeing sharp declines in the growth of oil consumption in Western countries which goes against Jevons Paradox which isn't exactly a law, just an observation of a trend that can be fairly easily counteracted if it is even necessary to do so.
Increase in consumption was not my concern particularly, just better growth through increased efficiency. I was genuinely disappointed when I heard that oil wasn't running out in my lifetime.
Come on.
Running out was NEVER the yardstick.
Peaking of net supply, yes.
And no dam, no windmill and no PV panel, was ever made using a dam, a windmill, or PV power. It will never happen. So what you call 'renewables' is really 'rebuildables' which require fossil energy to rebuild.
Good luck growing on the back of that.
And remember, I was a 'renewable' enthusiast 20 years ago, ço-chaired Solar Action, became an early adopter.
I reckon they would have used windmills to make windmills back in the 17th century. They used them to build ships. The windmill powered sawmill was thirty times more efficient than two men with a saw.
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.
Growth of physical resource draw-down is impossible, at some last doubling-time.
It is therefore futile to grow your population, and your collection of unmaintainable infrastructure, beyond a level which is maintainable.
Working backwards, what level of resource consumption do you want to live at? That will give you an optimum population (it's about 2 billion at good-peasant level, south of 1 billion at ours).
Growth of knowledge, happiness, social interactions and awareness, of course, are up to us - they are cultural, not physical and therefore unrestrained.
But the current pursuit of GROWTH is madness - supported only by folk I regard as stupid, but who may have a cranial-wiring excuse.
Growth of knowledge, happiness, social interactions and awareness, of course, are up to us
Tis a crying shame they are all in decline, and the decline is supported by the profits of the likes of social media.
Increasingly efficient use of energy has been the hallmark of evolution and human technological development since... forever.
Not of evolution - it blunders into dead-ends as often as not.
But humans, yes. Our population however, and our resource consumption, were curtailed until 200 years ago, when we tapped into the FINITE stocks of fossil (think about that word) energy.
They we grew both, exponentially. 1 billion in 1800 became 2 billion around 1930, and we added the last billion in the last decade. Exponential. Until it can't be.
And we tapped into the FINITE energy stock, best-first. Fracking is a next-best-of-the-remaining option, not a best-ever; those have been extracted and consumed/burnt already. And for all the efficiencies (the difference between a Model T and your vehicle) our consumption of the FINITE fossil energy stocks has increased exponentially. As has the collection of entropy-affected stuff we've built.
Jevons was right. Absolutely nailed it. You need to do some learning - probably needs some un-learning of the economics-nonsense you seem to have accumulated, first.
What amazes me is that 2 people ticked your comment - hard to imagine.
The objective of increasing efficiency is not to reduce overall consumption but to maintain or increase growth. That's how evolution works. Some human technologies have also gone down dead ends. With evolution you need to look at the big picture rather than individual species as it is usually impossible to reverse changes.
It's very easy to mitigate Jevons paradox if there is a need to do so. Getting more use out of a good thing is overall even more of a good thing generally. Decreasing oil consumption, for instance, isn't currently a super high priority. That's why there is still a demand for big cars and air travel. That they are more efficient and less polluting is a nice bonus. Governments can introduce measures to curtail the effects of Jevons paradox if there really is a pressing need.
"You need to do some learning" - I have investigated all your claims and all of them, without exception, are disputed by experts.
Experts.
Please name and describe.
Last time I checked, the 2nd Law of Thermodynamics was unchallenged.
Well, except by nutters...
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.
And they are currently on the precipice of invading Venezuela to be abl\e to access their oil, as they know they'll burn through too much of their own dwindling oil reserves trying to go to Europe for any support of NATO etc.
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.
The media of NZ has gotten worse and worse as it was further and further monetised when people stopped buying papers and had to go online. Enter the rise of clickbait articles, opinion pieces becoming more common vs real journalism, and one sided analysis based on the slant of the owners or funders (NZ Govt through the previous govt) of the media outlet in question.
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.
It's mental laziness.
The snake oil salesman won't encourage prospective customers to verify his claims of health benefits. He will act in his own interest at the expense of others.
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.
Cycle cycle cycle cycle..
Need OCR below 1% to continue the trend (or below 0.25% if you include the pandemic in the trend).
I got A.I. to draw a graph of the OCR since 1999 when it was first introduced and I can neither determine a trend nor a cycle.
I dont think we are at the low.
The COVID "cycle" was a black swan event. The real cycle was where we sat at the start of 2020 or end of 2019 and I believe rates were in the 3's.
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.
Thats because of the reserve bank saying that they think we are at the bottom so traders are making bets. Traders make bets all the time. I'll believe we are going to see rates rise when we have 2 quarters of sustained growth and wage pressure.
Or the CPI keeps creeping up from 2.2 to 2.5 to 2.7 to 3 (https://www.stats.govt.nz/indicators/consumers-price-index-cpi/) to outside the RBNZ's mandated band, and even though there is little to no (real) growth, the OCR goes back up with mortgage rates.
New head has made that very clear, she looks after inflation will NAct promote growth via fiscal policy.
Doubt its going to have while NAct still borrowing SO MUCH MONEY
Would the banks do this? It would open up more people to question the link between OCR and mortgage rates. Might be more worth their while to take a slight hit in profit to keep the punters from wising up.
"After four years of massive trade deficits, New Zealand once again has a positive trade balance with the world."
And look how great it’s made our economy
The flow of income offshore is what kills our current account balance. Our trade balance is only half the story. While we send a net 4% GDP offshore, this will need to be more than matched by Govt deficits + private debt increase, or our economy tanks. Thankfully (sic) both are on the up, which is why the economy is on a mild uptick.
"Roy Morgan’s New Zealand Poll for November 2025 shows the National-led Government (National, ACT & NZ First) on 50%, up 0.5% points from a month earlier, extending its lead in front of the Labour-Greens-Maori Party Parliamentary Opposition on 44.5%, down 0.5% points, the latest Roy Morgan New Zealand Poll finds"
https://www.roymorgan.com/findings/10094-nz-national-voting-intention-n…
Roy Morgan polls are dismissed as being maverick to the point that not many publishers of any sort publish them. Yet in reality when the event itself is finalised these polls are found to have been on average the most accurate. A study, over say the last three elections, to establish whether or not that is true would be rather valuable.
Apparently we are at the bottom and kiwis are going to get out and spend.
Nek minnit https://www.nzherald.co.nz/business/companies/retail/black-friday-spend…
Inflation is going up not down - think you're confusion deflationary recessions with inflationary recession.
Rates can go up while the economy shrinks - its just that it hasn't happened in your life time so its the opposite of what your confirmation/recency bias expects to happen (ie the last 4 decades - economy is struggling so we drop rates and things get better - but we may find the dropping rates no longer stimulates the economy when private debt to GDP is more or less maxed out).
correct , people taking lower rates as an opportunity to pay down debt not spend or get more debt....
"Pushing on a string" is a metaphor for making an effort that is ineffective because it can only work in one direction—like pulling a string, not pushing one. The term is commonly used in economics to describe how monetary policy can slow down an economy (by "pulling" on it with higher interest rates) but cannot effectively stimulate it out of a severe recession (because the "push" of lower interest rates has no effect if banks, businesses, or consumers are unwilling to borrow and spend). It can also be applied to any situation where one person or entity tries to force another to take action, but the recipient is unwilling to cooperate.
we are now in a world of pain actually, more accurately a lost decade
Silly banks, they could have simply taken a little less profit and people would be more willing to spend, but instead they raked it in from mortgage holders and now worry nobody is borrowing.
Stagflation
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