Welcome to our first of these daily summaries in 2022. Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report today.
TERM DEPOSIT RATE CHANGES
None here either.
DAIRY PRICES IMPRESS
Dairy prices rose firmly at today's dairy auction. There were up +4.6% in USD terms with solid rises exceeding +5% for WMP, SMP and Butter. The overall level of prices are now +24% higher than a year ago, +30% higher than two years ago. The farm gate milk price looks like it will come in close to $9/kgMS, a record high.
HOUSE PRICES WAVER
The REINZ December House Price Index suggests the housing market may finally be turning - lower.
GOOD RETAIL IN DECEMBER
In actual terms, December retail spending jumped from November to be +4.2% higher than a year ago and +7.8% higher than pre-pandemic December 2019. In seasonally adjusted terms the December levels held at November levels, which is a good result given the strong November data. But analysts like Westpac are concerned 2022 retail looks like it will face squeezed consumers’ purchasing power.
TWO DONE, NINE TO GO (UP FROM FIVE MORE)
ANZ has raised its view of where the OCR will end up in this rising cycle. It had picked a 2.00% top. Now it says it will be a 3.00% top in early 2023. And it thinks the RBNZ will do this hiking even if economic conditions turn weaker than they are now. The key driver will be inflation, which they say the RBNZ has the jump on most other central banks by ending its QE last year and having starting its rises already. The OCR is currently at 0.75%, so ANZ's new call is for another nine more rises of +25 bps each.
'WE DON"T LIKE TO BE RESTRICTED IN WHAT WE LEND'
The Financial Services Federation, "the industry body for responsible non-bank lenders", has written an open letter asking the Government to back off its CCCFA responsible lending requirements. They don't want to take the hit to their business and see a credit crunch being triggered by these new regulations. The say "the changes will not just affect housing lending but lending for essential items like motor vehicles and household appliances." They are framing their objection as one that will hurt consumer access to goods. They are not accepting that the previous loose or non-existent standards were a problem.
LOCAL PANDEMIC UPDATE
In NSW, there were 32,297 new community cases reported yesterday, a small rise, now with 302,453 active locally-acquired cases (and undoubtedly an undercount), and 32 more deaths. There are now 2,863 in hospital there. In Victoria they reported 20,769 more new infections yesterday. There are now 236,177 active cases in that state - and there were 18 more deaths. Queensland is reporting 19,932 new cases and 11 new deaths. In South Australia, new cases have risen to 4,685 yesterday with no more deaths. The ACT has 1601 new cases and 1 death and Tasmania 1185 new cases. Overall in Australia, 74,183 new cases have been reported so far although not all counts are in yet. In New Zealand, there were 56 cases stopped at the border, plus 24 new cases in the community.
GOLD SOFTER
In early Asian trading, gold is at US$1813/oz and down -US$8 from this time yesterday.
EQUITIES RE-PRICE LOWER
Wall Street fell -1.9% on the S&P500 today, led down by tech stocks, especially those that are not yet profitable. Tokyo is down -1.7% in opening trade. Hong Kong, Shanghai -%. The ASX200 is down -0.4% in early afternoon trade. The NZX50 is down -1.3% in later trade today
SWAPS RISE
We don't have today's closing swap rates yet. They are likely to be higher as bonds are dumped worldwide. The 90 day bank bill rate is unchanged at 1.05%. The Australian Govt ten year benchmark bond rate is up +9 bps at 2.00%. The China Govt 10yr is down -5 bps at 2.75%. The New Zealand Govt 10 year bond rate is now at 2.57% and up +3 bps but still below the earlier RBNZ fix for that 10yr rate at 2.58% (unchanged). The US Govt ten year is now at 1.88% and +6 bps higher today, now its highest since November 2019.
NZ DOLLAR UNCHANGED AGAIN
The Kiwi dollar is holding at 67.8 USc and unchanged from this morning and slightly lower than this time yesterday. Against the Aussie we are marginally firmer at 94.3 AUc. Against the euro we are definitely firmer at 59.9 euro cents. That means the TWI-5 is still just over 72.3 and little-changed.
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BITCOIN HOLDS
The bitcoin price is little-changed at US$42,392 and up by just +0.2% from this time yesterday. Volatility over the past 24 hours has been modest at just over +/- 1.6%.
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35 Comments
They are not accepting that the previous loose or non-existent standards were a problem.
Of course they're not. Could you imagine the banks admitting that creating credit to bid up house prices is a 'problem' when you have the privilege to do what they do and with the understanding that the taxpayer is ultimately on the hook if you fk up? The sheeple don't really see it as a problem either because they don't really understand how it works.
Reading the FSF open letter was a good laugh. They believe they should be allowed to just take what borrowers claim are their expenses as fact without verifying them. How about we do the same with income? How about we just go for No-Doc loans like they did in the US? This seems to be their only actual complaint with how the CCCFA has been implemented.
I suspect what we are seeing right now from banks is "Malicious compliance" where they make things as painful as possible (even if its not required by the legislation) just to try and force the government to roll back the changes.
To the best of my knowledge its not an MI5 and/or MI6 stenographer.
I used to live behind the old MI5 building in Mayfair for a number of years - the 24 hour security guards had some interesting tales to tell.
The director general used to stop his chauffeur driven Jaguar in the mews and open the door so he could cuddle my Staffordshire Bull Terrier bitch.
ANZ now forecast that there will be a 3.00% OCR top in early 2023. This is almost in synch with what the current fixed rates markets are showing.
I now personally think that the OCR peak will actually be above that, possibly closer to 4% than 3%, also considering what is happening overseas. Be ready for much higher mortgage rates.
The Financial Services Federation, "the industry body for responsible non-bank lenders", has written an open letter asking the Government to back off its CCCFA responsible lending requirements. They don't want to take the hit to their business and see a credit crunch being triggered by these new regulations
I thought the non bank lenders were saving the day already and were some how not impacted by CCCFA? Isn't that what the head of Squirrel was saying and claiming that they were going to win all the business...
ANZ has raised its view of where the OCR will end up in this rising cycle. It had picked a 2.00% top. Now it says it will be a 3.00% top in early 2023.
Basically, the Chinese strongman warned Western leaders not to count their inflationary/recovery chickens before they hatch. As in 2021, Xi in 2022 warns that not all is aligned right for those things – only beginning with China.
As if to emphasize the message, Ning Jizhe, the Chinese National Bureau of Statistics’ current director, admitted to reporters the state of the diseased cat. In Ning’s press conference announcing the latest batch of economic data from the world’s second largest economy, the Big Three (IP, FAI, and ugly retail sales) to go along with Q4 2021 GDP, the typical Communist platitudes which he dispatched with the required emphasis suddenly dissipated in his summary in favor of Xi-like clarity:
At the same time, we must be soberly aware that the current downward pressure on my country’s economy is still relatively large…
You can only spin so much before such context of a wingless and ailing tiger cuts straight through such semantic reflexiveness. Link
The say "the changes will not just affect housing lending but lending for essential items like motor vehicles and household appliances." They are framing their objection as one that will hurt consumer access to goods. They are not accepting that the previous loose or non-existent standards were a problem.
FSF is right. The Labour government hasn't proved that the current system is a generating wide spread problem in the consumer credit space. Kris Faafoi could had updated the bill to restrict it to his own community before passing it if he sees that as a problem.
As expected and proven by history, socialist ideologies eventually run any country's economy into the ground.
What's next to dig deeper? How about everyone pay exactly the same amount of tax?
Its a signature example of an interest rate repression.regime at work. They (US Treasury) also auctioned a risk free discount 4 week Treasury Bill last week where bidders accepted 0.0% return in a scramble to secure pristine asset collateral
56 new cases of Covid at the border today. What happened to the requirement to have a negative test result before getting on a plane??? I can understand a few developing Omicron variant after their pre-departure test but these numbers are getting beyond belief. Bloomfield, please explain!
“In NSW, there were 32,297 new community cases reported yesterday, a small rise, now with 302,453 active locally-acquired cases (and undoubtedly an undercount), and 32 more deaths.”
The situation in Victoria & NSW should be a big warning to NZ.
The media in NZ has not held the government to account for a lack of prepardness to get our hospital capacity up to Australian standards.
Why isn’t the number of spare hospital beds at each hospital published weekly?
Why isn’t the increase in capacity of hospital beds published weekly?
Similarly why isn’t the number MIQ total spare beds & the increase in capacity of MIQ beds published weekly?
If the total number of spare beds in hospitals & MIQ are published regularly, as well as the increases in capacity, NZ can judge how effective this government is in preparing for the inevitable onslaught of Omicron over the next 12 months.
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