US holiday retail starts subdued; Canada growth slows; Japan confidence rises; China and India in growth downgrades; Aussie debt growth weak; UST 10yr 1.77%; oil down and gold up; NZ$1 = 64.2 USc; TWI-5 = 68.6

US holiday retail starts subdued; Canada growth slows; Japan confidence rises; China and India in growth downgrades; Aussie debt growth weak; UST 10yr 1.77%; oil down and gold up; NZ$1 = 64.2 USc; TWI-5 = 68.6

Here's our summary of key events overnight that affect New Zealand, with news of widespread slowdowns around the world, led by the US.

Firstly in the US, its Friday and one of the major retail shopping days of the year. Early reports are that shopping mall crowds aren't their usual levels and that online options are strong. Some major retailers are said to be absorbing the cost of tariffs to keep prices unchanged. Neither trend is enthusing Wall Street which has a truncated session today. The S&P500 is down -0.4%. Not helping sentiment is that the slimmed-down 'phase one' trade deal still isn't done.

Markets in Asia fell more sharply on the trade deal pessimism. In fact, Hong Kong was down more than -2% although is was less in Shanghai (-0.6%) and Tokyo (-0.4%). Overnight European markets were also lower although their losses were minor - except for London which was down nearly -1% where traders took profits aggressively.

In Canada, their Q3 GDP growth slowed to just +1.3% above the same quarter a year ago. And that is even slower than the US which slipped to a +1.9% gain.

In Japan consumer confidence rose again in November continuing a trend that started in July and that was unexpected. But it still remains very weak.

In China, a respected analysts is saying that growth in the Middle Kingdom will fall to only +5.7% in 2020 as investment levels stay weak.

In India, their Q3 2019 economic growth is also sliding, down to +4.5% year-on-year and way below their official targets.

In Germany, their retail sales data for October was weak and way below what was expected. But at least their jobless numbers didn't weaken. Employment rose.

In Australia, the RBA is signaling that buy-now, pay-later payments platforms aren't going to be allowed to prevent retailers surcharging customers for the fees they impose. This is because such rules 'no surcharge' rules raise prices for everyone including those who don't use the system.

Aussie private sector debt growth slowed in October to its weakest growth rate in almost ten years. Part of the reason is that the growth of BNPL schemes is siphoning off traditional personal credit growth and is not being counted. But there are also sharp slowdowns in both housing and business debt growth as well

Aussie new home sales may be bottoming out, according to an industry survey.

In the face of all this slowing data, it is hard to understand why equity markets are near their valuation highs. There is some evidence large investors are selling while small investors and pension funds stay in for the backward-looking price gains.

The UST 10yr yield is unchanged overnight 1.77% and that is unchanged for the week. Their 2-10 curve is positive at +16 bps. Their 1-5 curve is weaker for the week at +2 bps. Their 3m-10yr curve is also less positive +11 bps. The Aussie Govt 10yr is up +3 bps to 1.04% but that is a -6 bps fall for the week compounding the same fall last week. The China Govt 10yr is now at 3.20%, and unchanged for the week. The NZ Govt 10 yr is now at 1.30%, up +2 bps overnight but down -5 bps for the week.

Gold is up +US$10 from this time yesterday to US$1,465 and up +US$2 for the week.

The VIX volatility index is just over 12, and a similar level to this time last week. Its average over the past year is 17. The Fear & Greed index we follow has moved back over to 'extreme greed' levels.

US oil prices are down sharply today by almost -US$2 to just under US$55.50/bbl. The Brent benchmark is just under US$62.50/bbl. Fears of demand falls is behind the sudden reduction. And the price fall comes despite OPEC output cuts. The US rig count fell again.

The Kiwi dollar remains remarkably stable, now still at 64.2 USc and is essentially unchanged in a week. On the cross rates we are now at 94.9 AUc and another +½c gain in a week. In fact for November it has gained more than +2c. Against the euro we are little-changed at 58.2 euro cents. That puts the TWI-5 at just on 69.6.

Bitcoin is much higher today having gained +3.6% overnight and that makes it a +8.8% recovery for the week. It is now at US$7,760. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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Highlight new comments in the last hr(s).

"the number of jobs losses by German carmakers to almost 40,000 this year as the industry reels from a sales slump....Daimler said Friday that it plans to cut thousands of jobs worldwide by the end of 2022. It plans not to fill some vacant posts and to offer severance packages in Germany to reduce administrative jobs. The company said Nov. 14 that it plans to slash ....every 10th managerial position "

Heh, a true Decimation for Daimler....

'Yet it may come as a surprise to some, but the BOJ began quantitative easing under Fukui's immediate predecessor, Masaru Hayami. By the time Fukui took over, the pace of bond buying had jumped to 1.2 trillion yen a month.

"After taking office, I quietly decided to myself that I would not increase buying of long-term debt," Fukui said in the interviews. "I also felt conflicted about quantitative easing. ... I understood that that killing the function of interest rates would weaken the mechanism for economic regeneration," he said, explaining precisely how in their pursuit of all market time highs, central banks killed the underlying economies.'

Fukui - who left office in March 2008 when the U.S. subprime mortgage crisis was rippling through the American economy - felt a need "to avoid the risk that the threshold to fiscal policy became too low" if the Bank of Japan held too much long-term government debt, he told BOJ researchers during interviews held in 2016 to 2017. Of course, with the BOJ now holding over 100% of total debt, no politician can credibly make the case for fiscal caution, especially since the BOJ can just keep on monetizing the debt until eventually the yen disintegrates.

But perhaps more importantly, Fukui sounded an urgent note of doubt on ultralow policy interest rates, saying 1% is the lowest level at which rates can function. While he is probably right - with Bank of America recently finding that in a world of ZIRP and NIRP, currency moves are no longer impacted by rates - bankers now find themselves in a world of negative borrowing rates.

“Japan is the easiest place in the developed world to increase spending,” said Masamichi Adachi, chief Japan economist at UBS Securities Co. "Politicians love it and they’ve probably gotten tired of all the warnings of a debt crisis that hasn’t actually happened over the last decade."

Yet even though both the IMF and ECB are now urging everyone to rush into the warm, terminal embrace of MMT - i.e., helicopter money, i.e., direct debt monetization - not everyone has lost their minds. Former deputy Prime Minister Katsuya Okada, now a member of the opposition, says that the loosening fiscal stance of politicians among both the ruling and opposition camps is alarming.

“I’m very concerned about this emerging mood that there’s no need to address our spending and revenue,” Okada said. “There’s no doubt that Modern Monetary Theory has given some politicians the feeling of a sort of endorsement for more spending. But a frog in lukewarm water will end up boiled if the temperature keeps rising.”

There doesn't seem to be a fundamental problem with a government creating credit to finance itself. It may be significantly better than the system of sterilising spending by selling debt to banks. The problem seems to be in the tendency of politicians to spend excessively. In Jersey they were able to successfully upgrade infrastructure in this way.

In France, the monetisation of debt was what led to the bloodletting after the French revolution, as shopkeepers were routinely guillotined for putting up their prices to try to keep up with inflation. This also led to Napoleon (revolutions tend to end with mass murdering dictators it seems) who only paid cash or plundered.

There be dragons in practise, if not in theory.

Here is to Greenpeace,
Hoping they:
Be more Green
Have more Peace
5 to 7 guys run the whole show, keep reappointing themselves, they are cashed up, operating great business model.

That's why Sea Shepherd was set up..more direct action. I doubt you would be a member of either? PS what does this have to do with this Sat finance update?

Frazz, what were sea Shepard's main concerns regarding Green Peace.
What do you think of
Paterick Moore, and second
the treatment he has received from Green Peace since leaving.

Sea Shepard was set up as protests with banners was ineffective at that action was needed. I don't follow Green Peace or donate to them but respect them as a voice against corporate greed and pollution.

Greta's handlers, predictably, expand the agenda. A childhood stolen by watermelons.
"The climate crisis is not just about the environment. It is a crisis of human rights, of justice & of political will. Colonial, racist & patriarchal systems of oppression have created & fueled it."

I see rather than draining the swamp you've waded in neck deep.. That video was made by Doctors for Disaster Preparedness, and a quick google find this description:

In August 2015 the group held its 33rd annual meeting. While attacks on mainstream climate science are "a staple", the meeting provides a forum to a "broad" range of material. Presentations at the 2015 meeting included a theory about links between John F. Kennedy’s assassination and the deaths of his brother and son; a prediction that the aim of Obamacare was to cause the collapse the U.S. health-care system and a recommendation "that the audience start stockpiling medications and finding doctors who would work for cash"; a sympathetic discussion of the theory that low doses of radiation are "beneficial to human health"; and an argument that the HIV virus does not cause AIDS, but instead was invented by government scientists who wanted to cover up other health risks of “the lifestyle of homosexual men.”[3] The meeting was covered by conservative website Breitbart, attended by George Gilder, and the conservative Heartland Institute sent its science director to present his plan to abolish the Environmental Protection Agency.

Prag, I am interested in what you think of when referring to the swamp.

Prag, what are you thoughts on the presentation regarding Green Peace. The Green Peace one.

Didn't watch it, I don't often watch youtube videos that randoms post links to on the internet, and even less likely to after I figured out who/what DDP was.

Over-Indebted European Telecom Giant Tries to Dump its Latin American Empire

One of the biggest holders of Telefonica’s debt is the ECB, which as of last week held 19 issues of Telefonica bonds on its balance sheet — a legacy of the central bank’s last bond buying program, in which it acquired around €180 billion of investment grade corporate debt.

(From your link) This applies to just about everything we see about us at the moment...

“It is a new era, with questions for which we have no answers. Nobody is asking us for change, but we can’t not change.”

Something is seriously starting to break in China's financial system.

Three days after we described the self-destructive doom loop that is tearing apart China's smaller banks, where a second bank run took place in just two weeks - an unprecedented event for a country where until earlier this year not a single bank was allowed to fail publicly and has now had no less than five bank high profile nationalizations/bailouts/runs so far this year - the Chinese bond market is bracing itself for an unprecedented shock: a major, Fortune 500 Chinese commodity trader is poised to become the biggest and highest profile state-owned enterprise to default in the dollar bond market in over two decades.

Interesting comment: "There is some evidence large investors are selling while small investors and pension funds stay in for the backward-looking price gains."
This is the second time comment has been made of big investors having pulled back from the equity market - I recall something recently about a very large fund pulling $1bn out.
Pension funds (include here KiwiSaver funds) seem locked in and will continue to buy due to their fund's stated investment asset mix.

" . . the slimmed-down 'phase one' trade deal still isn't done . . . ".
Trump signing off the Hong Kong Human Rights and Democracy Act on Thursday won't be adding impetus to this. China’s Foreign Ministry spokesman Geng Shuang responsed the bill "fully reveals the ill intentions of some people in the United States to mess up Hong Kong and contain China's development."
Current USA - China situation and trade agreement was never just simply about trade imbalances.

US rig count down but US production set to crack the 13 mbpd milestone.

Fracking is destroying U.S. water supply, warns shocking new study
That means we are losing potable water forever in many semi-arid regions of the country, while simultaneously producing more carbon pollution that in turn is driving ever-worsening droughts in those same regions, as fracking expert Anthony Ingraffea, a professor at Cornell University, explained to ThinkProgress.

Try reading papers before you post Frazz rather than C&P from doomster websites. Your headline doesn't match the content of the paper nor name of the paper - "destruction of the US water supply" doesn't feature a mention either.
"Despite higher water intensity (the amount of water used to produce a unit of energy; for example, liters per gigajoules) of hydraulic fracturing compared to conventional vertical oil and gas wells, it has been shown that the overall water withdrawal for hydraulic fracturing is negligible compared to other industrial water uses on a national level."
Know anyone who puts down 2000m deep water supply bores?

Try seems credible to me..are you now an expert on fracking? You also forget to mention the chemicals used in fracking?

If "Fracking is destroying U.S. water supply, warns shocking new study" = " has been shown that the overall water withdrawal for hydraulic fracturing is negligible compared to other industrial water uses on a national level." then you have a Greta level credibility threshold.

Comparing the amount of water used by other industries is nothing but a red herring. Who cares if agriculture uses a gazillion litres of water when most of it is sprayed on fields where it either evaporates and reenters the atmospherical water cycle or seeps back down into the water table. Meanwhile fracking loads it up with nasty chemiclas and then then pumps it into shale formations trapped between layers of impervious rock and traps it. And that's the best case, if those impervious rocks aren't impervious then that chemical laden shit is probably going to leak into the water table.

It actually matters everytime massive amounts of water are used regardless of industry. That water has been diverted from somewhere and therefore causes disruption in the ecosystems downstream a la colorado river

... we have wrecked many of the fresh waterways in NZ in just one generation :

Generation Moo ...

The advent of Fonterrible , and the subsequent upscaling of our dairy herd to the equivalent of 100 million humans piddling and pooping in this once fair land...

fair enough, but I still call BS on the comparison of irrigation water vs fracking mud.

Westpac has been running an invisible banking system, invisible to regulators, where multinational company clients even had their own log-ons and could act like banks themselves. Michael West unpicks the Austrac action and the biggest money-laundering scandal in Australian history.

Thanks Andrew ...great link...Westpac seems to sinking further in reputation as more info comes to light...shocking

The apologists are out, hard to imagine there won't be jail time in the future, the reality is many are above the law today.

Why is Westpac still banker to New Zealand Government.

Has the PM's department taken action to review the relationship
The PM has been talking of the rotten behavioirs in Labour Party at conference.

Come on bankers don't go to jail. They become prime ministers of certain little countries.

The Curious Case of Bill Browder and The Magnitsky Act

A couple of weeks ago I told you the first U.S. Civil War was here.

What I didn’t tell you was the face of that Civil War is Bill Browder.

Browder was responsible for The Magnitsky Act. It handed our government insane sanctions powers on individuals and companies in the name of punishing rogue, evil regimes who torture innocents.

His story is the thing of spy novels. It reeks of power politics, market collusion and psychopathology.

And if only half of it is true, he and his associates deserve a fate worse than anything dreamed up by Dante and his Inferno.

That's the core of the problem. Too much consumption. And our capacity to sustain this population is contracting.

"It's got to be shrunk, and it's got to be shrunk humanely. The way to shrink it humanely to start is to give absolutely full opportunity, full legal rights and so on to women everywhere and make sure that everybody has modern contraception and safe backup abortion. That's just ground zero. If you don't believe in that, then you're just saying, OK, leave it to our great-grandchildren to pay the full price."

... oh lawdy ... granny Herald has run out of stories again ... now they're making up a hysterical piece , and quoting that eco-charlatan Paul Ehrlich ...

That guy has created a stellar , feted , celebrity career for himself over 50 years ... half a century of being wrong ... and of doing a disservice to the environmental cause by radically overstating the consequences of our consumptive society ...

Head in the sand comes to mind..

. . yes , he has ... 50 years of having a tin ear , oblivious of the damage he had done ... turning people off the important message of us cleaning up our act . . Much as " extinction rebellion " has done .... annoyed and aggravated people , rather than got them on board ...

The time for getting people onboard, has passed. No need to keep on filibustering, GBH.

... it is time to allow some science to be added into the mix .. there's a plethora of shame and blame being thrown about ... but very few workable solutions .

.. as the Greens here are ruling out GM ... whereas the rest of the world readily accepts the exciting prospects that GM represents .. provided strong oversight and safeguards are in place ...

"The U.S. solidified its status as an energy producer by posting the first full month as a net exporter of crude and petroleum products since government records began in 1949."

The dash to cash in the US runs unabated.

Energy costs. Engineers, any engineers able to comment please.

1 Wind turbine gears blowing
2 Safety of nuclear.
3 Levelised cost of electricity.
4 Differential cost of electricity & order of dispatch.

So are you just another paid hack

A blue piller that thinks he's a red piller.

... good links there ... thanks for that ... enjoyed and learned alot !

Growth in NZ is measured by: Immigration factor and dwellings - the whole world is looking into our economic success model, for this we should be proud of.

Silly me, there was I thinking it was something to do with producing more food than we eat.

Primary sector = 6.5% of GDP in 2013.
Services sector = 63% of GDP in 2013.

Over last week have been reading a concerted effort from the analysts (esp Goldman Sachs) to talk up an economic rebound next year: I have no idea what they think the roots of that are. The bad macros coming through more and more now were turning before the trade war ... that's just brought forward the consequences of debt saturation from this crazy loose monetary policy over the last ten years. If ever sharemarkets re-attach to the data - actual economies and earnings - and off the fix of this constant and reckless central bank liquidity geyser, that will be a hell of a correction and another cause for deep recession.

.. very much so ... what ammo have the central bwankers got left to bail us out of the next recession.... .they've painted themselves , and us as a consequence , into a corner ...

'Ow much for a bog standard Kiwi Build house after the market tanks 30 or 60 % ....

Prices will go up in NZ Dollars, but probably down in US Dollars.

... do you believe that the rest of the global economy will maintain their faith in the greenback as the reserve currency of the world ?

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