Dairy prices rise; US housing starts up; Canada rail on strike; China steel output falls; RBA was close to cutting; OECD growth dims; UST 10yr yield at 1.78%; oil down and gold unchanged; NZ$1 = 64.3 USc; TWI-5 = 69.4

Dairy prices rise; US housing starts up; Canada rail on strike; China steel output falls; RBA was close to cutting; OECD growth dims; UST 10yr yield at 1.78%; oil down and gold unchanged; NZ$1 = 64.3 USc; TWI-5 = 69.4

Here's our summary of key events overnight that affect New Zealand, with news that steel output in China is retrenching and falling away fast now.

But first up today, we had another dairy auction overnight and another positive one. Prices were up for the fifth consecutive time, this time recording a +1.7% gain in US dollars and +0.9% in New Zealand dollars. Both WMP and SMP posted out-sized gains and in fact SMP prices breached US$3000/tonne for the first time since August 2014 and WMP prices are their highest since late 2016. The cumulative rise for all of 2019 is now +22% in US dollars and +30% in New Zealand dollars. These gains underpin the firming payout forecasts and there is probably upside if they continue as many analysts expect.

In the US their expected October rebound in new housing starts occurred, but they were not as strong as expected. Building permit levels however did come in as expected.

In Canada, workers at their largest rail network are on strike which will affect Canadian economic statistics. The network has recently announced it is cutting jobs as it deals with a weakening North American economy that has eroded demand.

In China, crude steel output fell -4.7% in October from the previous month to 2.6 mln tonnes per day, decelerating from a -2% decline in September.

And Beijing is reacting with fury that the top Hong Kong court ruled the local mask ban contravenes Hong Kong's Basic Law. Beijing will reject anything that prevents their mass surveillance programs. China seems ready to emasculate Hong Kong's legal framework.

In Hong Kong, HSBC said it will close a bank account that is being used to raise funds to support protest-related activities in the city. The account has been used to pay legal and medical fees for protesters.

In Australia, the minutes from the November 5 RBA rate review meeting show it was a lot closer to cutting than markets predicted, but opted for a "wait and assess" approach. The release of their thinking has hit Aussie bond yields, and New Zealand yields have suffered some collateral declines too.

And the Aussie Prime Minister, who once scorned the value of renewable energy projects in South Australia, has become a convert, adding Federal funds to increase the size of the Tesla battery there by at least +50% to become an 150 megawatt facility.

Just how positive the economic situation in New Zealand is, is again illustrated by the OECD 2019 growth update. Year-on-year GDP growth for the OECD area was stable at +1.6% in the third quarter of 2019, and that was only held up by the US at +2.0%. New Zealand however is expected to record +2.4%.

The UST 10yr yield is down another -3 bps today and now at 1.78% and softening. Their 2-10 curve is positive but tightening at +19 bps. Their 1-5 curve is also tighter at +8 bps. Their 3m-10yr curve is also less positive +22 bps. The Aussie Govt 10yr is down -3 bps at 1.13%. The China Govt 10yr is now at 3.22% and a -1 bp overnight dip. The NZ Govt 10 yr is now at 1.39%, down -2 bps.

Gold is unchanged at US$1,473/oz.

US oil prices are sharply lower today to just over US$55.50/bbl. The Brent benchmark is just over US$61/bbl. Both represent further falls of more than -US$1/bbl.

The Kiwi dollar is firm this morning at 64.3 USc. On the cross rates we are now just over 94.1 AUc. Against the euro we are over 58 euro cents. That pushes the TWI-5 up to just on 69.4.

Bitcoin is softer this morning at US$8,094 and an overnight drop of -3.7%. These are starting to accumulate; since the beginning of the month the bitcoin price has fallen -11%. The bitcoin rate is charted in the exchange rate set below.

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I reckon we ought to roll out the welcome mat to Hong Kong citizens who wish to flee the oppressive PRC regime ...

... message to Ian Lees-Galloway . . fewer druggies , thugs and liars ... more HK refugees , please....


The refugee South African farmers are first in that queue....

I agree, but really great way to maintain relationship with China! They won't like it because from their perspective we will be sheltering subversives, and will continue to see them as a threat. What was the line form that movie? "Anyone who offends China, no matter how remote, must be exterminated" Leaks from China indicate that this is pretty close to the truth. So if we want to provide a home for refugees from HK we need to have our diplomatic skills polished, and a better military than we have now!

Kyle Bass with a further perspective


Adding to the thoughts that with all best intentions the love is just not being shared.
Rather the polar opposite.

Trump on China. From last night.


I read a Frederick Pohl book a couple weeks back where the organ donation scheme is remarkably similar to what is happening in China now. I love reading some of the top fiction writers, they have some ability to predict the future if you can spot the lessons and warnings. Great foresight you could say. I think to be a great writer you have to be a great observer and analyist. But around these pages they are just called Malthusians.

HK, universities and press taking hits.

Burning the joint down, with people inside - has a lot of support on weechat.


Four masked intruders dressed in black set fire to the printing press of the Hong Kong edition of The Epoch Times in the early hours of Nov. 19, marking the fourth attack on the facility since its opening more than a decade ago. The attack is believed to be the latest instance of efforts by the Chinese Communist Party (CCP) to silence The Epoch Times.

You’ll be on that list now!

You are overthinking. The bear hero here is Winnie the Pooh's friends in disguise. China will be glad if all HK protesters leave and all good law-biding citizens stay, all the money making business too.

...and a better military than we have now!
Whoa - steady on, now murray86. We are alone in the South Pacific and are in no position to agitate against the combined Pacific fleets of Russia and China, nor should we wish to.

Take note of who are the war mongers: The US and Britain face no existential threat. So why do their wars go on?

Switzerland has no wars and is a small country with no alliances. It has a significant expenditure on its armed forces - not enough to defeat Russia/Germany/France but enough to make them think. We ought to do the same if not to defend our land at least to defend our chunk of ocean.

Switzerland is not a nuclear armed or seafaring nation which can project stand off power over long distances.

Drone technology

I am ex-military and a part of me argues that we need a better military. The current situation as a result of political tinkering, and poor military leadership, is very bad, but what I said is taken out of context. A strong military does not mean 'war mongering", rather a means to be self determining, at one level at least. Switzerland is a case in point; they have a very strong military, and significant natural defences, but to maintain this they also have a strong economy. This last is what we are missing.

Our comparatively weak economy means we cannot be ruggedly independent. We have to be cognisant of how other countries will react to our actions, and words. China doesn't care what the world thinks. It is currently challenging the world by acting to oppress a group calling for democracy. Something they were supposedly guaranteed when the UK handed HK back to China.

The problem with the human race is that we put our culture ahead of our humanity. If the major forces in the world put human rights first we would likely be OK. But power, privilege and culture supersede our humanity. People (and political leaders are just people) happily kill others directly and indirectly for their own power and privilege. All endeavours to change this basic fact are sad failures.

China doesn't care what the world thinks. It is currently challenging the world by acting to oppress a group calling for democracy. Something they were supposedly guaranteed when the UK handed HK back to China..

A charge that is easily leveled at others and condoned by US acceptance under their rules based international order.

How about just no to all of them?

There just seems to be an endless stream of bad data coming out of Australia. Of course some random company is claiming Sydney and Melbourne house prices will be up by 15-20% next year. They seem to have lost a grip on reality with new car sales falling a lot faster than in NZ.

... the major car manufacturers and sales outlets are on borrowed time ... they'll be crushed when Transport as a Service is rolled out ....

You mean Uber?

Uber with autonomous cars. Except if the marginal cost of car based transport decreases significantly, expect congestion to rise to ridiculous levels and eat away the advantages.

Then where would some of our highly skilled immigrants work? In the jobs we let them in to do?!

Can never have enough retail managers!

... no .. not Uber . . TaaS will decimate them too ...

Yes would appear that the corelogic figures are very fishy to say the least. In The Interest of the People youtube channel is investigating and well worth a view.


Just for the record, Aurora Energy will be scapegoated, but the real reason for the infrastructure deferral, was the need to 'fund' the Dunedin Stadium.

100% correct! But the deferrals on maintenance go back decades to previous CEOs who were told to return dividends to the council so that rates could be kept artificially low as well. I'd be wanting to know how many of the previous CEOs over the past, say, 30 or 40 years had bonuses that were set based on how much $$ were returned to the DCC as well.

DCC has used its council owned companies as slush funds to be easily raided at will (especially for the biggest white elephant, a stadium to play a few rugby games at a World Cup - has it's major maintenance upgrades been budgeted for?). Now the chickens have come home to roost and instead of managed infrastructure upgrades over decades as required, it's the holy sh*t time of everything needs fixing/replacing all at once. However, let's not talk about the stormwater and drinking water pipes throughout swathes of the city that need upgrading at the same time....can't scare the sheeples too much; but that's okay, everyone is suddenly richer due to paper revaluations of houses. Which by the way the majority need pulling down and replacing - what is it with Dunedinites and their inability to do necessary maintenance as required to their major assets: either held personally (houses) or collectively (infrastructure)??.

Okay, rant over.

Headline of the day should be from Jacinda to the US talk show host in the car.
"I am a woman, I multi task".
If a comment like this was made by a male PM it would be close to an instant removal from office.
Sexest comments are not acceptable any in way, shape or form!

don't worry, she'll be right

I'm a man, I don't need to multi task I did it correctly the first time.

Nahh, you only think you've done it correctly until it falls apart later. A bit like your argument Kezza.

Another sexest comment that apparently is quite acceptable in NZ but anything against females is pounced on.

LOL... Oh you're so funny. Did you ever stop to think that the Steven Colbert interview with our PM was really good promotional material for NZ. I suppose that goes beyond your very obvious limited point of view.

Here's the full interview for those who haven't seen it, it's worth watching : Stephen Colbert: The Newest Zealander Visits PM Jacinda Ardern.


... politically incorrect comments are only acceptable if made by ultra politically correct people ...

Us stale white males have to shut the f*ck up ... OK , boomer..

Sit down Boomers

Everytime I hear ok boomer all I can think if is myself walking away from that young sales person towards a boomer.
Good by dollars for the whingers.

Just tell them: Okey Dokey Wokey

I took it as self-deprecating and from a PM therefore humorous.

Yes I admit it is quite funny because she can get one or two things done but anything else is a shambles, so it is obvious that she can not multitask.

Why were you watching the PM and Colbat if so easily offended?

He has a hate boner for Jacinda.

The fact is her comment was massively sexest.

Doesn't make my comment any less accurate. Your views on Jacinda are quite clear from your post history about her.

Yeah she is useless, it's not had to find proof of that in the media.
The fact stands she finds it quite acceptable to be openly sexest.

Why do you contend that it is sexist, anyway? It is plainly a reference to oft-repeated discussion of earlier scientific investigation into differences in multitasking between men and women: https://www.bbc.com/news/science-environment-24645100

She appears to be out of date in that newer studies cast doubt on the matter (https://www.sciencealert.com/women-aren-t-better-multitaskers-than-men-t...) however you make it look as if your complaint is simply that it is sexist to point out any difference between men and women.

There are sometimes when doing two or more jobs at the same time is practical and faster but in the majority of times it takes longer and therefore less efficient than doing the said jobs in a pragmatic order.
Men don't actually call doing two or more jobs at a time multi tasking They call it being efficent and they also dont feel the need to sing their own praises when it was actually commonsense in the first place.

Unfortunately you have not presented evidence that her statement was an example of sexism, beyond the argument that any pointing out of differences between men and women is sexist.

"The fact is her comment was massively sexest". Don't talk rubbish and you can't even spell sexist correctly.

It's worse than JK pulling pony tails and look at the palava that caused.

See that's the nice thing about our current PM, she's not likely to do that kind of stupid behavior. :)

She just did something by far worse.

Nahh mate, don't be daft. So you're saying that it's ok to accost members of the public. Sorry but I think you'll find yourself in hot water if you try it.

Back in Kezza's day the girls in the typing pool genuinely appreciated a light pat on the rump, he'll have you know.

I'm not even a boomer and now you are rationalizing sexsium.

Kezza, mate, we need to treat everyone else with soft velvet gloves because they are so precious and fragile. It's sad really but there you are.

That's certainly what we've learned from the "OK Boomer" furor. Boomers need a Safe Space to protect that fragility.

It's sad really but there you are.

They must be getting fragile in their dotage.

Treat everyone as equal and they will treat others as equals.
Inequality breeds inequality.

I quite like how Ardern perceives there are differences between men and women. She's keeping it real.

I was impressed when Clark shut down Jacinda about the US talk show host marring them. He obviously needs to set the rules arround the house because he knows her well.
I thought he would have been a bit limp and agreed. Good in ya Clark.

To be fair, she does look a bit like a bloke

She hasn't got an ounce of commonsense.

I was in Adelaide for a few days and enjoyed the city and their newspapers.
The battery expansion may be linked to closure of a aluminium smelter and brown coal fired power station.
The aussies work in mysterious ways..


A 'Thinker in Residence'. Might explain the forward thinking.

Good luck with taking a case against a Chinese grower in a Chinese court!

Zespri is preparing to take a civil case in China against growers who have illegally planted the gold kiwifruit variety SunGold. The Tauranga-based marketing co-operative said there could be as many as 2500 hectares planted in the variety. In New Zealand, there are 5000 hectares of SunGold. SunGold represents about half of Zespri's total revenue of $2.94 billion a year. Zespri owns plant rights to the new SunGold for at least another 18 years, so only growers contracted to the co-operative can plant it.

Didn't Kiwi fruit come from China? they could win this argument.

'Kiwifruit is native to north-central and eastern China.[1] The first recorded description of the kiwifruit dates to 12th century China during the Song dynasty.[8] As it was usually collected from the wild and consumed for medicinal purposes, the plant was rarely cultivated or bred.[9] Cultivation of kiwifruit spread from China in the early 20th century to New Zealand, where the first commercial plantings occurred.[1] The fruit became popular with British and American servicemen stationed in New Zealand during World War II, and was later exported, first to Great Britain and then to California in the 1960s.[1][6]

Revenge for the west stealing silk and tea from China an rubber from brazil?

Trade & Foreign Affairs will have a view.


The WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) requires member states to provide protection for plant varieties either by patents or by an effective sui generis (stand alone) system, or a combination of the two.

Henry, did you see China has announced plans for 6.6 million hectares of new forest. Should come on the market about when Shane jones Billion trees are ready.

China grows about half the worlds kiwifruit, all it going to take for the Chinese to fix this problem is a few ships held up in Chinese ports with Milk powder, apples or wood.

It is what it is:

Two internets.
China carving out a china centric world.
Wanting to at the centre of...



Add to it China chemical exports.

Fentanyl production, state supported.


Drugs like fentanyl, K2, and Spice—and those with arcane acronyms like 25i-NBOMe— were all originally conceived in legitimate laboratories for proper scientific and medicinal purposes. Their formulas were then hijacked and manufactured by rogue chemists, largely in China, who change their molecular structures to stay ahead of the law, making the drugs’ effects impossible to predict. Westhoff has infiltrated this shadowy world. He tracks down the little-known scientists who invented these drugs and inadvertently killed thousands, as well as a mysterious drug baron who turned the law upside down in his home country of New Zealand. Westhoff visits the shady factories in China from which these drugs emanate, providing startling and original reporting on how China’s vast chemical industry operates, and how the Chinese government subsidizes it. Poignantly, he chronicles the lives of addicted users and dealers, families of victims, law enforcement officers, and underground drug awareness organizers in the U.S. and Europe. Together they represent the shocking and riveting full anatomy of a calamity we are just beginning to understand. From its depths, as Westhoff relates, are emerging new strategies that may provide essential long-term solution.

In Australia, the minutes from the November 5 RBA rate review meeting show it was a lot closer to cutting than markets predicted, but opted for a "wait and assess" approach. The release of their thinking has hit Aussie bond yields, and New Zealand yields have suffered some collateral declines too.

“As an empirical matter, low interest rates are a sign that monetary policy has been tight-in the sense that the quantity of money has grown slowly; high interest rates are a sign that monetary policy has been easy-in the sense that the quantity of money has grown rapidly. The broadest facts of experience run in precisely the opposite direction from that which the financial community and academic economists have all generally taken for granted.” Link

Adrian Orr makes a speech at an overseas conference. Michael Reddell lays it out on the mortician's slab and dissects it....

We have still not had a single substantive speech from the Governor on monetary policy and the economy. We haven’t at all from three of the statutory members of the MPC. It is harder to make good decisions when central banks spring – quite unnecessary – surprises. Oh, and actually it is no part of the Bank’s mandate to be opining on what policies are best for “long and prosperous growth” (although it is remarkable that structural policies appear not to be relevant to the Governor’s view of growth, productivity etc).

Growth is exponential, and therefore doomed to cessation, usually bewildering to linear-minded believers in perpetuity.

Productivity is merely energy-efficiencies, labour long having been out-grunted by fossil energy. That too, had to inevitably plateau - the Second Law being somewhat inviolable.

What amazes me more, is the dogged avoidance of those two facts, by, well, folk who should know better by now.......

Telling criticism, since our government 10 year note yield trades at ~1.36%, below the current 1.5% CPI release.

And as for the final sentence…….he falls into the trap again of trying to convince us that low interest rates are some exogenous gift, empowering whole new opportunities, when in fact interest rates – long-term market-set ones and official OCRs – are low for reasons that seem to have to do with diminished opportunities, diminished prospects for profitable investments. Don’t get me wrong – given all that, the OCR should be lower (mimicking what real market forces would be doing if short-term interest rates were a market phenomenon), but when interest rates are falling in response to deteriorating fundamentals it is a stretch – at very least – to expect the sort of pick-up in business investment the Bank often forecasts but rarely gets to see.

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