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A review of things you need to know before you go home on Friday; no retail rate changes, MBIE under the auditor microscope, power prices up, distrusted brands, gold's slide steadies, swaps up, NZD slips, & more

A review of things you need to know before you go home on Friday; no retail rate changes, MBIE under the auditor microscope, power prices up, distrusted brands, gold's slide steadies, swaps up, NZD slips, & more
ID 22702269 © Daniaphoto | Dreamstime.com

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes to report here today.

TERM DEPOSIT RATE CHANGES
No changes to report but more rate cuts are coming Tuesday.

SOMETHING SMELLS?
The Auditor-General is opening an inquiry into aspects of the Strategic Tourism Assets Protection Program. They will be looking into the clarity and transparency of the Program’s criteria and whether they were applied consistently. "Because of the concerns we have heard, the amount of public funding involved [$290 mln], and the importance of robust processes to ensure public trust and confidence is not eroded," a full inquiry is needed they say.

IMPROVEMENT
Fitch Ratings has revised Fonterra' credit rating outlook to 'Stable' from 'Negative' and affirmed its Long-Term Issuer Default Rating at 'A'. It cited "significant progress" in refocusing on where it has competitive advantages.

POWER PRICES UP
Wholesale electricity prices are rising. In fact, this week they have reached their highest level in more than two years.

WHAT WOULD NZ SHOW?
We often get those spruiky "trusted brands" surveys designed to extract marketing money from the 'winners'. But we don't often see those at the other end of the scale, the "distrusted brands". But in Australia, Roy Morgan has revealed them for 2020. Over there, the most distrusted brands are the tech companies, headlined by Facebook, and interestingly the Murdoch News organisation. (Murdoch's nemesis, the ABC, is one of the most trusted brands however.) Also on that list, perhaps unsurprisingly, is miner Rio Tinto. And Westpac. They noted that NAB fell out of this rogues list and by some margin, making good gains says Roy Morgan.

SHOPPING PULLBACK
Retailers might be high on the Aussie 'trusted' list, but retail sales hit a bump in the road in December according to official data. Retail sales volumes rose +2.5% in the December quarter but turnover fell -4.1% in December from November. That trimmed the previously reported stellar gains to +9.6% year-on-year.

SLIDING
The afore-mentioned NewsCorp issued a trading update today, reporting lower revenues and higher profits. Revenues however were sharply lower in its "News Media" segment by -29%.

GOLD PRICE DOWN FURTHER
Gold is trading in Australia, and soon in Asian markets. So far today it is down another -US$29 from this time yesterday to US$1796/oz. That is above where it ended earlier in the New York and +US$9 above the afternoon London fix. In NZD terms, that is a -25% fall from its peak in August, although it is still above year-ago levels in local currency.

EQUITIES UPDATES
The S&P500 ended its New York session up +1.1%. In late afternoon trade, the NZX50 Capital Index is little-changed and heading for a -1.3% retreat for the week. The ASX200 is up +1.0% in early afternoon trade and heading for a weekly +3.4% rise and recovering all and a bit more of the prior week's dump. At its opening, the very large Tokyo market is up +1.2% and heading for a weekly gain, but only back to the 2-week-ago level. Hong Kong is up +1.3% but not quite enough yet to recover the prior week drop. Shanghai is also up but only +0.9% but not enough to make up even half of last week's fall.

SWAP & BOND LONG RATES JUMP YET AGAIN
Yesterday, long rates moved up sharply. We don't have today's swap rate movements yet. If there are material changes when the end-of-day swap rates are available, we will update them here. But we don't anticipate much change today. The 90 day bank bill rate is unchanged at 0.28%. The Australian Govt ten year benchmark rate is down -2 bps to 1.20%. The China Govt ten year bond is up +3 bps at 3.26%. And the New Zealand Govt ten year is unchanged at its sharply higher level of 1.38% and above where the earlier RBNZ fix was, at 1.37% (up another +2 bps). The US Govt ten year is down -2 bps at 1.13%.

NZD RETREATS
The Kiwi dollar is now at 71.5 and a fall back of more than -½c since this time yesterday on a USD rise. On the cross rates we are a tad lower against the Aussie at 94.2 AUc. Against the euro we are little-changed at 59.8 euro cents. That all means our TWI-5 is down to just under 73.6.

BITCOIN SOFTENS
The bitcoin price is now at US$36,812 and a -3.9% fall. It is heading for a weekly gain of +8.2%.

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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End of day UTC
Source: CoinDesk

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16 Comments

Can more of these be built to help the housing crisis's? Supermarket and big box stores are within easy walking distance.
https://www.rnz.co.nz/news/national/435842/applicants-wanted-for-200-000...

Interesting.
When I wrote to.Megan Woods last year about the idea of leashold housing last year she dismissed it.
She said there isn't market demand for it.

The forerunner of feudalism?

In Auckland even the kiwibuild $650k would be an absolute bargain (particularly in some areas) but they aren't even bothering to build those.

"TERM DEPOSIT RATE CHANGES
No changes to report, but more rate cuts are coming Tuesday."

Now why would that be, given all the rosy stats we've had this week?
Banks trying to push those with investible cash further down the yield curve to lock in good longer term funding? More desperate measures to make those with savings, spend them on something; anything? Or maybe the much published, and prayed for, system saving INFLATION!!! isn't really coming after all? I'll plump for the latter.

Where is there no inflation?
The reason they will continue to cut TDs is they need the borrowing rate to increase at a steady rate or it's negative equity for the last ones through the door...

GameStop is down -42.11% closing the day at USD$53.50

The trading session was dominated by retail selling. Of the approximately 62.4 million shares/contracts traded today:
30 Trades of 10,000 shares or more
5 Trades of 20,000 shares or more
1 Trade of 50,000 shares or more

Nickle & Dime Trading was the market mover on the day. Hedge funds seemed content to sit on the sidelines and let retail traders eat themselves. Ammunition is getting cheaper each trading session and it's only a matter of time before short contracts come due.

The share float is still the same, so buyers today were certainly getting a lot more for their money than a week ago. Both sides of the GME trade have their complaints.. but the market always speaks; giving the "Day's Range" of USD $53.33 - $91.50

The audit of the strategic tourism fund is good news. There are recipients on the list that could easily have tapped the wealthy owners for support rather than taxpayers. To receive the funding those particular recipients have made false declarations.

I believe a proper deterrent would be jail time. A bit like a beneficiary would get for ripping the taxpayer off for hundreds of thousands via false declarations.

They wont pay it back until they are named, and shamed.

Some of those companies are spending a lot of money on pay per click advertising, and whatever they got will never be enough if they behave like that. Instead Google will be the real winner.

meanwhile hidden away - we are starting to accept refugees again -- despite the chronic shortage of MI spots for returning Kiwis, terminally ill Kiwis , workers in significant skill shortage categories -- but hey if you are a Wiggle or a Refugee all good bro

https://www.msn.com/en-nz/news/national/the-right-thing-to-do-greens-del...

Ridiculous.

Further evidence that our finance minister is a fool:

https://i.stuff.co.nz/national/politics/300223358/reserve-bank-repeatedl...

CYA propaganda.

?

CYA (cover your ass). I assume the reference is to Orr CYAing.

Thanks for the translation of Audaxe's cryptic mutterings.