Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
There are no changes to report today.
TERM DEPOSIT RATE CHANGES
Only the Police Credit Union trimmed TD rates today.
POPULATION SCENARIOS
New Zealand’s population could hit 6 million by 2050, or it could reach this milestone sooner depending on migration and birth rates, Stats NZ said today. However lower projected birth rates and an ageing population mean the population may not reach 6 million for about 20–30 years. It will get there in 2043 if our historic cyclic migration patterns return - or a decade earlier if we maintained high migration levels. With zero migration we may never reach 6 million.
70 YEAR LOW
Another Stats NZ report shows that home ownership levels continue declining, especially for younger people. Summary here.
JOHN KEY II
Prime Minister Jacinda Ardern says 'sustained moderation' remains the Government's goal when it comes to house prices, as people 'expect' the value of their most valuable asset to keep rising.
THE NEGATIVES FADE
Rabobank released its quarterly farm confidence survey for December today. Confidence is now at its highest level since late 2019, however, it remains at net negative levels overall. Dairy, sheep and beef farmers are now more optimistic about the prospects for the broader agricultural economy while horticulturalists are more pessimistic. Farmers with a positive outlook cited demand and overseas markets as the key reasons for optimism, while government policy and COVID-19 remain the key concerns for those with a negative outlook. Farm business performance expectations were up overall, driven by a strong jump in dairy farmer optimism about the outlook for their own operations. Farmers’ investment intentions were up across the board with horticulturalists continuing to hold the strongest investment plans.
AUSSIE CONFIDENCE ENDS YEAR ON A HIGH
In Australia, both businesses and consumers are increasingly confident about their prospects. Business conditions and confidence rose in November, continuing to suggest a rapid rebound in the economy as restrictions are eased and state borders open up. Consumers surveyed show that their current confidence is now higher than a year ago.
WIDER PUNISHMENT OF AUSSIE BEEF EXPORTERS
China has widened its ban on beef imports from Australia to a sixth supplier. And this time they have chosen one of Australia's largest beef exporters to China. In addition, we came across this notice on the Chinese Customs website pertaining to food imports from New Zealand. Can any reader explain its relevance?
STEELSANDS CREDIT UNION COMPLETES TAKEOVER OF NEW ZEALAND EMPLOYEES CREDIT UNION
A transfer of engagements of the New Zealand Employees Credit Union (NZECU) to Steelsands Credit Union, under the Friendly Societies and Credit Unions Act, has been completed. This is effectively a takeover of NZECU, which will cease to exist, by Steelsands. NZECU was in breach of its capital and related party ratios and thus subject to an Event of Review and Event of Default called by its supervisor, Covenant Trustee Services Ltd.
GOLD PRICE FIRM
In Asian trade, the price of gold has risen +US$2 from the ending New York price and is now at US$1864/oz. The New York price ended at US$1862/oz and was +US$2 higher than the afternoon London fix.
EQUITIES UPDATE
Wall Street ended its session today lower by a minor -0.2%. The ASX200 is trading up +0.3% in mid-day trade while the NZX50 Capital Index is up +0.6% near the end of today's session. Meanwhile, the very large Tokyo market has opened down -0.3% in early trade. Hong Kong has opened down -0.4% while Shanghai has opened up +0.3% in early trade today.
SWAP & BOND RATES IN MINOR SLIP
We don't have todays swap rate movements yet. If there are material changes today when the end-of-day swap rates are available, we will update them here. The 90 day bank bill rate is up +1 bp today at 0.27%. The Australian Govt ten year benchmark rate is down -4 bps at 1.02%. The China Govt ten year bond is down -1 bp at 3.31%. And the New Zealand Govt ten year is down -3 bps at 0.94% and matching the earlier RBNZ-recorded fix of 0.94% (unchanged). And the US Govt ten year is down -4 bps today to 0.93%.
NZD HOLDS
Against the US Dollar, the Kiwi dollar is unchanged from this time yesterday at 70.4 USc. On the cross rates it is up marginally against the Aussie to 94.9 AUc and against the euro we are unchanged at 58.1 euro cents. That all means our TWI-5 has hardly moved from this time yesterday at 72.5.
BITCOIN HOLDS
Bitcoin is now at US$19,222 and lower by a minor -0.6% from this time yesterday. The bitcoin rate is charted in the exchange rate set below.
This soil moisture chart is animated here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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39 Comments
The 2020 edition of Ratepayers’ Report confirms that Auckland Council is charging the second highest rates in the country, with an average bill of $3,469 per rating unit. Hamilton City Council’s rate bills are more than $1000 cheaper than Auckland’s. In fact, Grey District Council and Central Otago District Council get by charging half what our Council does
So why are council services costing Aucklanders so much?
2831 Council staff are paid more than $100,000 – that’s 26 percent of all staff, compared to an average of 14 percent across all local councils. And the Council has been spending $830 per household just paying down the interest on its debt
Pretty good read!
Finally the NZX50 Capital Index is up a healthy +0.6%. I've now made more than twice as much on my ETF in two weeks than I would have in a whole year as a term deposit. Could change tomorrow of course or even by the end of today.
I was surprised to get a dividend and not a bad one after only holding the shares for a week. I didn't know it doesn't make any difference how long you have had the shares as long as you have them the day before pay day. Apparently shares often go down in price by the value of the dividend paid out although I haven't seen that happen yet.
2020 earnings down on 2019 (https://nz.finance.yahoo.com/quote/MCY.NZ/financials?p=MCY.NZ) so yield possibly. But then non-cyclical stocks can outperform during economic down turns..
https://www.investopedia.com/articles/00/082800.asp
Non-cyclical stocks repeatedly outperform the market when economic growth slows.
Non-cyclical securities are generally profitable regardless of economic trends because they produce or distribute goods and services we always need, including things like food, power, water, and gas.
Pinocchio Ardern gets a not-too-brutal sacking from the people over at Macrobusiness. Some interesting comments, particularly about the general disdain for poor people.
https://www.macrobusiness.com.au/2020/12/runaway-nz-house-prices-expose…
Throughout history, housing markets that are doing what ours is currently doing all crash and burn. They higher they go, the higher the probability of a large crash. View the history of any/all property markets globally over the last 200 years (or read the Real Estate section of Irrational Exuberance by Robert Shiller and you might understand).
Sometimes its better to just be ignorant I guess then there's nothing to worry about eh...
I don't even understand what that means. Didn't you sell your house because you thought the market was going to crash? (how does that work if you're attempting to destroy my street cred on a site like this...I actually find that quite funny because I couldn't care less what other people think about a persons 'credibility' - see Taleb's 'Fooled by randomness' if you want to see the stupidity of 'credibility' in guessing the future)
by Ocelot | 8th Dec 20, 12:19pm
I think using the household stat is very deceptive. I live in an owner occupied house as a boarder, so I'm included in the owner occupier stat. I think this article from 2014 shines a light on the true situation.
https://www.interest.co.nz/property/69025/census-figures-show-home-owne…
Home ownership by adults fell below 50% in 2013, and for under 40's fell to 22%.
...the iron law of investing is that a security is nothing but a claim on a future stream of cash flows. Valuation is a crucial determinant of long-term returns. The higher the price an investor pays for those cash flows today, the lower the long-term rate of return earned on the investment..
The corollary is also true. The lower the long-term rate of return demanded by investors, the higher the price moves today. So clearly, changes in investors' attitudes toward risk will strongly affect short-term returns. If investors become more willing to take market risk, it is equivalent to saying that they are demanding a smaller risk premium on stocks (that is, a lower long-term rate of return). Prices rise as a result. Now, the fact that current stock prices are higher also implies that future long-term returns will be lower, but that's part of the deal. Link
David C
I am reasonably sure the China Customs note is simply saying that the 2021 tariff free limit for import of three categories of dairy product from NZ has already been reached by product either in bond or on the water. This will not be a surprise to importers as it happens every year. Importers play the game so as to maximse their own share of the tariff free quota and they do this by having product already registered as either in bond or on the water for the start of 2021. After 2021 these limits for NZ no longer apply.
KeithW
KeithW
The UK administered it's first vaccination against Covid-19 today: https://www.bbc.co.uk/news/uk-55227325
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