A review of things you need to know before you go home on Friday; consumer confidence up, business confidence up more, trade surplus surprise, ATM sinks, swaps steepen, NZD holds, & 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 (although we did update our records for Heretaunga Building Society after having missed an earlier announcement. Sorry.)

TERM DEPOSIT RATE CHANGES
There were none here today either.

UP, BUT WELL SHORT OF NORMAL
Consumer confidence lifted 5 points to 112 in December in the ANZ-RoyMorgan survey, with the current and future conditions indexes lifting by similar amounts. It is edging closer to its historical average of around 120 even if it does have quite some way to go. In a good sign for the retail sector, the proportion of people who believe it is a good time to buy a major household item lifted 7 points.

'MERRILY ON HIGH'
ANZ's December business sentiment survey is much better however. As they say, "Headline business confidence, at 9.4%, is up a whopping 16 points and back in the black for the first time since August 2017. Own activity was 13 points higher, at +21.7%, its highest level since March 2018. Every activity indicator was higher. Inflation pressure is building. Construction is manic. Agriculture, while improving, remains subdued. Manufacturers and retailers are most impacted by supply issues from freight disruptions, while manufacturers report the most difficulty getting goods to customers."

MORE GOOD DATA
Another positive data release today came for the November trade balance. Exports were up from October, imports were down and that resulted in a +$252 mln trade surplus. That is a +NZ$1 bln improvement from the -$786 deficit recorded in November 2019. In fact, trade surpluses in a November is rare and we have only had two previously in the past 20 years. The average monthly deficit over that time is $500 mln, so this year's result is quite special.

FEWER ANIMALS, HIGHER PRODUCTIVITY
The number of beef cattle increased for the fourth year in a row in 2020, while the national dairy herd and sheep flock have both continued to fall in recent years, Stats NZ said today. The number of dairy cows has been falling since 2014 and the number of sheep has been falling since 2006. The remarkable thing is that despite these herd and flock declines, export earnings have been rising from almost all them in a clear sign of improving rural productivity.

GLAMOUR COMEDOWN
Glamour stock A2 Milk (ATM) is back trading after issuing downgraded profit guidance. The share price has fallen from $14.22 on Wednesday and before their trading halt, to now $10.90, a sudden -23% haircut. That will have dropped them from second in capitalisation on the NZX to about sixth. "The effect of the disruption in the daigou channel, which represents a significant proportion of our infant nutrition sales in our ANZ business, has proved to be more significant and protracted than was previously anticipated." Related supplier Synlait Milk has fallen from $5.40 pre- ATM's trading halt, to $4.80 now, an -11% discount.

TAURANGA TO BE GOVERNED BY COMMISSION
The Minister of Local Government, Nanaia Mahuta, has confirmed a Commission will be appointed to Tauranga City Council. The Commission’s term will begin in early 2021 and end at the triennial local authority elections in October 2022. The commissioner appointments will be announced in February.

BACK OVER THE HORIZON
The Sydney pandemic cluster is growing quickly, ballooning to 28 cases in two days. Other states are assessing border restrictions. The prospect of a trans-Tasman travel bubble isn't being helped by this outbreak.

EQUITIES UPDATE
The S&P500 ended up +0.6% in Wall Street trade earlier today while they await Congressional stimulus. Shanghai has opened -0.2% lower, Hong Kong is also -0.2% lower, and Tokyo is flat at their open. The ASX200 is down -0.5% in afternoon trade while the NZX50 Capital Index is up +0.3% near our close ended the week with a late crash and down -2.1% on the day. That means the ASX200 is heading for a weekly gain of +1.2% while the NZX50 Capital Index is down -2.3% for the week.

SWAP & BOND RATES STABLE
Yesterday swap rate curves steepened with long rates rising. 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 at 0.25%. The Australian Govt ten year benchmark rate is down -2 bps at 0.99%. The China Govt ten year bond is unchanged at 3.32%. And the New Zealand Govt ten year is up +1 bp at 0.97% and still above the earlier RBNZ-recorded fix of 0.95% (+3 bps). The US Govt ten year is unchanged at 0.93%.

NZD HOLDS
Against the US Dollar, the Kiwi dollar is up at 71.5 USc. On the cross rates we have held soft against the Aussie, now at 93.9 AUc and against the euro we are also little-changed at 58.3 euro cents. That all means our TWI-5 is now at 72.9 and very little different from the week-ago 72.8.

MORE BITCOIN FOMO SURGING
Bitcoin is now at a new record high of US$23,059 and up another +6.3% from this time yesterday. For the week it is up a massive +US$4,700 or +25.6%. 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 ».