A review of things you need to know before you go home on Wednesday; rate cuts, stronger commodity prices, house prices up, dairy prices hold, equities slide, swap rates drop, NZD firm & more

A review of things you need to know before you go home on Wednesday; rate cuts, stronger commodity prices, house prices up, dairy prices hold, equities slide, swap rates drop, NZD firm & more
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Here are the key things you need to know before you leave work today.

AN APOLOGY, SORT OF ..
interest.co.nz has had fewer articles posted today. That is because today was the staff end-of-year function. (There might be a few extra typos below.) We will be back in full service tomorrow.

MORTGAGE RATE CHANGES
SBS Bank has cut its 1 year 'special' to 3.39%, now matching most of its rivals. Christian Savings has cut all its rates (and its car loan rate base too).

TERM DEPOSIT RATE CHANGES
Asset Finance has trimmed rate offers for nine months, 3 and 4 years.

'BURGER FUEL
ANZ reports
: "The ANZ World Commodity Price Index lifted 4.3% in November, with beef up an astonishing 19% m/m. The overall index is currently 12.4% higher than it was a year ago. In local currency terms the index lifted 3.5% m/m, constrained by a stronger New Zealand dollar."

MOMENTUM REGAINED
QV says housing values rose steadily throughout the country over Spring. Residential property values are now rising even in previously sluggish markets like Auckland and Christchurch.

SMP ON THE RISE
Dairy prices marked time in today's auction. But of note is that SMP prices are continuing their upward trend and cheddar cheese prices are up as well. SMP prices are actually up +55% since the start of 2019 and at five year highs. And it is now at 92% of the WMP price and that is the highest since early 2015. Most other elements were flat.

ONLINE WINNING, LOCALLY AT LEAST
Growth in New Zealand online retailing was +8% in October from the same month a year ago, according to the BNZ/Marketview analysis. For international sites the growth was a paltry +1% while for domestic sites it is up an impressive +13%, mainly due to the growth of supermarket sales.

RESCUED BY EXPORTS
On top of yesterday's very strong current account surplus, the Australian economy has posted annual growth of +1.7%, up from a decade low of +1.4%, confirming the RBA's assessment that their economy has passed a “gentle turning point". But their household sector was "subdued" and kept the result modest. This is a result that shows their election bribe helicopter money was essentially saved by households and did nothing to encourge economic spending and growth.

SHARPLY LOWER
Car sales in Australia in November were -9.8% lower than the same month a year ago, the 20th straight month these have declined.

OUTRIGHT BANS
Aussie regulator ASIC has banned unsolicited ‘cold call’ telephone sales of life insurance and consumer credit insurance. The ban is because of poor sales practices that have led to unfair consumer outcomes, they say. It will take effect from 13 January 2020.

EXPANDING FASTER
In China, the private survey of services PMI has come in higher at a respectable 53.5 and a good level of expansion..That backs up the official services PMI.

DOWN EVERYWHERE
Following a rather sharp fall on Wall Street, equities in Tokyo have opened down -1.2%. In Hong Kong they have also opened down -1.2% and in Shanghai down -0.3%. Across the ditch, the ASX200 is down -1.5% and the NZX50 is down -0.2% in late trade.

LOCAL SWAP RATES SHARPLY LOWER
As sharply as they rose yesterday, wholesale swap rates have fallen back today on the sudden global risk-averse sentiment. They are down -3 bps for the two year tenor, and -4 bps for five years and -7 bps for ten years. The 90-day bank bill rate is down -1 bp at 1.21%. Australian swap rates are down about the same as NZ. The Aussie Govt 10yr is down -3 bps today at 1.09%. The China Govt 10yr is down -2 bps at 3.21%. The NZ Govt 10 yr yield is down -2 bps at 1.40%. The UST 10yr yield is down -9 bp, now up to 1.73%.

NZ DOLLAR FIRM
The Kiwi dollar is holing up however, now at 65.1 USc. Against the Aussie we are at 95.3 AUc. Against the euro we are still at 58.8 euro cents. That means the TWI-5 is unchanged at 70.3.

BITCOIN DROPS
In the last two hours, bitcoin has taken a bit of a tumble, now at US$7,146 and now down -2.5% on the day. The bitcoin price is charted in the currency set below.

This chart is animated here.

Daily exchange rates

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Source: CoinDesk

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36 Comments

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Highlight new comments in the last hr(s).

US markets down two days in a row despite mega money thrown at them to keep them up.
There might be a few more percent in the markets and people are sticking arround to grab the last crumbs but I dont think anyone thinks it's going to have another dramatic push up.

.

Hi Kezza
Australia S&P/ASX 200 currently down 3.8% over two days.

"80 per cent of the (Australian) economy is going backwards', and that's likely to continue for some time"
https://www.abc.net.au/news/2019-12-04/economy-to-continue-teetering-on-...

And QE starting...
Main stream writes a few articals about this sort of thing but twice as many to say it's all gravey and to jump in and buy buy buy...

Did QE ever stop. I know the Americans paused their programme but they never managed to unwind it. If Europe and Japan paused it was probably a brief pause.

Ozzy QE starting.

True? That would be huge for New Zealand economic policy. We’d need to consider taking similar steps to keep our exchange rate competitive.

The writing was on the wall a year or so ago and Jacinda should have started large infrastructure project planning. Now she just came on with school matiance.. No faith she's going to get much done if her history on delivery is anything to judge her by.

Exactly. Definitely a year too late.

What? Why do some people think borrow and hope might work? I have a good name for Jacinda and Grant's new project. Think Big. Has a ring to it. Historical as well. Which of the borrowed money projects is projected to pay them all back? Can someone get hold of the financials and publish them please. From the last Think Big, I know the Clyde Dam has paid it's costs back many times, but I am not sure of some of the other projects. Please enlighten us on the future profits of the ones thrown out as yet.

Printer8.. 3.8% is a kicking.

US markets down two days in a row despite mega money thrown at them to keep them up.

Max Keiser mentioned that the ruling elite would not be concerned if the S&P500 doubled in the next few years. Keep the punters happy with the status quo.

That would have some stunning effects arround the world.

"Forestry firm Claymark Group tipped into receivership, 500 jobs on the line"

Tough bussiness to be in. The banks are tighting up on their lending as well.

The North Island is far dryer than it usually is at this time of year, and we've had a delayed start to summer already. Currently dams are above 85% full in Auckland but it could be a long dry summer and we're not off to a great start.

We are bloody dry, watering trees, watching the lovely colours in HB. Lost trees in yesterdays wind, back over 30 today.

I grew up in HB and had a quick visit the past weekend.
It's going to get too hot there to live eventually.

I've taken the 'blue pill'

Yep the Bay of Plenty is going to become a pretty challenging place for horticulture. NZ can only support so many wineries.

An interesting analogy on the health of the domestic economy in Australia:
Federal and state governments pouring money mindlessly on meaningless pursuits is the equivalent of parents buying drinks at their children's lemonade stall to make everything is fine and dandy.


Working the lollipop can now fetch you
180k a year under the new Queensland project plan.

This is similar to Japan's highways to nowhere

Have Fannie And Freddie Learned Nothing?

Thanks to cheap money and government bailouts of banks and Fannie and Freddie, you would not have interventionist measures that produce such moral hazards.

It just gets worse and worse...

What we know from Austrac’s court filing is that in recent years $11 billion has moved into Australia without being reported, unseen by regulators..... the incoming $11 billion – each transaction worth about $200,000, on average.
Austrac describes that one bank “maintained two accounts with Westpac, in its own name, each of which was used exclusively to facilitate payments for two large multinationals and their related companies … each multinational accessed the accounts through the banking logon provided by the correspondent bank”.
Which multinationals are involved has not been publicly disclosed – it isn’t even clear whether Westpac knows who they are.

https://www.michaelwest.com.au/the-barangaroo-triangle-inside-westpacs-i...

Which multinationals are involved has not been publicly disclosed – it isn’t even clear whether Westpac knows who they are.

Tyco.

Dodgy as.

The drug trade alone is 1/2 trillion in cash. That can't go under the mattress so is all funneled through the banks one way or another.

"A report compiled for the committee detailed how HSBC's subsidiaries transported billions of dollars of cash in armoured vehicles, cleared suspicious travellers' cheques worth billions, and allowed Mexican drug lords buy to planes with money laundered through Cayman Islands accounts.

Other subsidiaries moved money from Iran, Syria and other countries on US sanctions lists, and helped a Saudi bank linked to al-Qaida to shift money to the US."
https://www.theguardian.com/business/2012/jul/17/hsbc-executive-resigns-...

Great to see the USA taking a stand on China's barbaric concentration camps. Principled.

Nah. We put our fragile economy ahead of principles and human rights.
You can say what you like about Trump, but it can't be denied that he is standing up to the Chinese.
Anyone really think the trade war is about trade?

Thats my take on him. At least he says what he means. Better than the usual vague convoluted dribble that politicians spill to not upset anyone