US holiday masks weaknesses; Mexico and Japan report weak data; OECD pessimistic; key food prices jump; Aussie capex falls; UST 10yr yield at 1.77%; oil and gold little-changed; NZ$1 = 64.1 USc; TWI-5 = 69.6

US holiday masks weaknesses; Mexico and Japan report weak data; OECD pessimistic; key food prices jump; Aussie capex falls; UST 10yr yield at 1.77%; oil and gold little-changed; NZ$1 = 64.1 USc; TWI-5 = 69.6

Here's our summary of key events overnight that affect New Zealand, with news the background economic data is still pointing to a trade-induced global slowdown.

It is a national holiday in the US, Thanksgiving Day. Limited financial market activity will resume tomorrow (their Friday) but it will be very limited. All eyes however will be on retail sales and there are palpable nerves. Bad weather may just accentuate the rise of online shopping and many traditional retailers will be fearing the possibilities.

Americans may be celebrating on this holiday, but they are not having enough babies to sustain their population. The final data for 2018 shows they had a birth rate of just 11.6 per 1000 population. Any rate below 21 is below sustaining their population without immigration. New Zealand has a similar issue with our birth rate at 11.9 on the same basis.

In the trade war, the new US law that supports Hong Kong democracy is being seen as an obstacle to the 'phase one' deal, but perhaps not a major one. Markets brushed aside the potential of China walking away. The OECD sees trade volumes fading everywhere.

Canada's current account deficit in the third quarter rose, but not by as much as analysts were expecting. Their goods deficit widened largely related to trade retaliation from China, but their services deficit shrank as Canada benefited from a number of shifts by others away from the US to them. Canada doesn't run a large current account deficit, only about -2.6% of GDP and shrinking.

In Mexico, they have trimmed their growth forecast on the basis that the US is slowing faster than they expected.

Japanese retail sales have plunged in October after a sales tax hike and more importantly a typhoon that kept shoppers at home. It was a worse-than-expected result. They fell -14.4% in October from a month earlier, more than the drop suffered after a similar tax increase five years ago and the worst drop on record for data stretching back to 2002. Clearly hosting the Rugby World Cup had zero influence there, unlike the out sized influence it had here.

German CPI for November came in at +1.1% and holding its new lower rate. Analysts has expected it to tick back up after the October fall, but like just about everyone else, they can't shake low inflation.

The UN-FAO databases for October show that globally, meat prices are up +13.9% in a year and dairy prices are up +5.6%. While this is good for producers, they are concerned about the sharp impact on consumers. Of course, much of the meat price rise is due to China's bad ASF situation in its pork herd. The impacts are being felt far wider however. So far the price of cereals haven't risen over the past year, and some of these are caught up in the trade war between the US and China.

In Australia, capital expenditure in the September quarter was down -1.3% year-on-year while plant and equipment investment was down -2.4%. A big pull-back in the mining sector is a big part of this, but not all of it.

The UST 10yr yield is now back at 1.77% and will likely stay here until Wall Street returns in earnest on Tuesday our time. Their 2-10 curve is still lower at +14 bps. Their 1-5 curve is narrower, now at just under +3 bps. Their 3m-10yr curve is a positive +12 bps. The Aussie Govt 10yr is at 1.01%, another -2 bps lower as it continues on it reversing track. The China Govt 10yr is holding at 3.20%. The NZ Govt 10 yr is now at 1.28%, down another -3 bps.

Gold is unchanged at US$1,455/oz.

US oil prices are marginally lower and now just under US$58/bbl. The Brent benchmark is under US$63.50/bbl.

The Kiwi dollar is marginally softer at 64.1 USc. On the cross rates we unchanged at 94.8 AUc. Against the euro we are at 58.6 euro cents. That puts the TWI-5 at just under 69.6.

Bitcoin is little-changed at US$7,585. The bitcoin rate is charted in the exchange rate set below.

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Whats causing people to have less children?

women having careers rather than just being baby dispensers.

12
up

A reaction to the environmental conditions. The world is getting ugly - not so sure I would breed either if I was of age,

... trust me ... you'll change your tune when you do come of age ... now , back to the sand pit with the other kiddies ....

Why would they change their tune...rather thanput downs Gumny come up with some good reasons to have kids?

Getting uglier true but still in the main it is paradise - especially late spring in Auckland. So why leave this natural beauty to those who breed but not your own family?

It's never been better to be a kid. "A child born today is more likely to reach retirement age than his forebears were to live to their fifth birthday."

Dumb statistic

people waiting to buy a house first? and by that time only time to squeeze one out? Probably a bit of all of above.

... tell them to rip down to the Warehouse and get a tent ... that'll sort out our breeding problem...

Everyone knows sex is best when it's in tents ...

Yep.
Gummy it just like fossil fuels....

Use it or lose it.

Mainly cost. Secondly reduced interest in 'organic' relationships. Thirdly increasing selfishness.

Solution if you want one: (a) generous Universal child benefit (b) reintroduce the 'sabbath' by having one day a week internet and TV free.

Selfishness? Yes lets not have another little consumer who will grow up and be selfish and spend days on financial websites.

My contribution to climate change is not having kids

Greta approves

... does that imply she stole their childhood !

Yea true, with more disposable income childless couples do tend to overdo the fossil energy consumption.

So having kids reduces consumption? Didn't realise it was opposite day my mistake

Yep. Locally I'd say financial concerns. Time taken to save for house deposit + generally both parents needed to be working to support + the expense in raising children in itself.

It still kinda baffles me how with all the economic and social 'progress' we are moving backwards in key wellbeing indicators like this!

Time, effort, and finance.

The clever ones realise this. Unfortunately, the ones that shouldn't breed do not.

No more govt handouts after 2 children... it wouldn't be hard to implement such a policy. It wouldn't be taking away anyone's right to have more than 2 children, it would simply mean the state (tax payers) do not finance more than this.

No govt handouts. Period.

So the "clever" ones die out, replaced by the others. Who's clever now eh?
Perhaps it's not so clever to worry about finance and hogging all the world's resources. Maybe clever is life.

Everyone dies, so i don't see your point. Also, not so clever ones are easier to predict and manipulate, therefore the few clever control the many stupid

The problem is severe in South Korea and not a lot better in Japan. The causes are suggested to be:
- High pressure to excel academically
- High costs of housing
- Lack of affordable childcare facilities
- Lack of income tax breaks for having more children
- Cultural emphasis on "taking responsibility for your actions" which leads intelligent, responsible youngsters to decide that they can't afford to have children, as to do so would be irresponsible
- Long working/commuting hours leaving little time for romance or housework
- Pressure to have both husband and wife in fulltime employment just to pay for basic essentials such as rent, education, food
- High rates of increase in food costs
- Overconcentration of the population into the capital city region
- The stigma of "living in the countryside"
- A dearth of young opinion-leaders (pop stars, talents) who have large families (more than 2 children)
- Over-emphasis on consumption of luxury products

what do you mean "the problem"? That's rather opinionated.

I'd say a trend towards world population reduction is rather positive. More resource for each person to share.

All the other reasons come back to one thing, peak resources per person is an event that is in the rear vision mirror. The birth rate is the leading indicator, if we had wealth (conversion of resources) we would breed. Just like the bacteria in a jar, or yeast in a wort, if there is food it will be consumed, when there isn't we die off.

For us (Zero Children) - student loan hurdle, deposit for house hurdle - looking after boomer parents hurdle - and basically ran out of time.

First two reasons yes. I'd love a little of the third - boomer partner and myself are still propping up our adult kids with no end in sight. Admittedly two grandchildren and they are a joy - there would be a massive increase in children if the decision was left to the grandparents.

When you plan for paying student loan, paying for overpriced houses, and saving for a retirement when there might not be a universal pension system like today then the financial capacity you have to pay for children is significantly reduced.

... ejectile dysfunction ?

This is the wrong page to discuss your current health issues Gummy

Cos the only people who can afford to raise a family in NZ are Lotto winners ?

... people are in fear of the Greens introducing a nappy tax ?

I'm married, 30s and considering kids.
Financially it's difficult. I don't earn a great wage, with my wife out of the workforce for a while it'd be hard to pay the rent. Basically we'd have to go on benefits.
We're both university-educated btw, but if you haven't entered the corporate or public service cohort by the time you're 30 you're basically consigned to low-income jobs (or retraining, which is impossible to afford if you've already used up your student allowances getting a first degree)

The solution is a universal generous child benefit. Your children are the future of NZ for all of us. Spending tax payers money on NZ children should be considered investment and the best investment the govt can make.

Meat prices. Next year corn and wheat due to USA disastrous season flooding. Inflation is coming and no doubt this will draw headlines of “unexpected”

And the early-onset USA winter ain't gonna help....crops cannot lie about insufficient GDD....

I found "The Hunt for Red October" here in the bookshelf and finished it last nigh. I still find it fascinating having grown up in the paranoia of communism that our right wing party are climbing into bed with them now.

The US birth rate data presented here is conflating two different statistics. Birth rates are declining in the US but it is not as dire as presented here. On average, American women are giving birth to about 1.7 children in ther lifetime whereas the required number for long term population mainenance is 2.1. But the American population will continue to increase for quite some time yet given that births exceed deaths from a pyramid-shaped population. Most estimates suggest the American population will increase by a further 30% or thereabouts by 2060 - about another 90 to 100 million. The two key parameters will be birth rates and immigration rates, with death rates easier to predict. Similarly, births still exceed deaths in NZ, despite a birth rate at around 1.8 births per women being a little less than the magic 2.1 for maintenance, given the population pyramid. However, most of NZ's population growth rate, which is remarkably high by OECD standards, is due to immigration.
KeithW

I don't rate Don Brash, I debated with him online once and he lost. However his comments here on immigration are worth listening to. https://www.youtube.com/watch?v=Iz-hmcicRC0&feature=youtu.be&fbclid=IwAR...

... pewresearch project that the US will top out at 434 million citizens by the year 2100 ... a 105 m. increase on their current 329 million population ...

They estimate the total world population to stabilize at 10.9 billion by 2100 ...

. . populationpyramid estimate that NZ will only grow to 6.094 million by 2100 ... a 1.1 million increase in the next 80 years ...

Unless the Gnats win power in 2020 ... and reopen the immigration sluice gates ... in which case we'll probably hit the 6 million mark by 2023 ...