A review of things you need to know before you go home on Friday; wholesale rates jump, housing markets firmer, factory expansion real, UDC does better, swaps up, NZD up, & more

A review of things you need to know before you go home on Friday; wholesale rates jump, housing markets firmer, factory expansion real, UDC does better, swaps up, NZD up, & more
ID 22702269 © Daniaphoto | Dreamstime.com

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

MORTGAGE RATE CHANGES
None to report today. But just know that we are wondering whether some of the larger banks might be thinking of raising some of their low 'special' rates soon. They might do this so that when they return from the holiday break they can re-institute them with some fanfare as "new lower rates". Just a guess though. Not a guess, we can confirm that TSB is extending its Price Match Offer "until further notice". Update: Westpac has raised its 2 year rate by +10 bps to 3.55%. That now matches all its main rivals except BNZ who still offers 3.45%.

TERM DEPOSIT RATE CHANGES
None here either.

READ THAT
If you don't normally read the Swaps para below, I suggest you take a look today. Two year swap rates have risen +26 bps since the beginning of November.

A FIRMER HOUSING MARKET
The housing market was generally firmer in November with record prices in 10 regions, according the the latest REINZ data. Sales volumes were stronger in Auckland than the rest of the country. Hamilton prices are now up to 70% of Auckland regional median prices, Tauranga prices are up to 79%, Wellington City prices are up to 90%, while Christchurch City prices are languishing at just under 55%. Dunedin is rising fast, but only up to 59% while Queenstown is now at 107% of the Auckland region benchmark. Since the low point at the end of 2015, regional center prices have been consistently rising vs the Auckland benchmark.

GLASS HALF FULL
New Zealand's manufacturing sector experienced slower expansion levels in November, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index. This follows an impressive jump in October, so the November result is just a settling. Even so, at 51.6, this is not recording a strong factory sector. BNZ notes that new order levels are much better. The result is on the back of a strong recovery in Auckland, and continued good results in Otago. Compared with most other countries, the NZ levels are still quite good and a major improvement from earlier in the year.

RECORD ANNUAL PROFIT FOR UDC
UDC, ANZ's on-the-block finance company, has posted record annual net profit after tax of $69.7 mln, a +7% year-on-year increase. UDC's lending grew +5.5%, with commercial lending up +8%, and motor vehicle lending up +6%. In October UDC's debenture book was wound up with customer investments repaid or converted to an equivalent ANZ investment. The level of funding support provided by ANZ has thus grown, with the limit on the facility increased to $3.1 bln from $2.7 bln. At September 30, $2.692 bln was utilised.

HARASSMENT, COERCION, MISLEADING CLAIMS
An account director of a debt collection company and the company have both been warned by the Commerce Commission over information given to debtors and for conduct which the Commission considers was likely to be harassment and/or coercion. The warnings were sent to Twenty Five Station Limited (TFS) which is now in liquidation and John Stuart Campbell who was its Account Director. TFS traded as Law Debt Collection.

LIMITED DEAL NEARER, APPARENTLY
The US President has apparently approved a phase-one trade deal with China, averting the December 15 introduction of a new wave of American tariffs on about US$160 bln of consumer goods from China. At least, that is what Bloomberg is reporting. The Chinese are saying the two sides have "maintained close communications". A reprieve on tariffs will save the US consumer higher prices. US equities rose at the end of today's session on these rumours. Japan equities have opened sharply high, up an eye-catching +2.3%. Hong Kong has opened up +1.6% and Shanghai has opened +1.1% higher.

LOCAL SWAP RATES JUMP
Wholesales swap rates have moved sharply higher today. The two year is up +6 bps to 1.25%, the five year is up +8 bps to 1.41%, and the ten year is up +10 bps to 1.74%. The 90-day bank bill rate is up +1 bp to 1.20%. Australian swap rates are up as much as for New Zealand, if not a little more. The Aussie Govt 10yr is up +10 bps at 1.25%. The China Govt 10yr is little-changed at 3.23%. The NZ Govt 10 yr yield is up +6 bps at 1.59%. The UST 10yr yield is up +11 bps to 1.91%.

NZ DOLLAR FIRMER
The Kiwi dollar is higher yet again at 66.2 USc and the first time its been above 66 USc since July. Against the Aussie we are softer at 95.6 AUc (meaning the Aussie dollar has risen faster than the Kiwi). Against the euro we are holding at 59.2 euro cents. Against the UK pound, we are down to 49.1 UKp as that currency rises on a decisive election result. That means the TWI-5 has risen to 71.

BITCOIN UNCHANGED
Bitcoin is now at US$7,193 and little-changed since this time yesterday. The bitcoin price is charted in the currency set below.

This chart is animated here.

Daily exchange rates

Select chart tabs »

The 'US$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Loading...
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
Loading...
USD 
NZD
End of day UTC
Source: CoinDesk

Daily swap rates

Select chart tabs »

The '1 year %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '2 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '3 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '4 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '5 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '7 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA
The '10 years %' chart will be drawn here.
Loading...
Opening daily rate
Source: NZFMA

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

15 Comments

Comment Filter

Highlight new comments in the last hr(s).

Brexit appears to be the winner on the day.

Yes, as Nike say, 'Just do it'. It was a binding referendum.

Indeed - the Tory party will need to hone their diplomatic skills.
UK no longer makes running on world stage, says ex-No 10 adviser

UK is a net importer of EU goods. EU needs UK trade more than vice versa. Won't be hard to strike a deal. And UK gets to unhook from the inevitable economic collapse of the EU PIGS (high debt and huge youth unemployment are an inescapable death sentence)

The chap seems to think Tony Blair was good at foreign policy. Seriously?

Re the PMI index, it's been expanding but at an increasingly slower rate since 2013. In fact, the decline since mid-2018 is the worst since the GFC.

In UK the noisy left illustrate yet again how out of touch they are with the vox populi driving home yet again that media, twitter, facebook and even commentariet on sites such as this are not in any way representative of the general population and should be mostly ignored by politicians seeking to appeal to wide audiences. If you want to win elections ignore the poisonous far left (and far right)

On election propaganda, findings in the UK show:

1. For the Conservatives, 88% (5,952) of the party's most widely promoted ads either featured claims which had been flagged by independent fact-checking organisations as not correct or not entirely correct.

2. For Labour, it said that it could not find any misleading claims in ads run over the period.

So the right wing in the UK is being rather loose with the facts in attempts to indoctrinate the populace, from the looks of it.

Source: https://www.bbc.co.uk/news/amp/technology-50726500

^^case in point.

UK Labour's biggest and silliest mistake was Corbyn...and his failure to take a stance on Brexit. Made them unelectable to everyone.

However, it would be foolish to ignore the influences of weaponised misinformation on the hoi polloi. You end up with "out of touch" vs. manipulating the hoi polloi in order to gain or hold power. For example, nearly half the British public still believe Boris Johnson's ‘£350million a week to EU’ myth: https://www.independent.co.uk/news/uk/politics/vote-leave-brexit-lies-eu... Or coal miners believing that Trump will bring back coal as he promised: https://edition.cnn.com/2019/09/05/politics/coal-miners-union-president-...

Misleading and manipulating is not quite the same as being "in touch". By your definition, the most "in touch" leadership will thus be Putin and Kim Jong Un.

Do you have any proof that ignoring the far right would be a good idea? Depends what you mean by "far right" I guess. Are Trump supporters, or at least supporters of the Trump that campaigned for the Presidency or Brexiters far right? I'd say that most people possess a mixture of socialist and nationalist tendencies. When you really think about what that means it is rather far right. They want a state that protects the borders and the national character while also providing a high level of social welfare when it comes to medicine, education, pensions and unemployment. This is not something that should be opened up to the whole world as most people know that would destroy it all.

Also most people are secretly anti-woke. They often wont verbalise it but deep down there is a growing contempt for the constant propaganda being pumped out by mass media. Most people passively resist wokeness. Campaigners who stress wokeness are going to fail more so in the coming years. Campaigners need to cleverly tap into the hidden deplorableness of the ordinary person. This is not a weakness of the people but a strength, a fundamental survival mechanism.

As a central banker, you have to be able to say stupid things. It's almost the full job description nowadays.

But Lagarde, come on. There's get-the-job level of stupid and then there's this:

"I don’t think Japanification is on the cards at all."

WTF? Link

She can get away with this kind of statement because of how it all comes about – not all at once and certainly not in a straight line. In other words, like Japan in the nineties Europe in the tens didn’t just fall down after ’08 and stay that way. It has ebbed and flowed like everyone else. Rather than a straight decline, Japan’s “lost decade” was actually a series of false dawns. Only false dawns.

The problem, for public purposes, has been how they are always characterized. Every minor upturn is described as gigantic booming of epic proportions, the skilled result of so much monetary genius, when, in fact, each one has actually turned out to be a false dawn. Every single time. Japan as well as Europe.

Yes.

I’m most interested in China’s reaction to the supposed deal. Trump may have signed it but that doesn’t mean it’s necessarily agreeable to China. In fact, trump signing it probably means it isn’t agreeable to China.

I get the feeling trump is making his final offer before imposing tariffs on 15 Dec.