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. Update: Westpac has lowered one fixed rate and raised four others. More here. 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
None here today either. Update: Westpac has raised some longer TD rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
DISAPPOINTMENT LOOMS
Latest Reserve Bank figures show a third of owner-occupier mortgage money uplifted from new mortgages in October was on floating rates as home owners seemingly bet on further fixed rate cuts that might not come. And this.
FEWER RULES, MORE 'FREEDOM' FOR PROPERTY OWNERS
The Government has announced major 'reforms' to the RMA claiming they will save $13.3 bln, with up to 46% of consent & permit applications becoming unnecessary. RMA Reform Minister Chris Bishop says the new system will strengthen property rights and restore 'freedom' for property owners.
CARBON ACCOUNTING
It's old data (2023) but interesting all the same. A StatsNZ release of greenhouse gas emissions on a consumption basis shows total consumption-based emissions were 58,301 kilotonnes, up +1.6% from 2022. Household consumption was the largest contributor, accounting for 70% (40,764 kilotonnes) of total emissions. The carbon footprint of households increased the most, by +5.8%. It shows the production economy generated 78,779 kilotonnes and we imported another 29,210 tonnes. But the local economy only consumed 58,301 kT with the remaining 49,688 kT exported.
DO OUR NEW QUIZ
The latest quiz is now out. You can do it here.
NZX50 WEAKENS
As at 3pm, the overall NZX50 index was down -0.5% so far on Tuesday. That puts it down -0.7% over the past five working days. It is up +2.7% year-to-date. From a year ago it is now up +4.8%. Market heavyweight F&P Healthcare is down -1.1% so far today. The gainers are led by SkyTV, Gentrack, Kathmandu and Tourism Holdings; the decliners are led by Infratil, Vista Group, Mercury and Stride Property Group.
OWNING UP DRAWS BIG FINE
General insurer Tower has been ordered to pay a $7 mln penalty for misleading representations that resulted in more than $11 mln in overcharges to its customers. Tower self-reported the breaches in 2021 after an internal investigation. The FMA prosecuted anyway.
CONFIDENCE SLIPS BUT STILL POSITIVE
In Australia, the NAB Business Confidence Index slipped in November from October, but stayed just positive, although the weakest reading since April. The survey showed business conditions softened after declines in sales and profitability.
RBA HOLDS
The Reserve Bank of Australia held its cash rate at 3.60% as expected. There's more detail here.
SWAP RATES FIRMER STILL
Wholesale swap rates are have likely turned up further today and again, across the board. 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 2.48% on Monday. Today, the Australian 10 year bond yield is unchanged at 4.73%. The China 10 year bond rate is up +1 bp at 1.86%. The NZ Government 10 year bond rate is up +4 bps from yesterday at 4.60%. The RBNZ data is now 'prior day' with Monday's rate up +8 bps at 4.53%. The UST 10yr yield is up +3 bps at 4.17%.
EQUITIES ALL WEAKER
The local equity market is down -0.6% in Tuesday trade so far. The ASX200 is down -0.2% in afternoon trade. Tokyo is down -0.2% in its opening trade. Hong Kong is down -0.4% and Shanghai is is little-changed but soft. Singapore is up +0.2% at its open. Wall Street ended its Monday trade with the S&P500 down -0.3%..
OIL WEAKENS
The oil price in the US is down -US$1.50 at just over US$58.50/bbl and the international Brent price is now at just under US$62.50/bbl.
CARBON PRICE HOLDS LOW
Secondary market transactions are hard to find today, so still at $40/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD STILL ON HOLD
In early Asian trade, gold is down -US$4/oz from yesterday, now at US$4194/oz.
NZD LITTLE-CHANGED
The Kiwi dollar is down -10 bps from this time yesterday, now just under 57.8 USc. Against the Aussie we are up +10 bps at 87.2 AUc. Against the euro we are -10 bps softer at 49.6 euro cents. This all means the TWI-5 is at just over 61.9 and up less than +10 bps.
BITCOIN SOFTISH
The bitcoin price is now at US$90,055 and down -1.0% from this time yesterday. Volatility has been modest at just over +/- 1.3%.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
17 Comments
5 - 10 year swaps seem to be signalling danger ahead for the central bank if current monetary policy conditions remain status quo. To me, the most significant upward movement in swaps since the 'transitory inflation' debacle of 2021 - hope the new Governor and MPC are watching closely.
Even shorter duration swaps appear to have pivoted (from persistent falls to a strong upward trend). I'm guessing the RBNZ will be 3 - 6 - 12 months behind in realising what needs to happen by which point it will be again a case of trying to catchup with OCR rises.
8-10% mortgages by the end of 2026? (50% sarcasm, 50% not sarcasm)
It would be good to get some commentary on this from someone who knows what they're talking about... sorry/not sorry.
"It would be good to get some commentary on this from someone who knows what they're talking about... sorry/not sorry"
I don't recall anyone else on this forum warning last week that mortgage rates would most probably start going back up again soon because of these sudden movements of swaps in the wholesale market (other than myself).
But of course I have no idea what I'm talking about - even though I understand how banks have to manage their interest rate risk (having studied it at university).
So if my true and accurate views on this over the past week aren't commentary from somebody who knows what they are talking about - then that is fine - but just don't be surprised if you find yourself confusing what you like to hear with what is not true. e.g. you appear to be a closet property guru (debt speculator) who only likes prices going up and interest rates going down - so if anybody says anything to the contrary you say 'this person has no idea what they are talking about - get me a real expert who confirms my own confirmation bias'.
But yes if anyone else was on here warning about this exact thing happening last week - then find them and listen to them (but don't confuse your dislike with me for what might actually be true!! - otherwise its a bit like Trump Delusion Syndrome - a person can actually be right about something even if you hate them).
But yes if anyone else was on here warning about this exact thing happening last week - then find them and listen to them (but don't confuse your dislike with me for what might actually be true!! - otherwise its a bit like Trump Delusion Syndrome - a person can actually be right about something even if you hate them).
Aotearoans generally don't like contrarian thought. They don't like those who go against the grain and challenge the status quo and the general consensus. Paul Theroux suggested as such when he described the local character as dull, insular, and repressed. It's consistent with those negative national character traits: provincialism, narrow‑mindedness, discomfort with criticism, and cultural cringe.
The term swap curve represents the market's expectations of OCR/BKBM over the duration of the swap. It's not uncommon for cuts to be followed by higher term rates if the guidance is less dovish (or more hawkish) than the market had priced.
Currently, the market is pricing 12.5bp tightening by mid 2026 and 45bp of tightening by the end of 2026. I think that is less likely, but if the RBA start tightening we may get dragged along.
Japan 10 year bond yield about to rise through 2% - first time in about 25 - 30 years - with a strong uptrend.
https://www.cnbc.com/quotes/JP10Y-JP
I sense the easy money, high capital gains, we've experience the last few decades will be something we will dream about (or have nightmares about depending upon how it has impacted you and your family) for the remainder of their lives - wondering how house prices could continue to always go up at 7% (double every 10 years...) while general inflation (you know the wages and rents that pay for the mortgage) on average was only going up at half that - and then claim it to be 'normal' and 'rockstar' - not understanding that this is a mathematical impossibility, something that could never last forever despite the 'property doubles every 10 years' slogans being promoted by vested interests to keep something impossible going just a little bit longer.
Power to you, you have been calling this possibility I_O
rising interest rates going to hammer the "face value" of property... at current yields That's Price for "shifty" and "weevil"
Yes, the Yen carry trade is starting to unwind. Another GFC is possible. I think we'll soon see finance companies exposed to the auto finance sector start falling over, and that could well be the trigger that leads to larger banks failing (and not just in the US).
Latest Reserve Bank figures show a third of owner-occupier mortgage money uplifted from new mortgages in October was on floating rates as home owners seemingly bet on further fixed rate cuts that might not come.
Strange thing to do when a 6 month or one year fixed rate is much more attractive while they're busy speculating.
On Team Albo bailing out Arnotts (owned by private equity behemoth KKR), it turns out that Scomo had $1.5 billion manufacturing handouts, including $700,000 gift for the world’s biggest brewer, Anheuser-Busch InBev.
Australia is overflowing, so to speak, with boutique breweries. The Independent Brewers Association has no less than 524 members and then there are the big boys on top of that.
There are so many breweries making so many more different beers that an old codger can become confused and nostalgic for the good old days of only having to decide between Tooheys and Reschs, VB or MB.
Making beer would therefore appear to be a very competitive business, a healthy industry, a feisty one, you could even say it was hopping.
So what need could there possibly be for the federal government to hand out taxpayers’ funds to a couple of lucky breweries, giving them an advantage over their competition?
https://www.thenewdaily.com.au/finance/finance-news/2020/12/24/governme…
Nice little deep dive explanation of tulip mania (bubbles) and the ol' rat poison. Key takeaways:
- Economic devastation, mass bankruptcies, destroyed fortunes didn't actually happen in the 1600 tulip bubble.
- "In years of digging through notarial records, court cases, wills and account books, only about 350 people were involved in tulip trading in the 1630s, and they were overwhelmingly wealthy merchants and skilled artisans, exactly the sort of people you’d expect to speculate in luxury goods. No evidence of peasants or chimney sweeps risking their livelihoods."
Tulipmania was a vivid and somewhat embarrassing episode that became a moral fable. And that fable has been weaponized ever since by people who want to dismiss any asset they simply don’t understand.
https://www.jameslavish.com/p/the-truth-about-tulip-mania-and-bitcoin
1929 is a better example of greed and stupidity, 1987 was recent and many watched friends and family suffer at the hands of greed.
NZ Property 2021 is shaping up to be another great example
NZ Property 2021 is shaping up to be another great example
That's more palatable to 'NZ Property 1995-2021' - which would trigger howls of protest.
on a consumption basis shows total consumption-based emissions were 58,301 kilotonnes - so about the same as our annual carbon sequestration from CaCO3 deposition. There are just not enough of us to move the dial -even on sea shell basis.
Somewhere out there is an Asteroid with our name on it, we are all short to the world...
The BIS reckons the combination of gold and share prices soaring in unison is a phenomenon not seen in at least half a century and raises questions of a potential bubble in both.
You couldn't make this proverbial up.
Mind you as an early investor in IREN, the following is important, even though the BIS is late to the party:
Shin said the profits being made by the AI firms - now spending enormous amounts on data centers - was an important difference between now and the "dotcom bubble" of the early 2000s when firms weren't making money.
The "fundamental question", however, is whether those expenditures will be seen as being justified in the long run, Shin said, adding that the other key determinant for markets will be how the global economy holds up next year.
https://www.reuters.com/business/finance/global-markets-bis-pix-2025-12…
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.