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.
FEELING MORE CHIPPER
Challenging the trend, the local service sector has come up trumps in October, above its long-run average and rising on the back of strong new order levels. This rising expansion compliments the better-than-expected factory data for October out late last week (although that is still below its long-run average). Of note, the strongest expansions are in Wellington and Canterbury.
CUSTOMERS WON'T PAY FOR LOCAL PROCESSING
Export demand for logs in November is rising along with prices, but prices are still below their 2-year average. And export demand for sawn timber remains weak. Domestic demand remains stable.
KIWIS LEAVE, MORE MIGRANTS ARRIVE
More New Zealanders are leaving the country and more non-NZ citizens are arriving. Population growth from migration is a two way street, with big increases in both long term arrivals and departures.
EQUITIES GLOOM
The positivity in the services data isn't being shared with equity markets today. Both the NZX50 (-0.5%) and the ASX200 (-0.6%) are down in early trading, and the opening bells in Tokyo, Shanghai and Hong Kong are flat.
TEAMING WITH SCHEMERS
Buy now, pay later funder Laybuy has announced a partnership with over a dozen major retail brands, which will see the business add over 3,000 new retail locations across New Zealand, Australia and the UK. This includes a tie-up with the retail investments of Sydney private equity hotshots Alceon Group.
CHECKUP GIVES A TICK TO AUDITORS
In a new update of its rolling review of auditors and their work standards, the FMA has found that audit quality has broadly improved again but auditors continue to apply standards inconsistently. These annual reviews are part of a three-year monitoring cycle of licensed auditors. Each of the audit firms reviewed for this report have been reviewed previously and the FMA found most auditors had made improvements.
HAVE WE BEEN UNDERSELLING OUR PERFORMANCE?
Close to Christmas eve, we will get the updated Q3 GDP growth data, and BNZ is pointing out that some data revisions by Statistics NZ indicate we could be in for a positive surprise, even if it is only a one-off. It seems that input costs have been over-reported somewhat and with the new Census updates they may get scaled back a little. The result will be stronger growth and stronger productivity. At least, that is the expectation. Most of the positive revisions will be for 2017/18 however (and credited to the previous Government).
EVEN FIERCER
Hong Kong riot police threatened to use lethal force against students as they attempted to storm a local university campus just before dawn on Monday, following the most violent night in five months of unrest in the city. The PLA has "counter-terrorism" units in the City now.
MURRAY HORN NAMED CHAIRMAN OF CHINA CONSTRUCTION BANK NZ
China Construction Bank (New Zealand) Ltd has named Murray Horn as its new chairman replacing Jenny Shipley. John Shewan has been acting chairman since Shipley stepped down in March. Horn is a former Secretary to the Treasury, and ex-CEO of ANZ Banking Group's NZ operations. Horn has also chaired the Risk Committee on the board of China Construction Bank Corporation (Beijing) for six years.
LOCAL SWAP RATES HOLD
Wholesale swap rates are marginally softer today, down -1 bps across all durations. The 90-day bank bill rate is down another -2 bps at 1.22%. Australian swap rates are down about -2 bps across the curve. The Aussie Govt 10yr is unchanged at 1.16%. The China Govt 10yr is down -2 bps at 3.25%. The NZ Govt 10 yr yield is unchanged at 1.41%. The UST 10yr yield is down -1 bp from this time on Friday, drifting down to 1.83%.
NZ DOLLAR HOLDING
The Kiwi dollar has held on to its higher level and is currently just a fraction under 64 USc. Against the Aussie we are at 93.9 AUc. Against the euro we are at 57.9 euro cents. That means the TWI-5 is holding at 69.2.
BITCOIN FLAT
Bitcoin is now at US$8,492 and very similar to where it opened this morning. The bitcoin price is charted in the currency set below.
This chart is animated here.
Daily exchange rates
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17 Comments
Close to Christmas eve, we will get the updated Q3 GDP growth data, and BNZ is pointing out that some data revisions by Statistics NZ indicate we could be in for a positive surprise, even if it is only a one-off.
Thankfully it's positive:
For a decade to 2012 Japanese nominal growth contracted by 3% & there was deflation of 4%, so economists were happy since they added up these two wrongs to get a right of positive real GDP growth of 1%. "Real GDP" is hypothetical, quite unreal. Nominal growth is the real 'real'. Link
I wonder will they make their money back on this AKL construction project? NZ Herald: Pacifica tower developer has A$100m+ of Australian assets frozen https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
Hong Kong riot police threatened to use lethal force against students as they attempted to storm a local university campus just before dawn on Monday, following the most violent night in five months of unrest in the city.
Paul Keating lambasts Australia's security agencies and 'pious' media for anti-China rhetoric
“The Australian media has been recreant in its duty to the public in failing to present a balanced picture of the rise and legitimacy and importance of China, preferring instead to traffic in side plays dressed up with the cosmetics of sedition and risk.”
Threatened to? They seem to have been using lethal force for a while now, with students shouting out along the lines of "My name is X and I have no intention of committing suicide!" to avoid being suicided. And they certainly seem to have been using live ammunition for a while.
Involuntarily underwritten by retirees: Hedge Fund: It Is Astonishing That MSCI And Bloomberg/Barclays Index Force Global Pensioners To Fund China's Communist Party
"The result will be stronger growth and stronger productivity. At least, that is the expectation. Most of the positive revisions will be for 2017/18"
Well, someones not doing their job properly! That's a waste of good statistics. Don't they know that 'positive' revisions get applied to current data? Only the bad revisions should get hidden back in the past ( sarc/off)
Also, San Francisco Federal Reserve Bank President Mary Daly has a unique take on the looming low interest, low inflation environment in the US economy, citing this as a 'lucky' setting for the country.
She believes the Fed is under no pressure to normalise its monetary stance, and can use low inflation as an opportunity to improve labour participation and economic outcomes among those demographics left behind during the recent job boom.
Interesting times!
I wonder if anti-China propaganda has put us beyond the point of return for the American public, whereby even a change of leadership may be unable to fully return US sentiment pre-tradewar. Whoever succeeds Trump may have a hard time backtracking and ceding to ‘evil Chinese demands’.
Also, San Francisco Federal Reserve Bank President Mary Daly has a unique take on the looming low interest, low inflation environment in the US economy, citing this as a 'lucky' setting for the country.
Hmmmm...
What Friedman told his stunned audience in 1967 was that the central bank cannot peg either interest rates or unemployment beyond the short run, and that what had occurred between the Great Depression and that time was the pendulum had swung too far in the other direction. If the central bank was thought useless or at best secondary in 1930, by 1960 it had been revived as a powerful agent to try and control those main factors.
That’s the set of assumptions we recognize today. But they still proceed from a faulty basis. He said:
“Let the Fed set out to keep interest rates down. How will it try to do so? By buying securities. This raises their prices and lowers their yields. In the process, it also increases the quantity of reserves available to banks, hence the amount of bank credit, and, ultimately the total quantity of money. That is why central bankers in particular, and the financial community more broadly, generally believe that an increase in the quantity of money tends to lower interest rates.”
But all experience shows this is not so. As Friedman detailed, that’s only the beginning of the process rather than its end. There are feedback effects, very positive ones that in the end leave interest rates moving higher; to the extent that the initial policy actually does stimulate investment and spending, it will also mean rising incomes and liquidity preferences, maybe even the price level (inflation), all of which should combine to pressure interest rates into going only upward.
The result of successful stimulus is higher rates. As back then, today everyone including central bankers seem unaware of the multistage processing. Or they are insidiously disingenuous; they know higher interest rates would confirm their success with monetary policies but in their absence keep calling low interest rates “stimulus” so as to stave off questions about their performance. Link
Yes, a fresh face doesn't always work out & any revisions in past GDP will be rightly credited to a couple of guys, one whom gets a regular beating up on this site - John Key & Bill English. Pale male & stale they may be but they took us from the desolation of the GFC & the Christchurch earthquakes to a rock star economy within a handful of years. Not too bad in my book.
Whatever happened to Paul "I got an interest rate call right , once, when no one else did!) Bloxham? Muzzled, for one reason or another...
https://www.interest.co.nz/opinion/94880/hsbc%E2%80%99s-paul-bloxham-wa…
Just had a weekend in Christchurch - most impressed - a very beautiful city. The most interesting and popular site was the endangered black billed seagulls nesting in the CDB nest to the Cathedrill (which is filled with happy pigeons). Hats off to Brownlee and National - they really are forward thinking.
The tide is turning while Wellington types press on.
https://www.google.com/amp/s/amp.economist.com/china/2019/11/14/the-wes…
The PMs department plus Shaw & Co having an existential crisis, or just saving it up.
It's even making Channel 9 news too!
https://youtu.be/BzCqQKnF9Oo
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