Here's our summary of key economic events overnight that affect New Zealand, with news financial markets are absorbing some conflicting American data, and moving sideways today, with the USD easing.
There were two services PMIs for the giant US economy out today. The ISM version edged up slightly for November, notable because it was expected to edge down. And the result is the best in nine months for this metric. The continued expansion in both business activity and new orders drove this outcome. Similarly, the S&P Global version for the US service sector reported an expansion although less than in October. Both surveys noted high embedded inflation however.
US industrial production rose +0.1% in September from August, following a downwardly revised -0.3% drop in August. This means from a year ago, American industrial production is up +1.6%. Better than a decline but nothing like how the tariff-effects were sold. This activity was far better in the Obama years.
But the ADP private sector payrolls report for November brought tough news. Businesses cut -32,000 jobs in November, following an upwardly revised +47,000 gain in October. Analysts were expecting this report to show a +10,000 rise based on ADP's weekly reporting. It is the biggest decline in payrolls since March 2023, led by a -120,000 drop at small businesses. We won't get the official non-farm payrolls report for November until December 17 (NZT), in its delayed restart.
And the volume of mortgage applications in the US fell by -1.4% from the previous week in the last week of November to the lowest level in nearly three months. And that happened even though the key mortgage rates fell to a four week low.
US vehicle sales were modest in November. They rose from October to 15.6 mln units but that is a long way down from the 16.7 mln in November 2024.
Across the Pacific in China, their services sector continues to expand, driven by a sustained increase in new business, though the expansion slowed since October.
China's local government debt continues to balloon as the lingering real estate slump has led to decreased income from property sales, pushing local government bond issuance for the year to a record high. The total owed by local governments and the local government financing vehicles that fund their projects now sits at a remarkable ¥134 tln (NZ$33 tln).
In the EU, producer prices were little changed in October from September, but from a year ago they have dipped -0.2%. So no inflation pressures from this direction.
In Australia, their economy grew less than expected in Q3-2025. Economic activity expanded +0.4% from the June quarter. Markets had expected a +0.7% expansion as it had in Q2-2025. Still, it was the 16th straight quarter of expansion. On a yearly basis, their GDP rose +2.1%, less than forecasts of +2.2% and after a +2.0% growth in Q2.
The UST 10yr yield is now at 4.07%, down -3 bps from this time yesterday. The key 2-10 yield curve is still at +58 bps. Their 1-5 curve is now positive by +6 bps and the 3 mth-10yr curve is positive by +30 bps in another big move. The China 10 year bond rate is holding higher at 1.83%. The Australian 10 year bond yield starts today at 4.62%, up +1 bp. The NZ Government 10 year bond rate starts today at 4.43%, down -7 bps from yesterday.
Wall Street has started its Wednesday with the S&P500 up +0.3%. Overnight, European markets were all little-changed in a +/- 0.1% range. Yesterday, Tokyo closed up +1.1, Hong Kong was down -1.3%, and Shanghai ended down -0.5%. Singapore closed up +0.4%. The ASX200 ended its Wednesday session up another +0.2%. The NZX50 ended up +0.6%.
The price of gold will start today at US$4218/oz, and up +US$32 from yesterday.
American oil prices are +50 USc firmer at just over US$59/bbl, while the international Brent price is now at just under US$63/bbl.
The Kiwi dollar is up +40 bps from yesterday, now at just under 57.7 USc. Against the Aussie though we are unchanged at just on 87.4 AUc. Against the euro we have also held at 49.4 euro cents. That all means our TWI-5 starts today at just under 62.1, and up +20 bps from yesterday.
The bitcoin price starts today at US$92,535 and up +1.9% from this time yesterday. Volatility over the past 24 hours has been modest, at just on +/- 1.8%.
Finally, please note that there be no 4pm update later today. That is not because of a dearth of things to report, but because there will be no-one on hand to do that. The interest.co.nz team is taking the day off for our end-of-year function.
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7 Comments
https://www.stuff.co.nz/home-property/360908071/theyre-trapped-190000-l…
Quote of the day: you can take solace from the fact that you aren't alone.
Also great ideas from the financial advisor: maybe just borrow 190k from a family member. Or maybe buy another house and hope that one goes up in value 👍
Depressing for them. And one financial advisor would have them consider borrowing more to concentrate even more risk into the residential property market. WTF?? Diversification anyone? Ethics of the advice??
This article talks about the impact of immigration and the rate of new house builds and holding for long term capital gain.
But no mention of serviceability.
My reckon: house prices are still too high in terms of serviceability of the size of mortgages required, based on the incomes we earn in this country.
I guess it’s like any investment, you can lose money. In their case it isn’t a big percentage, in many other investments you can lose 100% (Bitcoin has done worse over the last few weeks!). They also get to live in their investment, the 40k a year they are paying is probably similar to rent.
Buying a brand new house you have to expect some depreciation, much like buying a brand new car. You pay a premium to be the first owner, the next person won’t pay it.
As for the advice, I guess like any investment you can either sell it while you can, or assume it’s cyclical and hold it. History would say it’s much better to hold.
Not one of the the extremely knowledgeable advisors put forward a scenario where this isn't the bottom. All of them still only see property as one way despite the last few years bashing them over the head. Not saying cutting their loses would be best but to completely ignore it dropping from as a scenario here is willfully blind.
End of year function: meat balls at Ikea perhaps!!
With a couple of pints of Ikea Lager
Depressing to read about the staged exit of Cuddles. The walk back from tough on crime Misled Mark would be amusing if he was a comedian, and he was a busker. But he is the Fxxxing Minister! I really object to my tax dollars being wasted on paying out Coster and continuing to pay Roche. Under performing NZ economy? This club has to go, root and branch.
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