Democracy rejects China in Taiwan too; Hong Kong bank competition sees hot TD rates; air travel growing; US payroll growth and pay slowing; good Aussie retail data; UST 10yr yield at 1.82%; oil lower and gold higher; NZ$1 = 66.3 USc; TWI-5 = 71.5

Democracy rejects China in Taiwan too; Hong Kong bank competition sees hot TD rates; air travel growing; US payroll growth and pay slowing; good Aussie retail data; UST 10yr yield at 1.82%; oil lower and gold higher; NZ$1 = 66.3 USc; TWI-5 = 71.5

Good morning, wherever you are. Here's our summary of key economic events over the weekend that affect New Zealand, with news China's bullying style of governing has been soundly rejected again.

In Taiwan, their presidential election ended in a landslide win for the incumbent, anti-Beijing candidate, a strong echo of the Hong Kong democratic vote. Interestingly, it was also a strong repudiation of ham-fisted Beijing social media election interference. Hong Kong had a rare weekend of peace. There was an echo in Europe as well. And we have an election this year, and Chinese behind-the-scenes string-pulling could become an issue here too.

And away from politics in Hong Kong, they are preparing for the launch of a slew of new digital banks. One interesting consequence is that competition for deposits is expected to spike, and raise the offer rates significantly. Current TD rates in Hong Kong are similar to ours but the first of these new banks is offering 6% for a three month TD to selected new customers. Real competition in action.

International air travel rose +3.1% in November with the Asia/Pacific region rising +3.9%. These rates are similar to the growth recorded in previous recent months. Of special concern in January however will be travel in China during the major Golden Week holiday. It has the chance to rapidly spread a new deadly pneumonia virus discovered in central China - a kind of SARS II.

American payrolls grew in December by +145,000 and that was considerably below expectations of a +160,000 gain. They were lucky it wasn't worse. The results for the previous two months were revised down. That caps a year where private sector employment rose by +1.9 mln people (or +1.5%), and far less than the +2.6 mln rise in 2018. In December, factory sector jobs actually shrank by -12,000 jobs and over the whole year grew by less than +0.4%. More analysts are saying the American goods producing sector is now in recession. If it wasn't for a curious +39,000 spike by the retail rag trade over the holiday period, the overall result would have been much worse. And going forward, Boeing's increasing woes won't help either. In fact, a top Treasury official says it could cut -½% from US economic growth this year.

Average weekly earnings rose less than +2.3% in December from a year ago and that is a sharp slowing from the +2.8% rise in November. (For factory pay, the gain was just +1.6%.) In fact, you have to go back almost three years to find a slower wage gain. It is unsure what the Federal Reserve will make of today's jobs report.

In Canada, the jobs market was a lot better in December. They added +35,000 jobs and all of them full-time. Their jobless rate reduced. Average weekly earnings rose +3.7% although that was slightly lower than expected and lower than the +4.5% rise in November.

Back in the US, the Federal Reserve paid to the US Treasury US$55 bln in dividends in 2019, down from US$65 bln in 2018 and a ten year low. It's not as profitable being a central bank as it once was.

Australian retail sales came in better than expected for November, according to official data. They were up +3.2% year on year and that is the best rise since April 2019. Apparently Australians took to the Black Friday event more enthusiastically than expected. Now the question will be, was this at the expense of the traditional Christmas season? In November, Queensland, Tasmania and the ACT all starred, Western Australia was average, Victoria and South Australia were below average, and NSW was weak. Bush fires are unlikely to help December and January in NSW or Victoria.

The ECB has published a paper that reaffirms the traditional relationship between growth and inflation, despite theri recent struggles to reconcile the two in the digital age. Raising inflation is still the way to get economies growing again and reduce joblessness, they say.

The UST 10yr yield is now just on 1.82%. Their 2-10 curve has tightened up, now at +25 bps. Their 1-5 curve is flatter at just +11 bps. And their 3m-10yr curve is moved the most, much narrower at +30 bps. The Aussie Govt 10yr is at 1.23% and very similar to where it was a week ago. The China Govt 10yr is down -5 bps from this time last week at 3.14%. And the NZ Govt 10 yr is -10 bps lower for the week at 1.49%.

Gold will start the week up +US$4 at US$1,562/oz.

US oil prices have fallen further today now just over US$59/bbl and the Brent benchmark is down too at US$65/bbl.

The Kiwi dollar is firm and now at 66.3 USc. On the cross rates we are at 96.1 AUc. Against the euro we are at 59.7 euro cents. That puts our TWI-5 at 71.5 and the same level it was this time last week.

Bitcoin is now at US$8,103 and up +10% from this time last week. 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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83 Comments

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Highlight new comments in the last hr(s).

China news.
China in Mexico.
This goes beyond the illegal mining of Iron Ore that's been going on for a while.
https://www.channel4.com/news/mexico-knights-templar-la-tuta-iron-ore-la...

Everyone knows about the their work with cartels and Fentanyl.

On the horizon are the capture of reserves of Lithium. Lithium to be used in the "green revolution".
https://www.mining-technology.com/features/top-ten-biggest-lithium-mines/

https://southfront.org/all-sights-on-mexico-as-it-discovers-worlds-large...

Joe R working through Mexico issues with a seasoned (still alive) operative.
Must listen, must see pod.
https://youtu.be/xPBejhoKlb8

Credit Suisse guilty of stealing childhoods ! ... Swedish school girl Greta Thurnberg has lambasted tennis supremo Roger Federer online , for having CS as his major sponsor .... CS have provided funding for some fossil fuel companies...

Shame on you CS !!! . . teee heeeee.....

Award winning stuff
Climate scientist & tennis coach too?
https://youtu.be/byI1YkWwAbs

15
up

You mean Scoldilocks is a manufactured and manipulated PR puppet, created to take advantage of the armor afforded by pedophastry (using kids as props to make dissenters look mean)? This is my shocked face.

Yes. I too was inconsolable when I read this.

Oh dear lord you need help

" Scoldilocks " .... c'mon , you gotta larf ... that is frigging funny :-)

Agree not bad

Yeah but he was never that into it.......

Greta Thunberg's father revealed in a recent interview he was at first "not supportive" of his 16-year-old daughter's climate activism.

https://www.google.com/amp/s/www.cbsnews.com/amp/news/greta-thunberg-par...

.

Still upset over a 16 year who you refer to as a school girl...not Time magazine person of the year 2019?

So true. GBH should be much more respectful of the Time anointing.
After-all, she is in very esteemed company..

https://www.businessinsider.com.au/time-person-of-the-year-most-controve...

The magazine bases its choices on the person or thing that had the “the greatest impact on the news, for good or ill.

Frazz, flipped now?, you are now arguing with yourself.

No just poking the deplorables on Monday morning - amusing to see the reaction

So, indifference between virtue and infamy...
That's definitely how we should select all our messiahs.

Dude do you know how hard it is to sell magazines these days.

...nothing to do with me ... she's the one who chose to berate the greatest tennis player of the modern era ....

It is news ... or should I only quote things you deem acceptable ?

... I am in awe of her , " Time Person of the Year " ... a wonderful honour that .... amongst the greats , like Joseph Stalin and Adolf Hitler " ...

Go do something productive than typing each day.

Who doesn't work in the cloud now.
And haven't you got a kettle pot thing going on here?

You're on a tear in this thread frazz! How productive you are telling people off left and right for making fun of your messiah.

Taiwan is in a tricky spot. Trump cannot be relied upon to support them. While he is full of bluster and contradiction and appears prepared to use his military for some things, he doesn't in others. Plus he seems to favour supporting authoritarian regimes. His unpredictability makes him unreliable.

I really admire Taiwan for standing up to China. Over the years they have successfully faced down China's military on a number of occasions, but just on size alone they would struggle to hold out for long without America's help. But them the Yanks have always been a little two faced with them.

It looks like if USA lives are lost, the drones are deployed if already war zone or terrorist spot.
Non war zones, Depends if groups are denoted as terrorists, see the Mexican news and when cartels win such, changes much.
US president doesn't decide who is war ed upon, need Rep & Dems to support.

12
up

Yeah
If China is so great, why are Hong Kong and Taiwan rejecting?
Because of course they know the value of freedom.

Taiwan problem is they make china, CCP look bad.
Compare.
Tawain is so much more richer, culture & $ than china.
CCP rule in china, cultural revolution threw the joint back to the stone age. Both regards.
CCP & Xi can never have that contrast.

Taiwan needs a nuclear deterrent, but they need to get it instantly - any development or transitional period where it was announced but not in place would be incredibly dangerous as China would be very motivated to stop it by any means necessary. And chinese spying would make it nigh on impossible to present it as a fait accompli.

A part of the problem with a nuclear deterrent is the proximity they are from China (mainland). The warning time is seconds, not minutes and the likelihood is such a deterrent will be a suicide option only, so no they don't need this. what they need is a conventional force of size and capacity and defence partners that will make China think twice about trying to take them on.

No country aside from the US can ever hope to be able to match the conventional military might of China. China is only held in check by nuclear powers of world. Their expansionist efforts in the south china seas has probably ensured that all their near neighbors are now thinking very hard about developing nuclear weapons.

They might be thinking about them, but the point would be next to useless. with around a minute to react or lose it all, the risks of an accidental launch of a nuclear weapon are just too high. The Ukrainian airliner in Iran is a good example of this, human error will destroy the world in a nuclear holocaust.

No, allying with the US would be a better way to do it. Have a modern, but conventional force that can slow them down until help arrives. Taiwan has faced down China several times in the past and are fully prepared for an invasion, even though they too know that without help they are likely to fail. But the Japanese, Philippines, Koreans and the US want and need Taiwan to stay free, as do the rest of us. What holds the Chinese back from nuking, or even just invading Taiwan are the US security guarantees, but the Taiwanese will put it all on the line for themselves, unlike a number of ME states.

Match China militarily? how about Russia, India and the EU?

Is the USA not the nuclear deterrent?
I don't think the US would stand by and let China 'take' Taiwan.
Hence, the eternal stand off and fudging.

NZ has been even more two faced. The first country to recognise the CCP dictatorship as the real China....

11
up

NZ doesn't seem to give a s$&t about China's human rights abuses, market flouting etc etc. Other than in a very superficial way.
We place our economic wellbeing above these things.
Pragmatic, or morally reprehensible????
Especially for a party (Labour) that talks a good talk about human rights etc etc,

Strategically it is getting to be rather tight indeed. Taiwan is like one giant aircraft carrier, well armed indeed, right on China’s doorstep. Also not a small player at all in terms of her financial status, globally. You have to think this is on a par with Israel parked up on all the unfriendly ME borders too.

Here's an interesting article: BBC Can Australia's PM Scott Morrison recover from the fires?
Scott really needs to rethink his attitude on climate change if he wants to win voters back.
https://www.bbc.com/news/av/world-australia-51068521/can-australia-s-pm-...

Short answer: Probably

He needs to buy in a whole squadron of those Canadian fire fighting planes another contributor detailed here a few days back. Have them parked up ready to go. And then he can say I listened and I acted. There it is.

The fuel loads are 10x higher than what water bombers can put out. Water bombers can only be used in conjunction with fuel reduction burns. A $12 million field study proved this years ago.
https://omny.fm/shows/nights/scientist-david-packham-on-whats-really-cau...

Scott Morrison: "We could close down every single power generation facility in the country and those emissions would be taken up by China in about nine days." Scott points out the state of the Emperor's attire.

Is that why he won the unwillable "climate change election"?

China's view of the election result from Xinhua
http://www.chinadaily.com.cn/a/202001/12/WS5e1a6866a310cf3e35583f4d.html

Its local.
Last night.
Last night in the Chinese restaurant in Christchurch all the staff, especially the young ladies, young ladies from China that have recently graduated from University of Canterbury (working tables until a professional job comes up, they graduated in areas of finance and civil engineering) they were so sad for what the people of Taiwan have done.
Saying Taiwan is part of China and so must respect Xi's wishes like everyone else does.

They have been well indoctrinated.

15
up

They likely have different thoughts in their head, but are very aware of they eyes upon them.

Wow, the language and propaganda of that article is quite something. It's not really that far off some of the darker stuff of the 20th century.

And we though we could make money selling retail there, in a fairs fairs sort of way! Beingmates.

Very Rough Shape, And That’s With The Payroll Data We Have Now

According to the BLS, the average hourly wage increased by 3.03% year-over-year in December. That was the lowest since September 2018, a very steep two-month decline (3.39% in November, both down from 3.62% in October) and like hours and JOLTS suggests serious strains and weakening in the labor market.

That’s the largest two-month downshift in the average hourly wage since 2003.

Demand and utilization tailing off – not crashing – in a manner totally inconsistent with Richard Clarida and his “The U.S. economy begins the year 2020 in a good place.”

It is not in recession, but that still can’t be ruled out. The risks of one keep rising as the economy more and more synchronizes with the global downturn. Link

Good grief, another page full of climate science denial after an Interest article.

.. you got stronger eyesight than me ... haven't spotted a single climate science denier here ....

Plenty on this site but they are not brave enough to admit it to themselves

... shame on them ... they just dont get it .... tisk tisk ...

Welcome to the real world, where we haven't all succumbed to the death cult.

What Greta Thunberg is speaking, is the truth. As in: physics. Her particular cranial focus limits her to that, and she's right on the nail re the remaining carbon budget. The local retired Energy Prof calculates it between Thunberg's figure and Extinction Rebellion's. Basically, to hold below 1.5 degrees, we have to quit CO2 emanation by 2025-30.

As Rutherford once reputedly said, All science is either physics, or stamp-collecting.

What we see up-thread, is a bunch of sad little stamp-collectors. And their paid lackeys/bots, of course.

Perhaps it's time Interest.co did an article on energy; our increased use of same YOY versus labour, our current point on the FF depletion-curve, and how much energy all our forward financial betting expects in the future? Climate Change is merely the exhaust gases of our unsustainable energy-use (and the massed bleatings of those dependent on the current paradigm sound a bit like exhaust-gases too).

The real question is whether economic accounting should include physical stocks? Because they certainly don't at the moment - they fly blind; relying on collected bets to 'value' stuff (as they did so well with South Pine, Amalgamated Broom and Ariadne.....smart thing, the invisible hand - perhaps it should be re-named the invisible brain?) Ultimately, an increasing pile of bets cannot 'value' a depleting pile of underwrite, unless of course the proxy-chips become increasingly devalued. A classic example is Norway, which will end up with a pile of shares in an energy-depleted stock-market, but without the real energy it once possessed. What will it's shares be 'worth'?

As Rutherford once reputedly said, All science is either physics, or stamp-collecting.
Nothing quite like a reputed quote as a basis for making a point.

Royal Family Crisis Solved ! ... yes , you read it here first , royal watchers ... rather than have Prince Harry and Meghan Markle sloping around Canada or the US to avoid feeling useless , superfluous to Mumsy's needs ... give them a job in NZ

... create a new kingdom right here in NZ .... not the whole country of course... just the Chatham Islands .... King Harry and Queen Meghan , of the royal throne of Chatham ... win/win . .. imagine the stamps , commemorative plates , and silver coins we'll sell ...

Will your walls have enough room Gummy and stamp collection books?

Note his need to instantly be the latest comment, while altering the discussion to something inane.

You have to wonder why a supposedly mature member of society reduces himself (it will be a him, CC-denial is mostly male for obvious physiological reasons) to such a ridiculous level.

Says a lot about the robustness (not) of their message, Also, the current effort suggest a certain desperation to stem the direction our societal narrative is going in. One thig we know, is the the old paradigm always gets replaced with the new. They are bleating for the old, so we know where they end up. They are the stereotype who forced legislation for a man with a flag walking in front of every motor-car. Wre'll laught at the GBH types in hindsight too, but with sadness, given that we could have used the time to become resilient/sustainable - but didn't.

... some of us have a wide range of interests ... we're not satisfied with endlessly gloomerising about just the one subject ....

If things will come to pass as you predict, the biggest threat will be dislocated populations competing for habitable places. How will you create anything sustainable in such scenario (if you had something working well it will most definitely attract attacks from the desperate with nothing to lose) is beyond me.

NZ should brace itself and plan ahead a little. The AUS scenario is playing out as per climate models. The trend indicates Aus will become virtually uninhabitable - and guess where they will come?

But lets discuss harry in msm.

My guess is Tasmania

... for the umpteenth time , I'm not a " cc denier " ...

Fully embrace the fact that climate changes , and always has ... either with or without our assistance ...

... and how much can we really control ... such as when the Taal volcano south of Manila erupts ... and belches mega tonnes of CO2 and other goodies into the atmosphere .... what to do .... hmmmm ?

...pretty much a denier based on those silly comments/comparisons.

The accusation of heresy is proof of guilt? How far have we fallen?

If he's the same as a duck, he is made of wood....

https://youtu.be/rf71YotfykQ

Say no more!

And will still be a 100x less than humans are belching 24 x 365

"According to the U.S. Geological Survey (USGS), the world’s volcanoes, both on land and undersea, generate about 200 million tons of carbon dioxide (CO2) annually, while our automotive and industrial activities cause some 24 billion tons of CO2 emissions every year worldwide. Despite the arguments to the contrary, the facts speak for themselves: Greenhouse gas emissions from volcanoes comprise less than one percent of those generated by today’s human endeavors."

Your argument is like saying there's no point in a healthy diet and exercise because a bus might run you over tomorrow. Sure, there's plenty of things that could wipe our species out or seriously knock our civilisation back. We don't need to add self-inflicted threats to an already long list.

Bradford Mint plates ... pewter mugs ... coins , tokens , stamps ... oh , that'll be a financial shot in the arm for Chatham Islanders ... their own king & queen ... sigh !

.. I have been outed as a " deplorable " for not getting hysterically gloomy about climate change ... so ... in the interests of that , a serious story :

.. Gwyneth Paltrow's webshop " GOOP " has sold out of "this smells like my vagina " candles ... they're a tadge expensive at $US 75 per candle ... but a bargain compared to the probable cost of having a sniff of the real thing .... and , all gone within hours of the product's launch ...

... she must stick a whole lot of things in there , cos the candles are scented with a weird and wonderful array of flowers and spices... bergamot , geranium , cedar , damask rose ... hmmmmm .... nice....

I was just having lunch ....

GBH. Really that is a wild conversation departure from the norm this morning. It is not fanny.

... it could be false advertising ... how do we know for sure that the candle smells like Miss P's vagina ?

Who may have snatched a sniff of that thing ?

... Donald Trump !

Wild

And yet again we see this inane need to be the last poster, spouting a pile of posterior-emanations.

Presumably readers will see the pattern

... butt butt butt ... the climate change energency isn't here , where I live ... its next door , in Christchurch ...

Pattern recognition it is.

https://m.wikihow.com/Accept-That-You-Have-No-Sense-of-Humor?amp=1

A sense of humor is a quality some possess that is considered valuable in a social context. If you are worried that you may not have a sense of humor, don't panic just yet. First, determine where your sense of humor lies. If you find you are naturally unfunny, worry not! Work instead on accepting the unique person you are and showcasing your other talents in a social context.

And for afterwork.

https://www.psychologytoday.com/nz/blog/humor-sapiens/201409/why-your-se...

Thank me later.

..yeah he's lots it over the xmas break. Not even funny any more.

Yep, very disappointing when PDK came out advocating population control and cheerfully supporting China's one child policy.

I have predicted he will find it hard to gather support, and especially from females.

Most people I know who struggled philosophically with the idea of having children, had children.
Those who didn't, in most cases couldn't.
I have known one or two to lecture about the ills of having children. Interestingly, they were in the category of 'couldn't have children'.
A psychological exercise of turning a 'negative' into a 'positive' ?

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