Here's our summary of key economic events over the weekend that affect New Zealand with news senior Chinese officials are openly talking about stagflation risks.
A senior adviser to the Chinese central bank said at an online forum it is "very likely" that their economy will be in stagflation if producer prices stay high while demand stays weak, and they are alert to existing risks to their economy being "released too early".
Meanwhile, Alibaba shares have slumped by more than -11% after the online retail giant warned of a slowdown in consumer spending. But it is still posting double-digit growth year-on-year of +10% in its quarterly results. The company also said it expects its annual revenue to grow by between 20% and 23%, but that is lower than analysts' forecasts.
And China’s fiscal revenue fell in October for the second straight month as their economic recovery slows, but fiscal spending returned to growth. In particular, the government’s revenue from land sales slid for the fourth consecutive month.
Meanwhile, the IMF is noting that "downside risks are accumulating" in China as its economy slows.
That doesn't seem to be putting off investors however. Inbound FDI is rising, even if it is off a pandemic-affected base which makes it look better that it otherwise is.
Somewhat related to China, the Global Fishing Index has rated most countries on their work to control wild fishing stocks, and it paints a grim picture. New Zealand ranks a "D" out of an A to F grading system, but only six of 142 countries were graded a "C", none better than that.
In the US, we should note that the Biden Administration is about to decide whether to reappoint Jay Powell as head of the US Fed, or switch to one of his deputies Lael Brainard. There is a lot of lobbying underway at present and a decision is promised in the coming week, possibly today. Brainard is viewed as more dovish than Powell, and the financial markets will price that in if she is chosen.
The global supply-chain issues seem to be easing. Not only are key freight rates retreating (slowly) on shipments out of China, but the backlog of ships waiting to unload at key US West Coast ports has halved. And Administration efforts to clear these ports seem to be working, even if there are a few rough edges. Efforts to recycle empty containers with sweeper ship voyages are helping too. The holiday season rush will naturally ease as well, so the worst may be behind us. But the effective closure of Vancouver is a complication, and holiday shopping miscues will still probably happen. These North American resolutions will quickly ease pressures elsewhere in the global chain.
In the US Congress, the House has approved a broad US$2.1 tln social support and climate measure that would, among other things, 'invest' US$500 bln in climate measures, and raise healthcare and childcare support. It faces a difficult path through Senate approval.
Canada's retail sales fell in September from August, but not by as much as was expected. Car sales were the softest category, but that might be because of supply-chain restrictions. Analysts think overall retail sales recovered in October.
Tin, which is used in photovoltaic installations, electric vehicles, and electronics, has hit a new all-time high at US$39,750/tonne on the LME. Stocks of the key commodity are very low. Other commodities that will be key to adapting to climate change, like copper and lithium, are also at or near record highs. There is a 'gold rush' on among miners for these and other rare earth minerals.
But not all miners face positive futures, especially those for fossil fuels. Australia's coal industry is facing a challenge that is undermining its customer base and one that was thought to provide solid demand for decades. The Asian Development Bank (ADB), lender HSBC and the philanthropic foundations of Amazon founder Jeff Bezos and the late John D. Rockefeller, as a group, is offering substantial inducements to governments in south-east Asia to shut their relatively young coal-fired plants and replace them with low-emission alternatives. Coal customers in the Philippines, Vietnam, Indonesia and Pakistan are lining up to be part of the plan.
And staying in Australia, lower auction clearance rates in Sydney and Melbourne at the weekend point to a softening of the housing market amid unrealistic vendor expectations.
In Australia Delta cases in Victoria have risen to 1275 cases reported there yesterday. There are now 9,632 active cases in the state and there were another 4 deaths yesterday. In NSW there were another 176 new community cases reported yesterday, another drop, with 2,732 active locally acquired cases, and they had two deaths yesterday. Queensland is reporting zero new cases again. The ACT has 16 new cases. Overall in Australia, just over 85% of eligible Aussies are fully vaccinated, plus 7% have now had one shot so far.
The UST 10yr yield opens today at 1.55% and up +1 bp since this time Saturday. The US 2-10 rate curve starts today marginally flatter at +104 bps. And their 1-5 curve is little-changed at +107 bps, while their 3m-10 year curve is not much changed at +143 bps as short rates rise. The Australian Govt ten year benchmark rate is +1 bp firmer at 1.78%. The China Govt ten year bond is still unchanged at 2.94%. The New Zealand Govt ten year is also unchanged at 2.59%.
The price of gold will start today marginally softer by -US$1 to US$1845/oz.
And oil prices are -50 USc lower at just over US$75.50/bbl in the US, while the international Brent price is still just under US$78/bbl.
The Kiwi dollar opens today softer at just under 69.9 USc. Against the Australian dollar we are firmish at just under 96.8 AUc. Against the euro we are at 62.1 euro cents, also a little firmer. That means our TWI-5 starts today at 74.6 and very similar to where we left it on Saturday.
We should note that if the RBNZ raises the OCR this week by more than +25 bps, there is widespread speculation that parity with the AUD could be tested in currency markets. Most analysts however are picking a +25 bps hike.
The bitcoin price is +2.4% firmer since this time Saturday, up to US$59,750. Volatility over the past 24 hours has been modest at just over +/-1.9%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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70 Comments
A deeper dive into the rocketing price of Sn. New prospects at Mt Lindsay, just a few clicks from MetalX's Renison operations in Tassie.
Li, Cu, W, Ni, Sn, Pb, Ag, Au, U.....who needs Coal when these abound.
Oh, that's right, coal generates about 2/3 of all electricity in the Lucky Country.
Take it such resources are freely tappable in Tasmania. Not lying secluded and in inaccessible under national parks and similar. Mind you national parks can be something else again can’t they. For instance a common question by visitors in the USA is - why did we always have these big battles in national parks.
Who needs energy when you've got money?
And hey, we're about to be told later this week- peer reviews and everything - that money won't be affected by Climate either (mind you, the peer reviews said the emperor was clothed).
So turn the light out and the heaters off, leave the cars at home, and let's make some more.....
oh.....
"And staying in Australia, lower auction clearance rates in Sydney and Melbourne at the weekend point to a softening of the housing market amid unrealistic vendor expectations."
Anyone else notice a substantial uplift in listings on this side of the Tasman in recent weeks?
Just an observation from the property management side of the market in Auckland. Landlords are pushing through rent raises (they all want market rent as per Tenancy Services website). Tenants are leaving and the vacant property is becoming very difficult to re-rent, often having to drop the rent back to the previous level. Seems plenty of supply and the tenants are very fussy with regards quality.
If you are a Landlord in Auckland, have some heart and wait until lockdowns are over before even considering rent rises.
Factor in, that if a good tenant leaves due to rent rise you will likely have the property empty for 6 weeks (probably 2 years of increased rent to recoup this.)
Edit: Forgot to say. The tenants aren't leaving because the property is overpriced, they are leaving because they cannot afford the rent increase.
No it is not. The tenants accept that the increased rent is reasonable for the area (and the lodged bonds show this), just not for their budget. I wouldn't be surprised if we see rents drop back in coming months due to this resistance, this wasn't happening a few months back.
I never claimed they cannot be re-let at the increased price, you said that.
Bonds lodged is data that is 3 months old.
Getting that price in the current market is getting difficult (there is always a balance between price and vacancy period).
The point of the post was that 6 weeks vacancy negates any increase in rent.
I'm in Auckland and seeing new for sale signs every day on my walk. Places that haven't sold in 10+ years. Also seeing many new terraced housing developments popping up everywhere. My neighbours are also selling up and leaving Auckland. Seems to be a definite increase in listings and new houses, as well as people leaving Auckland. Also, houses that are for sale have been for sale for a while, not selling as quick as 6 months ago. Again, just observations from my daily walk.
We are planning to sell our place in North Shore early next year. The kids have left home and we will downsize. I'm rather surprised by how few 'for sale' signs are on display in my area of North Shore. Of course the new terraced houses are multiple properties with a single advert. Am I confused or are properties not getting signs erected or are they simply selling faster?
We should note that if the RBNZ raises the OCR this week by more than +25 bps, there is widespread speculation that parity with the AUD could be tested in currency markets. Most analysts however are picking a +25 bps hike.
Should the word "however" be there or should the rates cited be different?
I was quite impressed by this segment published in The Lancet which asked leaders to kerb the rhetoric on the vaccine and cease stigmatising the unvaccinated. It seems like ever politician want to be seen to be 'doing something' but what many are doing is fundamentally unhelpful and divisive.
The other night I had a chat with someone who I've been friends with for many years, he and his family are unvaccinated, and asked him why? He said "I'm going to get vaccinated when I can get the vaccine I want and trust." (I don't recall which he named but I believe it's a conventional rather than RNA vaccine) Imagine that, we could actually listen to people and find amicable solutions with positive outcomes for everybody, just like a country with a real consultative government!
squishy,
Does your friend have a good working knowledge of vaccines? Does he really know what goes into them? he and his family will presumably have taken other vaccines; did he know what was in them?
I suspect not and that this is just a convenient cover for being unvaccinated.
Doesn't really matter what the reason is. When people ask me why I'm not vaxxed I don't even need a reason. Its your choice I don't need to explain anything. People need to move on. The vaxxed that are most pissed off are the ones that feel they have been forced to take it so clearly there is a "Perceived Risk" with taking the currently available vax. By the time Covid hits a peak here your going to need a booster. Personally looking at the stats and my health condition and personal circumstances, I can wait for something better to be developed.
Fair enough..just hope you dont pick up Covid before then Carlos?
Unvaccinated patients dominate COVID deaths and ICU - Less than 2% of people admitted to intensive care in New South Wales in the first 11 weeks of the recent outbreak were fully vaccinated, the latest NSW Health weekly surveillance report shows.
Everything in life is about risk management. Like I have said before you have to do your own personal risk assessment and its not based on a single shred of anything you will find online with the exception of the ages of people most affected. If I was over the age of 65 then the tables turn pretty quickly and if I was 75 then sure I would get the Vax.
I reluctantly eventually got the jab and have had extreme joint pain and fatigue ever since.
Anyway no one needs a reason to have or not have the jab. It's a personal choice.
People are being asked to inject something in their body in return for retaining their freedom. It's quite different to getting other vaccines.
Regardless of whether it's safe or not (after much research I believe it is and also the vax developers tested it on their own kids) the witch hunt of the unvaccinated needs to stop.
I think it's common knowledge now that most hospital admissions for covid haven't had the jab. My mate at a GC hospital on the covid ward confirms the same thing. But still, it is not helpful to harass people to get it.
i agree with you on the choice of vaccine, we have 4 approved in NZ but the DHB's would only administer one (now two), why have they not allowed GP's to administer the other choices has been beyond belief. Outside of cities they are the people most qualified to talk to their local clients and more likely to get better uptake of vaccines, the reason i say that is now in auckland GPs are mostly hired by a corp and most of the time you dont see the same doctor every visit
i hope we dont get to the situation that is happening now in europe where countries are now making it compulsory.
in saying all that i am double jabbed, as i believe in the science behind it and read a lot of the papers and have also invested in the companies , but each to there own choice we must all live and die by our own choices
Hi Carlos
I am interested in understanding your perspective. I interpret your comments that you are not against all vaccinations rather you have conducted a risk assessment of the Pandemic and vaccines available and decided the best thing for you to do right now is to not get vaccinated.
I don't know your personal circumstances so won't judge that decision but I am interested in what recommendations you would make to public health measures the government should take? At one end of the scale there is compulsory vaccinations for everyone through to letting everyone make their own choice.
When I took my daughter for her childhood vaccines, guess what? I had a choice to make on her behalf.
That's all those who question whatever information is readily available ask for - the same courtesy - Choice.
(NB: Those of us who had relatives affected by the Thalidomide mess (in my case, an older cousin, who died at 15) and who are now in 'the vulnerable' age group might be twice-shy?)
Thanks Robbo. Coming to a team of $55 million headline any time now.
"But the loss has already happened, it is just a matter of how it ends up being recorded/realised. $5.7 billion dollars of it. The Crown could probably have funded quite a few ICU beds for quite a few years with that sort of money…..but it has gone."
Yep just imagine the new hospitals and the increased number of experienced medical staff and a 1000 ventilators that would have brought online for probably the next 20 years, instead we have a health care system in worse shape than before Covid. But like the government have said on record, they had no plan B.
that is my major gripe at the moment, the amount of money we are still wasting on MIQ for people coming to NZ, that should have been pivoted to the health sector and could have paid for a new hospital in auckland south that could handle Covid positive patients for now and in the future become a normal hospital, they have plenty of land at the superclinic so it was just building a new facility and staffing it.
why are we not just testing on arrival with antigen and PCR as you get off the plane, if clear sent home, if PCR comes back positive you have to self isolate or into MIQ
then you have to do a follow up PCR after 5-9 days or a 20k fine
before 911 we never did screening at the airport and overseas now this has become normal practice in places so again why are we so slow to adapt and throwing money at a out of use by date system that needs changing to the new world system
"Breakfast briefing; China braces for stagflation"
Can rest of world specially economies that depends on China be far away.
If NZ economy dependent on China, than is worrysome.
Have been commenting often, biggest concern is that in NZ everything is in one basket - Housing and now have no choice but to keep supporting the bubble to avoid disaster.
RBNZ has opportunity to realise their mistake (though may not accept it publicly) and be proactive as may get short term reaction from the market but will be good for long term as even FED now is forced to bend and act.
https://thekaka.substack.com/p/dawn-chorus-act-bids-for-nationals?token…
Someone has to raise voice against both Labour and national who are determine to turn NZ into ghetto houses. Doing to support supply and help FHB but if any sensible will look deep into will realise that though supply will increase but is this the future that we want, tiny multi houses in narrow lane, modern new slum and will it help FHB as only shift will be that earlier could buy 600sqmt old 3/4 bedroom house for 1.1 million and than will be able to buy a tiny house of 70sqmt in 80sqmt section for a million - Is this the defination of affordability by likes of Jacinda Arden ( not to forget that 1.1 million house will be 2 million as cost of land will double or triple)
Instead government should plan new suburbs / township with promise to provide I infrastructure and offer discounted section......but narrow thinking politicians are curse to NZ.
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When NZ gets to 90% vaccination the media MiGHT question why countries with similar levels have v varying infection rates.
Also might occasionally mention that we have 5.2m deaths out of 230m cases out of world pop of 7.8billion.
Finally might query why future when it arrives is never as bad as our expert modellers said it was going to be
Even taking into account obesity differences between ethnicities it is plain that age is major risk factor. As Maori and Pasifika do not reach 70+ in same proportion of their pop as Pakeha they are not in fact more vulnerable to death as media make out. Of the 39 deaths do we ever get told how many were over 70 and also ethnic breakdown? No
You never going to get a breakdown of your risk vs age in NZ as this would go against the government narrative that everyone should get the vaxx. With over 5million deaths worldwide you would think some pretty accurate stats available by now but Labour will keep a lid on that. Cannot have people thinking for themselves, that's pretty dangerous.
The history of NZ after Europeans arrived was one of killer epidemics. Almost all killed Māori & Pacifica more rapidly than those of European and Asian origin. The list of major epidemics and the range of diseases is long. In most ways there is very little genetic difference between peoples - for example strength, speed, brains, introversion, blood group, etc very little distinction by ethnicity and for obvious reasons any differences in these categories are not usually debated. However there are differences that affect medical conditions: skin cancer, diabetes, heart attacks and these differences remain even when adjusted for cultural differences. Our health system already accepts that.
Measles, hooping cough, smallpox, cholera wiped out Māori faster than Pakeha. It has left almost all Maori with some European DNA - just sufficient for past ancestors to survive epidemics. Can we be sure Māori will not be more susceptible to Covid-19? While doubt remains we should give priority to Māori for Covid prevention and treatment.
Deaths are such a small number that confidentiality is a problem to release the data (this is a good problem). Plenty of hospitalisation stats are available here: COVID-19: Case demographics | Ministry of Health NZ
The cases by age group table shows that there are more 20-29 hospitalised (70) than 70+ (29)
The cases by ethnicity data shows that Māori are under-represented in hospitalisations (31%) relative to total cases (43%). Pacific people are over-represented (39% vs 29%)
The graph by vaccination status is also interesting. Ideally, it should be adjusted to per 1000 population as just using the raw numbers makes the vaccinated number look high but they actually outnumber the non-vaccinated by 3 to 1. But it does show the likelihood of hospitalisation of the non-vaccinated is far higher than the vaccinated.
Nice stats indeed.
But on the hospitalisaiton stats, you need to look at the portion out of the total in that age range that got it.
For 20-29 that is ~5% while 60+ is ~15%.
40+ is def where it starts to hit harder.
0-9 2%
10-19 1%
20-29 5%
30-39 6%
40-49 9%
50-59 12%
60-69 11%
70+ 21%
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