What happened Wednesday

A review of things you need to know before you go home on Wednesday; no rate changes, Govt stimulus confirmed, retail sales pick up strongly, credit rating upgrade, swaps firm, NZD unchanged, & more

11th Dec 19, 3:59pm by David Chaston

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
None to report today.

TERM DEPOSIT RATE CHANGES
None here either.

RBNZ's 'FRIEND' ADDS STIMULUS
The Government has announced an extra $6.8 bln to be allocated towards transport infrastructure. New capital spending won't get out the door until 2021. Treasury forecasts lower tax revenue and weaker economic growth. The NZD initially rose, then softened as the implications became clearer. Wholesale interest rates did the same. Ratings agency S&P says New Zealand's AA rating is unaffected by the higher government spending and weaker economic conditions that are weighing on fiscal outcomes. "We believe this can be accommodated within the current rating and net debt threshold."

RETAIL SALES STRONG
Retail card sales have the strongest rise since January 2017. They bounced back strongly in November 2019, Statistics NZ says, with much more spent on long-lasting goods such as recreational, hardware, and appliances, as well as food and drink. Overall on a non-seasonally adjusted basis, these retail sales are up +5.1% from the same month a year ago (despite the fuel component being down -4.8% in the same period). That was the strongest rise since October 2018.

CLIMATE CRISIS
In Australia, officials at the Bureau of Meteorology have advised the State and Federal Governments that NSW will now get no rain until April 2020.

CREDIT RATING RAISED
S&P Global Ratings has raised its long- and short-term ratings one notch for Christchurch City Holdings to AA- from A+. The outlook is stable. They are Christchurch City Council's investment holdings company.

DAIRY A BIG PART OF CHINA URBAN GROWTH
In China, dairy products are a key part of the high growth convenience stores are experiencing there. Dairy products in particular, which tend to be more costly than other food items, were gaining popularity among Chinese consumers with high personal income, and those living in tier one cities. They are part of a new billion dollar trend. The sector is growing fast. Convenience, coupled with rising urbanisation, will see momentum and good growth for years to come.

LOCAL SWAP RATES UP
Wholesales swap rates have moved up today. The two and five year tenors are up +2 bps and the ten year is up +3 bps. The 90-day bank bill rate is unchanged at 1.19%. Australian swap rates are firm too and similar to New Zealand. The Aussie Govt 10yr is up +3 bps today to 1.15%. The China Govt 10yr is still unchanged at 3.23%. The NZ Govt 10 yr yield is down -2 bps at 1.52%. The UST 10yr yield is up +2 bps to 1.84%.

NZ DOLLAR STILL FIRM
The Kiwi dollar is marginally lower at 65.4 USc. Against the Aussie we are still at 96 AUc. Against the euro we are holding at 59 euro cents. That means the TWI-5 has dipped marginally to 70.6.

BITCOIN DOWN AGAIN
Bitcoin is now at US$7,231 and -1.3% lower than this time yesterday. The bitcoin price is charted in the currency set below.

This chart is animated here.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

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33 Comments

by Wrong John | 11th Dec 19, 4:35pm 1576035335

More promises from CoL. No action until 2021. Typical.

by easymoney | 11th Dec 19, 8:45pm 1576050349

That's right LGM...How can anyone take this government seriously...???

by Andrewj | 11th Dec 19, 4:43pm 1576035797

I still think there will be limits on dairy growth in China, not enough mutants.
https://nextshark.com/lactose-intolerance-asians-dairy/

by frazz | 11th Dec 19, 4:45pm 1576035915

"Bureau of Meteorology have advised the State and Federal Governments that NSW will now get no rain until April 2020"
Re thinking our move to Sydney - Wellington is starting to look more appealing by the day. Love to hear from the climate change deniers..hows your science looking?

by youngdumbandbroke | 11th Dec 19, 4:54pm 1576036442

Following white island, not sure i'd be moving to a steep, rocky, overpriced, earthquake prone place. The traffic is horrendous and getting worse also

by frazz | 11th Dec 19, 5:18pm 1576037893

? 5 mins drive home and currently having a swim in the sea...or are you talking about Auckland?

by youngdumbandbroke | 11th Dec 19, 7:33pm 1576046000

5 mins drive home in Wellington.. was that the punchline?

by frazz | 12th Dec 19, 4:43am 1576078990

Let me guess your stuck in your car and that's the best you could come up with? Yup 5 min drive home..for some of us in NZ that is the norm...you might want to consider expanding your views.

by Computer | 11th Dec 19, 6:04pm 1576040672

Broken public transport system too.

by frazz | 11th Dec 19, 6:06pm 1576040774

It's been fixed..hows the Auckland bus strike going..gridlock I hear?

by Computer | 11th Dec 19, 7:17pm 1576045071

No it hasn't, and I live there. Bus system still a shambles and seems not a month goes by without some sort of problem with the train signals or overheads.

by Masher | 11th Dec 19, 7:40pm 1576046431

The Wellington public transport system is a joke. No where near fixed.

by frazz | 12th Dec 19, 4:45am 1576079144

Well bus our routes have been put back to the way they were before change so sorted, guess some others still waiting?

by Andrewj | 11th Dec 19, 4:54pm 1576036471

And it never failed that during the dry years the people forgot about the rich years, and during the wet years they lost all memory of the dry years. It was always that way. some families would sell out for nearly nothing and move away.

John Steinbeck, East of Eden

by Tradersam | 11th Dec 19, 6:07pm 1576040850

Frazz if you think "climate change" is about climate, it's not. It's about global taxation to be spent by IMF bureaucrats and others. By the way, C02 is not pollution. You exhale it all day.

by Pragmatist | 11th Dec 19, 7:09pm 1576044549

Hmmm, science vs conspiracy theories.. I think I'll go with the side without the tinfoil headwear.

by youngdumbandbroke | 11th Dec 19, 7:36pm 1576046200

Maybe if the bureaucrats practiced what they preach, then maybe it would be more plausible. Easy for them to tell us how to live our lives while they do the opposite e.g. Prince Harry taking private jet to preach about climate change

by frazz | 12th Dec 19, 4:47am 1576079258

Nah starts with the individual...do you wait for instructions for everything you do?

by youngdumbandbroke | 12th Dec 19, 8:45am 1576093516

No it doesn't. Until the ones that consume and pollute the most change, your change is negligible aka pointless

by linklater01 | 12th Dec 19, 7:11pm 1576131077

Tradersam,

Another ill informed rant from the decreasing band of climate change deniers. Clearly, you know nothing about science, let alone climate science. Of course CO2 is an integral part of our life on earth, as is O2, but both can be deadly. We must have oxygen, but our bodies can only deal with so much and the earth can only cope with a certain level of carbon dioxide. Go and learn about the electro-magnetic spectrum, learn about the importance of the trace or greenhouse gases, learn something about the earth's albedo. Just how would you explain the melting of our cryosphere?

Your ignorance would be amusing, if a warming planet was not a serious threat to the wellbeing of so many.

by Masher | 11th Dec 19, 7:37pm 1576046253

For the first time fire fighters are experiencing fires they can't control. These are in areas where burns offs have been banned due to your science. What makes matters worse is new trees that have been planted, in the name of your science, in areas that experience bush fires most summers.

Yes, the world clearly has issues, and climate change does exist, but looking purely at Sydney in isolation your ideology has done more harm than good. The reality is if burn-offs weren't banned in the name of your science, and new trees weren't planted in high fire risk areas in the name of your science we wouldn't be dealing with this faecal matter in Sydney at present.

by Masher | 11th Dec 19, 8:14pm 1576048475

And ironically, right now, ITS RAINING IN SYDNEY!!! Astonishing.

If weather forecasts get day 1 wrong of a 4 month forecast, how accurate are these climate change forecasts for 5, 10 and 20 years time? Oh thats right, science!

by frazz | 12th Dec 19, 4:51am 1576079467

Cloudy. Slight (20%) chance of a shower. Areas of smoke haze, mainly in the west. Winds southerly 15 to 25 km/h tending southeasterly 20 to 30 km/h in the early afternoon then becoming light in the late evening.

by Masher | 12th Dec 19, 9:33am 1576096411

Nice try mate. Either those raindrops were imaginary, or Lane Cove isn't part of NSW. Take your pick.

Yesterday you were stating there was no rain until April, and your response has provided a forecast with a chance of rain, which eventuated. Amazing.

Awaiting your habitual response in the name of pride....

by Andrewj | 11th Dec 19, 4:47pm 1576036042

China has a problem with food inflation
https://alhambrapartners.com/2019/12/10/if-trade-wars-couldnt-might-pig…

by KBKIWI | 11th Dec 19, 5:26pm 1576038360

Why is bitcoin included in this daily summary? It is a nonsense "asset" with no actual worth that no one actually uses as currency. it really cheapens what is really a good daily summary service by interest.co.nz

by J.C. | 11th Dec 19, 7:30pm 1576045814

Investment over past 12 months would have been up100 pc

by KBKIWI | 11th Dec 19, 5:26pm 1576038361

by frazz | 11th Dec 19, 5:57pm 1576040270

$41 billion
Currently, the value of all the Bitcoin in the world is $41 billion, roughly the net worth of Google co-founder Larry Page -Jun 25, 2019

by Battinz | 11th Dec 19, 9:52pm 1576054336

So the stock price of Google should get a special paragraph every day?

by printer8 | 11th Dec 19, 6:11pm 1576041098

I am interested in hearing what attraction it has;
- as a means of exchange, and how widely /commonly is it used for this purpose and what advantages it has over traditional exchange; and
- as an investment and what factors (other than herd mentality) influences its value.

by DIYman | 11th Dec 19, 5:28pm 1576038504

Stimulus equals more roads, equals more hotmix to maintain in the future, AND more hotmix over good farming land. We have been expecting this for some time.
The Govt and the RBNZ are treating the NZ economy like a car with a brake and an accelerator, someone please tell them human behaviour, and a multitude of other factors are in the mix. From a sustainable point of view, hunkering down and living within our means, even if that means dropping our appetite for travel and other luxuries a notch, rather than spend , spend, spend, and thinking about our grandchildren is the sensible option.

by Computer | 11th Dec 19, 6:10pm 1576041036

Sad that National can't seem to move beyond "build more roads" either. Surely there's no shortage of work needed on other areas such as our energy infrastructure - generation, transmission, storage, which could all be in better shape.