US Q3 growth up, Q4 looks less strong; Vancouver house prices face cliff; China cities clamp down; Uber test ends; oil up, gold unchanged; NZ$1 = 69.1 USc, TWI = 75.9

US Q3 growth up, Q4 looks less strong; Vancouver house prices face cliff; China cities clamp down; Uber test ends; oil up, gold unchanged; NZ$1 = 69.1 USc, TWI = 75.9

Here's a special holiday update of some key events and data you may want to know about today.

Firstly, the American economy grew at a +3.5% rate in the July-September quarter, a revision higher and the fastest pace in two years. But the growth spurt isn't expected to last.

In fact, consumer spending increased only modestly in November as household incomes failed to rise for the first time in nine months, perhaps confirming their economy has slowed in the fourth quarter.

And their November advance durable goods orders report came in quite weak, although about what was expected.

In Vancouver, they are facing a "double-digit decline" in house prices in 2017, according to one local market analyst. This follows years of exuberant price growth.

In China, two more major cities in central China have tightened housing purchase restrictions in the latest bid to rein in rising house prices.

We should also note that Uber has had its self-driving car test terminated in San Francisco. This came after strong opposition from the California state regulator. At the same time, the Norwegian government aims to pass a law in the spring of next year to allow testing of self-driving vehicles on Norwegian roads.

In New York, the UST 10yr yield is unchanged overnight at 2.55%.

The US benchmark oil price is a little higher and now at US$53 a barrel, while the Brent benchmark is up to US$55. 

The gold price is unchanged at US$1,131/oz.

The New Zealand dollar has changed little in the past 24 hours and is now at 69.1 USc. On the cross rates it is stable at 95.8 AU¢, and 66.1 euro cents. The TWI-5 is still at 75.9.

The easiest place to stay up with event risk over the holiday period is by following our Economic Calendar here »

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27 Comments

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If the report is correct than it does proves that overseas buyer tax is important and most damage is done by foreign buyer specially in Tax Heaven places like NZ.

Vested corrupt interest prevented nats government in accepting the fact known to one and all.

No way national is coming to power next election.

You're a victim of "fake news" I'm afraid. At first glance this article looks like it is a fact that Vancouver house prices have dropped by double digits. Yet it is only a forecast for next year and so "proves" nothing at this stage.
The forecast is pretty vague and moderate:

“If it’s not double digit, it’ll be close to it.”

It is even possible that prices will go up accrding to the article:

Interest rates, housing supply, foreign demand from China, the exchange rate, as well as the province’s new interest-free loan program for qualified first-time home buyers announced last week, are all factors that could affect real estate prices in Vancouver, even tip the playing field in favour of a price increase.

“I’m not ruling it out,” Davidoff said

Valid point ZS, I too was disappointed after reading the headline, that the actual article was just a prediction. However.. there is no question we need to take action here, even if offshore buyers are not a big force right at the moment. What we know:
1. Massive amounts of money has and will be trying to leave China
2. They love property as an investment
3. They are very active in markets all over the world, most of which have more barriers/taxes and disincentives. We have nothing. No stamp/land or capital gains tax, no ban on existing homes. Lax anti money laundering rules and disclosures.
There is no question they have had and will have a massive effect on prices going forward. It is fresh money going into the ponzi, which only needs to be a tiny percentage of total sales to have a massive impact. Articles like this "fake news" with predictions of prices in Canada can be a distraction, but it if keeps the conversation pointed towards the real issues then on balance they are probably still positive

and dont think that china cant go bust,korea did in 1997 and they had been buying up large in auckland and rotorua but after their economy fell off a cliff many of them went broke and had to go back.

Look Vancouver's property sales are massively down and their property prices are dropping. Zachary you can't keep denying what's happening and accusing everyone of posting fake news links that's just silly.

I know you're worried and probably scared like a lot of the current Estate Agents and Investors but the global market is changing and it's affecting NZ too.

Here's some further evidence of what's happening in Vancouver and they do comment on prices dropping this was the state of the market in September since then sales have continued to slide. "An average-priced detached home throughout Greater Vancouver now costs $1,470,265, compared to $1,764,682 in July".

Canadian Huffington Post: http://www.huffingtonpost.ca/2016/09/02/vancouver-detached-home-price-cr...

Remember their new taxes have only recently been introduced for Foreign buyers and the Empty Home tax.

Closer to home; we're starting to see the effects of China restricting Capital Flight, that's very much effecting lack of demand our housing market, hence the big drop in recent auction results.

Financial Times: China to clamp down on outbound M&A in war on capital flight
https://www.ft.com/content/2511fa56-b5f8-11e6-ba85-95d1533d9a62

There's always a bigger picture Zachary.

Look CJ099 I am merely pointing out that the content of the article doesn't match that alarmist headline. The price drop they are predicting is surprisingly moderate. People will rub their hands in glee thinking about the impending calamity and may not read the actual article. The article would be disappointing for such people but quite comforting for me.

You will notice that I make no absolute claims. Deceptive news is fake news as far as I am concerned and I stand by my claim here.

I am not sure I can take seriously someone who reads the Huffington Post tbh.

I'm sure the same headlines will appear in the FT and BBC before long. :)

That may well happen but right now the facts don't warrant it and it remains speculation. News outlets are notorious for having headlines that don't match the content of the article. It just amuses me that they fell into the trap of accusing others of fake news. Truly LOL.

Ooh, You are grumpy today Zachary. Perhaps this will cheers you up: BBC Quiz: Can you spot the fake stories?
http://www.bbc.com/news/magazine-38005844

Sadly none property related. ;)

You're absolutely right Zach, I hate the headline sensationalism (and frankly misleading headline). I like facts to base my business decisions on. (although several commentators on this site have an opinion, then pick and choose the articles to support their view)

Overseas news is irrelevent to New Zealand. The negative press on housing continues with no basis or fact.

Again rubbish.

After 2007, unsecured overnight lending has been far more of a dream than anything of operational concern, thus the vastly increased relative importance of secured wholesale finance, i.e., repo. To get from fed funds targeting to repo is not an easy leap, particularly since we are again introducing the discrepancy of dollars vs. interbank currency (where it is often difficult to discern which one is more money-like at any one point in time).

Officials plan to use the rate of interest the Fed pays on excess reserves deposited at the central bank as the “primary tool used to move the federal funds rate into its target range” while “temporary use” of the overnight reverse repo facility will be employed to “help set a firmer floor,” according to the July FOMC meeting minutes.

The reverse repo program was supposed to provide “aid” toward establishing a hard(er) floor for rates. It obviously failed with the persistent spikes in repo fails, which denote effective repo rates at something between 0% and -3% (and closer to the latter than the former). Collateral, that interbank currency, is not getting out of the Fed “silo” (its vast SOMA holdings) to conduct business as needed.

“If we can move those three rates in tandem, then I think it will be pretty clear signaling to markets as to where the Fed stands and where short-term interest rates stand,” Bullard said. “We’ve never done this before, so we don’t know exactly how it will work, but I do think that we are in pretty good shape.” [emphasis added] Read more and more and more

Such is the demand for current end of quarter collateral daily GFC repo rates for UST have fallen below the RRP 50bps fed funds rate corridor to 44.8bps. View GCF rates table

The media gives total deference to the power of the Federal Reserve and its policy, but there is less and less evidence for it. Read more

The US markets only effect shares. The US housing market was bad with keys handed back but now it is rocketing upwards. New Zealands housing continued to rise regardless.

[Facepalm]

It is what it is, but is this paring the emperor back to the bone?

The Chinese government is a despicable, parasitic, brutal, brass-knuckled, crass, callous, amoral, ruthless and totally totalitarian imperialist power that reigns over the world’s leading cancer factory, its most prolific propaganda mill and the biggest police state and prison on the face of the earth.

https://www.theguardian.com/world/2016/dec/22/brutal-amoral-ruthless-che...

Nothing like a real game of 500.

Excellent. After years of taking it, the Empire is about to strike back. Guess a Trade War is better than a World War. Winners and losers? Who knows but the good ole USofA is going to make a game of it for sure.

Crude carrot and stick diplomacy? Read more

Well the last part of that statement is rather hypocritical "biggest police state and prison on the face of the earth". I think you'll actually find that's the US and will probably increase under Trump.

I'd very much recommend that everyone should take a look at this recent main stream documentary called " 13th", This is a very powerful documentary centred on race in the United States criminal justice system and how it's become increasingly commercial monetized.

Here's the film trailer: https://www.youtube.com/watch?v=V66F3WU2CKk

America certainly is not the land of the free!

WOW thanks for the link. 2 incredible statements:
- 1/4 of all prisoners in the world are found in the USA
- The USA have more black people behind bars now than they had black slaves 150 years ago

..depends what you call a prisoner don't it? North Korea could be considered one big open prison... as could many other countries at present.

@Yvil, You're very welcome and there are far more shocking facts in the film that will make your blood run cold regarding the US.

have you seen 'the house I live in'?
https://www.youtube.com/watch?v=MUikHBWjWys

Household credit data released yesterday, now at 245Billion , thats 20B more than last year and 35B more than two years ago. At this rate we should be able to double generations of debt in ten years to 0.5 trillion. Anyone that believes higher interest rates will not crush real estate should run for cover .Anyone believe that DTI will be introduced by Graham.

why do we have ever increasing regulation and countries like China have none? Could it be because of immigration? immigration is the means by which regulatory jobs are created. Because if i'm a civil servant and can invent the "department of bullshit" and I can find a foreigner with plenty of money who is wants to come here and buy my business and pay "bullshit tax", then i have to pay bullshit tax. This is what i don't like about immigration. It creates the opportunity for corruption. This is what is interesting about the Trump presidency he promises to tighten up on immigration and get rid of regulation. (I think they go hand in hand) Futhermore if you speak out against immigration you are labelled a racist.

Frankly it is the global e con omy that will have impact in 2017
The US sharemarket has according to leading US brokers now factored in the Drumpf tax cuts etc based only on his "Fake" promises which change by the second and there would have needed to be something very special announced to see the market hit 20,000 they say.
I do agree that nobody knows what will happen really in Vancouver 2017 but more importantly nobody can predict what the macro changes around the planet will bring in 2017 and big changes are coming for sure. Hence your Forex trader PM decided to exit prematurely, Oh sorry, family reasons wasn't it !?
I agree that it isn't enough to feel safe with a housing portfolio because immigration is up again. Those migrants are highly mobile should world events change.
Keep the positive blurb going Zach.
I'll be in Florida. Merry Christmas to NZ ****