A review of things you need to know before you go home on Monday; no retail rate changes, active credit cards, but lower balances, Hawkes Bay region shines, UK mutation gets closer, swaps hold, NZD softer, & 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
There were none here today either.

MORE SPENDING, BUT LOWER BALANCES
Credit card balances are now -12.4% lower in November 2020 than in November 2019, continuing the atrophy we have been seeing in this market. It is assumed that BuyNow/PayLater schemes are largely responsible. However, transactions running through these credit car accounts were up +4.3% year-on-year, the fastest growth since August 2019. Now, less than 57% of all balances incur interest, a record low. These trends will annoy banks (who pay tax) because it is the core reason they are in this business, but it won't annoy Visa or Mastercard (who cleverly avoid paying any tax in New Zealand) because they clip the merchant transaction fees and shelter all those earnings in Singapore.

LOWER LAKE LEVELS
Hydro lake storage and lake inflows are falling below long-run averages now. Auckland's drinking water reservoirs are now just under 71% full, a fairly static level. These dams supply 54% of the current use, the Waikato River 40%, and the other 6% comes from local aquifers.

BEFORE THE $100,000 FREE MONEY ISSUE
The Department of Internal Affairs has issued a penalty of $30,000 to Greenback Ecommerce Limited (trading as The Safety Warehouse) for breaching the Unsolicited Electronic Messages Act 2007. The Safety Warehouse was investigated after DIA received complaints from the public about receiving unsolicited commercial SMS text messages. These SMS messages took advantage of the second COVID-19 outbreak to sell face masks and failed to provide an unsubscribe facility. This is not the first time enforcement actions have been taken against The Safety Warehouse.

THE SUN IS SHINING BRIGHTLY IN THE HAWKES BAY
Westpac's regional confidence survey shows regional economic confidence bounced higher over the December quarter. Optimists now outnumber pessimists in most regions of the country. Households in Gisborne/Hawke’s Bay, Taranaki/Manawatu-Whanganui, and Nelson/Marlborough/West Coast are the most optimistic. Households in Northland, Otago and Southland are the most pessimistic.

UNDER REVIEW
Ratings agency AMBest has put Partners Life on review following its agreement to buy the life insurance business of BNZ. Partners Life currently has a rating of A- from AMBest. The $290 mln purchase is a major transaction for Partners Life, a company with a shareholder fund of $154 mln. It seems likely that the company will seek to list in the foreseeable future.

HUGE DOWNGRADES
Synlait Milk (SML) has had to halve its 2020/2021 profit guidance following the A2 Milk (ATM) downgrade. ATM is a cornerstone investor in SML and a key customer and SML now expects their demand in the new year to fall by -35%. ATM's downgrade took -$2.2 bln off its capitalisation last week alone, and from its peak on October 16, it is a -$3.5 bln drop. SML's capitalisation is fallen -$100 mln from early October until now.

VISA EXTENSIONS TO ALLOW MIGRANTS TO FILL LABOUR SHORTAGES
The Government has extended many working visa conditions and these changes have been welcomed by industry, especial the rural industries. They include a six month extension for employer-assisted work visa holders, postponing the stand down period for low-paid Essential Skills visa holders, retaining the 2019 median wage of $25.50 per hour for immigration settings until at least July 2021, and extending the Working Holiday visas by 6 months.

SPLIT FORTUNES
Data released by the RBNZ for the year to September for the insurance industry shows that their investment earnings halved to $736 mln, compared to the $1.45 bln in the same period to September 2019. Life insurers saw their premiums fall a massive -19% over this period while for general insurers, premiums rose +1.8% in this period.

WORRYINGLY CLOSE NOW
The NSW Health Department is reporting that travelers incoming from England into their hotel quarantine facilities are testing positive for the British super strain of COVID. (No-one in their Avalon Beach community outbreak has that; they have the US strain.) Official NZ notes are here.

UNDERWAY
In the US state of Georgia where there are two unusual Senate election races underway, early voting has begun. And so far 1.1 mln people have voted out of the expected almost 5 mln. The turnout so far exceeds that for the November General Election at the same stage. Results will be known on January 6, 2021 (NZT) and will determine the US Senate makeup.

EQUITIES UPDATE
The NZX50 Capital Index is down -0.3% in late trade today. The ASX200 down -0.5% in early afternoon trade. The Shanghai exchange has opened down -0.1%, Hong Kong has also opened down -0.8%, and the large Tokyo exchange has opened down -0.7%. The S&P500 futures index suggests Wall Street will open lower after rising +1.1% last week.

SWAP & BOND RATES MOVE IN TIGHT RANGES
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 up +2 bps at 0.27%. The Australian Govt ten year benchmark rate is down -1 bp at 0.98%. The China Govt ten year bond is also -1 bp lower at 3.31%. And the New Zealand Govt ten year is down -2 bps at 0.955% and very similar to the earlier RBNZ-recorded fix of 0.96% (+1 bp). The US Govt ten year is the same at the opening rate this morning of 0.94%.

NZD SLIPS
Against the US Dollar, the Kiwi dollar is down at 71 USc and nearly a -½c fall from where it was at the start of business today. On the cross rates we have also fallen against the Aussie although not be as much, now at 93.5 AUc. Against the euro we have dipped to 58.1 euro cents. That all means our TWI-5 is now at 72.5.

MORE BITCOIN FOMO
After hitting US$24,273 earlier this morning (NZT), the bitcoin price is currently US$23,738 and close to that high. The current price is almost the same as where it opened here this morning.

This soil moisture chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».