A review of things you need to know before you go home on Tuesday; no retail rate changes, confidence up, MM jumps, tractor sales low, eyes on bank dividends, swaps & NZD little-changed, & more

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
None here either.

A QUICKENING PACE I
The Westpac McDermott-Miller consumer confidence quarterly survey for December has reported a strong rebound. With the recovery in activity gaining traction, households are feeling more upbeat about the economic outlook. Spending appetites have also picked up as we head into the holiday season, with a strong lift in spending on entertainment activities. However the rebound hasn't recovered it to the 2019 level and it is still +3.5% lower than that years-ago benchmark. Hawkes Bay is the most optimistic and the biggest improver; Otago is at the other end of the scale.

A QUICKENING PACE II
The November house-price-to-household-income multiple has jumped sharply for a second consecutive month. Nationally median prices are now 7.9 times median household incomes, and far above the pre-pandemic 6.8 times in November 2019 which back then was an all-time high. For Auckland region, these levels are higher again, now at 10.3 times income. In Timaru, house prices are only 4.6 times household incomes.

MOVING NEXT DOOR
HSBC's head office has moved from One Queen Street, to the old PwC building at 188 Quay Street which has been refurbed and upgraded as part of the wider Commercial Bay project by Precinct Properties (PCT).

DE-EMPHASISING MACHINERY INVESTMENT
The number of new tractors being sold continues to fall as farmers pull back on this aspect of their capital expenditure. The year to November accounted for the lowest volume of tractors sold since the GFC (late 2011). Yes, monthly volumes did fall away in the lockdown period, but the decline set in well before that with 19 of the past 24 months recording year-on-year declines.

APRA GREENLIGHT FOR HIGHER AUSSIE BANK DIVIDENDS
The Australian Prudential Regulation Authority (APRA) will no longer hold banks to a minimum level of earnings retention, clearing the way for bank dividends from the Aussie parents of NZ's big four banks to ramp up. Prior to this move, and against the backdrop of COVID-19, APRA had said banks could pay out up to half their earnings in dividends. APRA did say, however, that the onus remains on bank boards to moderate dividend payout ratios to ensure they are sustainable, taking into account the outlook for profitability, capital and the broader environment. Here in NZ a Reserve Bank ban on bank dividends, since April, remains in place.

MORE EXPOSURE, BUT SAME LEVERAGE
The New Zealand ban on bank dividends has raised the investment shareholders have in their New Zealand banking operations by +7.3% in one year, but that hasn't [yet] effectively reduced the leverage these institutions run. Updated details here.

IT IS NOT ONLY JUNK FOOD ...
Aussie regulator ASIC has investigated school banking programs. It found these programs claim to help children develop long term savings habits; however, providers were unable to demonstrate that in and of themselves they improve savings behaviour. They also found payments to schools for implementing school banking programs incentivise schools to encourage greater participation in the programs. Another finding is that young children are vulnerable consumers and are exposed to sophisticated advertising and marketing tactics by school banking program providers. And finally, ASIC said school banking program providers failed to disclose that a strategic objective of these programs is customer acquisition.

TWO-FACED DISPUTERS
Australia's commitment to fighting climate change is in tatters as it moves to defend its shipments of coal to China. China has banned its buyers from purchasing Aussie coal in what almost certainly isn't a GHG-fighting strategy. But Australia is arguing it should have the right to keep shipping the fossil fuel, (and those shipments shouldn't be counted toward its Paris Agreement targets). Neither party has any high ground, but Australia probably is in the weakest position on this one.

LOOKING FOR ANOTHER RISE
There is another dairy auction tomorrow and the futures market suggests another +2% rise for WMP is indicated - in USD. Some analysts suggest it could be more as Chinese demand is strong at present and the USD is weak. (The indications for SMP are similar.)

EQUITIES UPDATE (DOWNDATE?)
The S&P500 ended down -0.4% in Wall Street trade earlier today, falling sharply at the end of their session. Shanghai has opened -0.5% lower, Hong Kong is also lower, down -0.9%, and Tokyo is also lower, down -0.3%. The ASX200 is down -0.4% in afternoon trade while the NZX50 Capital Index is up +0.2% near our close. (It traded without a repeat glitch today.)

SWAP & BOND RATES MIXED
We don't have todays swap rate movements yet. If there are material changes when the end-of-day swap rates are available, we will update them here. The 90 day bank bill rate is down -1 bp today at 0.25%. The Australian Govt ten year benchmark rate is up +1 bp at 0.97%. The China Govt ten year bond is unchanged at 3.33%. And the New Zealand Govt ten year is up +2 bps at 0.875% and now higher than the earlier RBNZ-recorded fix of 0.86% (unchanged). And the US Govt ten year is unchanged at 0.90% although it has been volatile.

NZD HOLDS
Against the US Dollar, the Kiwi dollar is holding up and still at 70.9 USc. On the cross rates we are softer against the Aussie to just under 93.9 AUc and against the euro we are little-changed at 58.3 euro cents. That all means our TWI-5 is still at 72.7.

BITCOIN FIRMS
Bitcoin is now at US$19,346 and up +0.9% 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 ».