A review of things you need to know before you go home on Tuesday; building consent levels weak, business gloom persists although less, pay growth slowing, farmers bristle, swaps rise, NZD soft, & more

A review of things you need to know before you go home on Tuesday; building consent levels weak, business gloom persists although less, pay growth slowing, farmers bristle, swaps rise, NZD soft, & more
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Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
Christian Savings have reduced most rates, but they did raise their 18 and 24 month rates to 3.00% and 3.10% respectively.

LESS THAN IT SEEMS I
The November residential building consent levels came in somewhat disappointingly, up just +2.7% year-on-year nationally on a total dwelling basis, and down -4.4% year-on-year in Auckland on the same basis. (If it wasn't for some large projects in both Māngere-Ōtāhuhu and Papakura, the Auckland numbers would have been very weak indeed.) The meager national rise depended almost solely on strong gains in Palmerston North, Wellington and Christchurch. Consents for houses and retirement units were weak and negative, for apartments and townhouses they were strong. Statistics NZ touted the year-to-November residential consent levels being a 47 year high, but beneath that headline the signs are not great.

LESS THAN IT SEEMS II
Non-residential building consents sagged seriously in November, falling more than -20% from a year ago. But a $170 mln consent for a new education facility for AgResearch and Lincoln University in Canterbury, artificially boosted last year’s figure. Ironically, it is a project that was abandoned, so that actual fall is much less. But there were still sizable falls, with consents in Auckland the hardest hit, down -28% and -$90 mln less than in November 2018.

LESS GLOOM, BUT A LOW BAR
A smaller portion of businesses had a pessimistic view of the economy in the final three months of 2019 (-26%), compared to the previous quarter (-35%), according to the latest Quarterly Survey of Business Opinion from the NZIER. This is less of an improvement than signaled in the December ANZ business sentiment survey. ASB said the data supports another RBNZ rate cut. No-one thinks it supports improving economic growth in 2020.

EARLY EVIDENCE PAY GROWTH IS SLOWING?
Now that Payday Filing by employers is bedded in at the IRD, they are sharing the data at a high national level with Stats NZ. That enables us to look at the number and growth of filled jobs on a relatively timely basis, and the gross pay earned in the same period. The results are interesting. In the November data released today, the number of "filled jobs" has ticked over 2.2 mln for the first time, up by +68,100 or +3.1% in a year. And even more interesting, this data shows jobs growth in the rural sector (up +3.4% from the same month in 2018), and in the "goods producing sector" (up +3.5%) is faster than for the services sector (up +3.0%). Earnings data is only disclosed in gross for all sectors, and that was up +3.1% in the year to November to an average of $61,050 per job, a rise of an annualised +3.1% in the year. That actually is well below the +3.7% growth in the January to July period.

FARMERS BRISTLE
Farmers are reacting to unbalanced primary school climate change lesson plans written by activists to be taught 'as fact' in New Zealand. Simplistic 'eat local', 'food miles', and livestock-are-bad messages are included that if embraced will result in net increases in global greenhouse gasses, precisely because New Zealand supply is world-leading in minimal impacts. Superficial and unscientific capturing of lesson plans has the rural lobby bristling.

ABUSING FRIENDS, EXCUSING ENEMIES
The US has removed China from its designation as a "currency manipulator". Putting it on there was just a political step in the first place. The same notice taking it off is as well, but the notice fingers a range of US allies under threat of a similar designation: Germany, Ireland, Italy, Japan, Korea, Malaysia, Singapore, Switzerland, and Vietnam. No country with a strong-man dictatorship is on the list.

EQUITIES RISING
After sizable gains yesterday (up +0.8%, +1.1% and +0.5% respectively), the Shanghai, Hong Kong and Tokyo markets have opened even higher today, up +0.3%, +0.4% and +0.8% respectively in early trade. That follows Wall Street's +0.7% rise earlier. The ASX200 dipped -0.4% yesterday but is up +0.8% so far today. The NZX50 was flat yesterday, and is up +0.5% in late trade.

LOCAL SWAP RATES TURN HIGHER
Wholesale swap rates are higher and steeper today. The two year is up +2 bps, the five year is up +3 bps and the ten year is up +4 bps. The 90-day bank bill rate is also up +2 bps, now at 1.27%. Australian swap rates are also up, but not as sharply.. The Aussie Govt 10yr is up +1 bp from this morning to 1.25%. The China Govt 10yr is up +3 bps at 3.15%. The NZ Govt 10 yr yield is up +5 bps, now at 1.52%. The UST 10yr yield is up +4 bps to 1.86%.

NZ DOLLAR SOFT
The Kiwi dollar has turned a little lower, now at 66.2 USc. Against the Aussie we are unchanged at 96.1 AUc. Against the euro we down sharply to 59.4 euro cents. That means the TWI-5 is lower at under 71.4..

BITCOIN RISES
Bitcoin has risen strongly this afternoon, up +4.1% since 1pm and now at US$8,431. It only seems to be due to chartists inferring momentum from the pictures on their screens. The bitcoin price is charted in the currency set below.

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38 Comments

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Doesn't the headline "building consent levels weak" somehow contradict the other headline of today's article "house building hits 45 year high" ?

No. The 'weak' reference is for the November activity (compared to November a year ago). The "45 year high" is for the full year to November. Both are correct.

Good to see timelier data now that Payday filing is up and going. I would have thought that yearly earnings rise of 3.1% was not bad at all given the low inflation we have?

whoops, wrong place

“given the low inflation we have”.

“low inflation” and “we” are somewhat subjective – and seems to be an issue that is continually overlooked.

The CPI measure is precise, not subjective

'Tis precise, but whether it contains the right mix of measures is another matter. There were a few articles on Interest last year about that very issue, with ANZ (IIRC) suggesting by their measure that inflation was higher. I don't know whether their measure included David Hisco's spending, perhaps a factor.

Indeed, so not subjective. Disagreeing with the rules is a different matter

I’d love everything to be that simplistic – perhaps you are missing my point.

I said “low inflation” is somewhat subjective – not the CPI calculation.

The CPI measure itself is precise – yes, but are the underlying metrics (basket of goods and services weightings) correctly measuring overall “inflation” as we commonly understand it.

Does a one size fit all?

Simplistic 'eat local', 'food miles', and livestock-are-bad messages are included that if embraced will result in net increases in global greenhouse gasses, precisely because New Zealand supply is world-leading in minimal impacts.

Sorry, not letting that one fly by unchallenged, you are going to have to justify that statement. Not buying food that's been flown halfway round the world will not increase global greenhouse emissions.

I’d prefer they stick to the science of climate change rather than the policies to address it. Talk about where emissions come from. Also did you say primary school, this seems a bit much for a primary school lesson given the complexities.

agree, primary school is not the place to be indoctrinating those that really aren't old enough to assess this information, or change anything. Primary school should stick to teaching the educational basics and personal interaction skills.

I can’t think of another policy issue they teach at primary school - poverty, unemployment, rationed health services, race relations - so I don’t understand why you would target this at primary school students. I’d be fine with it at sixth form as part of a physics/chemistry/politics/economics syllabus.

I’m also confused about who came up with mitigation strategies. Are they going to talk about nuclear power, geoengineering or the importance of smaller families?

They should also teach people about the number of fatalities linked to coal and fossil fuel emissions. But talking about hundreds of thousands of fatalities each year is probably a bit scary for primary school.

My children have studied all the issues you referred to at their primary school. They have done fairs/fundraisers for poverty in NZ and abroad where issues of health and employment were discussed. They also incorporated race relations in a stop bullying campaign at the school combined with mediation training for the kids. Today's kids are more woke than earlier generations.

yah.
What's wrong with 'eat local'. Entirely good way of approaching climate change.
heck, my daughter's primary school has even got a really decent vege garden going, lot of potential for more local gardens to give us all a good chunk of our dietary needs.
We'll be healthier for it and build some community spirit,, as well as burning less fossil fuels.
Is NZ really 'world leading' in 'minimal impacts'? We are so remote that we've got to fly all our produce long distances.

We shouldn’t be spoon feeding children token solutions to complex policy problems.

There is nothing wrong with eat local but it’s essentially a values based decision and as such doesn’t belong in primary school education.

Isn't there ANY place left for values in education?
I agree this stuff shouldn't be shoved down throats, but I don't see why there can't be some 'social studies style' education on climate change and ways in which we might approach life that could make a difference.
These sorts of things have always been part of schooling. When I was growing up we learnt about apartheid.
Can anyone really argue against the ills of apartheid or climate change?
Anyway, that's just my view.

What are they not teaching now that had been.
What subjects have been dropped in favour of this?

Speaking from recent experience of my daughter's schooling, NO subjects have been dropped. There has been a social studies component of education for a very long time.

Religion....thank God

Thats our current education problem. We are now relying on the school to provide discipline and values. Something that the parents should be doing

Absolutely kids should be taught how to grow their own food, along with preparing it and enjoying it. Sad bit is that too many of them will grow up with no access to any land to carry it on. Maybe if they get that knowledge under their belt they will see something worth saving later in life.
Big solutions will start and be driven by small decisions.

Some good schools have farms.

We don't fly all our produce....
Call it reefer madness.

Yes world leading, it's great.

Pardon his linguistic clodhopperiness, but he's just a troll/bot at primary school, just learning.

"It only seems to be due to chartists inferring momentum from the pictures on their screens"

Nothing to do with the plus token scam criminals with their 200k bitcoins stopping mass selling after 7 months, negative interest rates, QE 2.0, imminent launch of sovereign blockchain currencies (Chinese DCEP, Euro zone chain and not to mention private chains like JP Morgan Coin and Project Libra), various banks on the brink of collapse (including many in China and the rumored demise of Deutsch Bank) the incoming halvening, tensions in Iran as protestors are again killed and the successful launch of CME's bitcoin options today?

Even the investment bankers (of the likes of "Bitcoin is worse than rat poison") are waking up: https://www.theblockcrypto.com/linked/52765/bitcoins-intrinsic-value-rem...

Bitcoin Cash looking very responsive of late. Just saying.

Yes I can only think BCH has some degree of price symmetry with bitcoin as the two are similar techs.

Mind you, if you want a btc fork with gigantic gains look at the cult like surge that BSV is getting

Well there's price symmetry with most of the major alts with Bitcoin. XRP movements are the least "spectacular." Craig Wright's association with BSV spooks me a little.

Tesla up to $525 per share, Musk gets approx $1B if it gets to $553

I've been saying for some time that Akld building consents will drop away at some point. I thought it would be by August/September last year, it's now appearing to be weakening. As you say David, November figures supported a bit by a couple of big developments.
But lets' see 3-4 months of data before making any big conclusions.

If it’s a genuine dip kiwibuild should play a role in setting a floor on building activity so we don’t repeat the mistakes of the past.

ASB said the data supports another RBNZ rate cut. No-one thinks it supports improving economic growth in 2020.

Exactly: there is no money in expectations dependent monetary policy, other than casino economic outcomes - leveraged bets on non-GDP qualifying collateralised financial asset speculation, which primarily encompasses 60% of bank lending for one third of households. No wonder the NZ Government 10 yr yield reflects a pending liquidity premium crisis.

Magic Talk.
The new school syllabus.

https://www.newshub.co.nz/home/politics/2020/01/james-shaw-clashes-with-...

High mark's for petulance.
Sounds like it's a continuance of this.
https://genless.govt.nz/
.

This new syllabus about climate change has all sorts of hints & life hacks.

https://www.recipes-news.co.nz/news/2020/1/14/climate-change-teaching-re...

Beef + Lamb New Zealand is concerned with the new climate change teaching resource published by the Ministry of Education. The resource, Climate Change: Prepare Today, Live Well Tomorrow, aimed at level 4 teachers, makes specific recommendations to ‘eat less meat and dairy’.

Another puzzling recommendation in Climate Change: Prepare Today, Live Well Tomorrow is to go to ohmyveggies.com for meat-free recipe ideas. Beef + Lamb New Zealand fully supports increasing fruit and vegetable consumption, but questions why children are directed to a USA-based vegetarian website rather than using Kiwi organisations like 5+ A Day or vegetables.co.nz that could provide local, seasonal advice to New Zealanders.

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