Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
There are no changes to report today.
DEPOSIT RATE CHANGES
No changes here either.
'A SUMMER DIP'
The January ANZ job ads series took a pause for breath in January but remains very strong. ANZ says "job ads dipped -0.2% in January (seasonally adjusted) to be +19.6% higher than a year ago (3-month average). This is the strongest annual growth since late 2011. After 16 consecutive increases, it is hardly surprising to see job ads take a small breather. The strength of job ads still flags very strong demand for labour. Auckland is the strongest of the main centres. Wellington job ads appear to be flattening off, while Canterbury job ads are easing in line with the rebuild effort." The vacancy rate is at its highest-ever in this survey.
HARD TO BEAT
The NZ Super Fund returned +13.2% in the 2016 (after costs, but before NZ tax). The Fund finished 2016 at a new high for the year-end of NZ$32.7 bln. Since inception in 2003 the Fund has returned 9.9% pa. Based on current portfolio settings, weighted towards growth assets, in keeping with its inter-generational objectives and long investment horizon, the Fund is expects to generate an average return of between eight and nine percent per annum over the long term. Few KiwiSaver fund managers have matched this.
FROM ACTIVE TO PASSIVE
According to Hudson’s Talent Insights research of more than 1,500 professionals in New Zealand, 46% of employees now consider themselves to be passive job seekers who are open to opportunities, up from 35% in the second half of 2016.
A GOLDEN RESULT
Australia posted a large trade surplus for December today, almost twice what the markets were expecting. In fact, it was an all-time record. More than a third of the surplus related to "non-monetary gold", a consistently large contributor to their trade balance data. This result won't hurt the Aussie credit rating. It also gave its currency a boost.
OFF THE BOIL
Building approvals for housing fell -3.4% in 2016 in Australia, a sharp turnaround from the almost +15% rise the previous year. The apartment sector bore most of the brunt, but even approvals for houses were lower.
WHOLESALE RATES IN TRANSITION?
The story today is the turn in the 90 day bank bill rate. It is up another +2 bps today to 2.02%. The lowest this got to was 1.97% on January 24, 2017. Swap rates moved very little today. They are down -2 bps for terms or 2 and 3 years, unchanged for 5 years, and up +1 bp for ten years.
NZ DOLLAR STAYS HIGH
Yesterday's softness following the higher jobless rate has evaporated today as the detail sinks in. The NZD is now at 73 USc. On the cross rates, we are down to 95.4 AUc on their good trade result, and at 67.7 euro cents. The TWI-5 index is back up to 78.2. Check our real-time charts here.
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10 Comments
The NZ Super Fund returned +13.2% in the 2016 (after costs, but before NZ tax). The Fund finished 2016 at a new high for the year-end of NZ$32.7 bln. Since inception in 2003 the Fund has returned 9.9% pa. Based on current portfolio settings, weighted towards growth assets, in keeping with its inter-generational objectives and long investment horizon, the Fund is expects to generate an average return of between eight and nine percent per annum over the long term. Few KiwiSaver fund managers have matched this.
According to some it's a bit of a struggle over the long term.
In their lifetime, 58% of equities fail to beat Treasury bills
Arizona State Professor says a few stocks create most returns Read more
And yet,
The S&P 500 Price index returned 9.84% in 2016 – and that is the number you’ll see quoted most often in the press. However, a more extensive calculation including dividends reveals that the true 2016 S&P 500 return was roughly 12.25%. Read more
And , from our great moments in world diplomacy file ; the Australian prime minister was chatting with US president Donald Trump today ... when it seems that the prez was fuming about Malcolm Turnbull's insistence that the USA honour an agreement to take 1500 refugees off Australian detention centres ...
... and the prez , having had his worst call of the day ( Vlad " the impaler " Putin was much more full of hilarious fun and jolly japes ) ... decided to fire the Ozzie leader by hanging up on him ...
" .... ahhhh ... Don ? ... Donald ? .... Mr President , are you still there ? .... sir ???? ..... "
Malcolm in the Muddle.
http://blog.dilbert.com/post/156711454356/president-trump-and-the-other…
Being a lawyer, and ex Goldman Country head & politiian, he may have fancied himself against the property developer - Oz is full of them he thought.
P.S.
The blog post comments are a good read.
Australia posted a large trade surplus for December today, almost twice what the markets were expecting. In fact, it was an all-time record. More than a third of the surplus related to "non-monetary gold", a consistently large contributor to their trade balance data. This result won't hurt the Aussie credit rating. It also gave its currency a boost.
I wonder if this outcome has a relationship to this news release.
Inflation across the world is beating analysts’ forecasts even before the potential effect from Donald Trump’s economic policies. The global Citi Inflation Surprise Index, which measures price surprises relative to market expectations, is at the highest in more than five years. The reading turned positive in December -- meaning inflation data were higher than expected -- for the first time since 2012. Read more
Other factors affirm an expectation of future demand is creating it's own demand dynamics today.
Since the crack spread is the wholesale price of gasoline above the wholesale price of oil, there was clearly a sense that demand for gas would outstrip demand for oil. Then, like now, it was believed that the overall economy, particularly consumer spending, was about to become robust, sharply accelerating in the close aftermath of QE3 (and 4). Like manufacturing PMI’s, there was a “sentiment premium” that in review was so clearly unjustified, but was dubious to begin with.
From that basis for comparison, crack spreads remaining high throughout this “reflation” period might make some sense normalized to these sorts of expectations. Refineries are essentially inviting energy flow to gasoline in anticipation that consumers will buy it, and buy a lot of it (given the record high starting point of inventory). Like the rest of “reflation”, however, that remains all in the future rather than as current reality. And so, like the near-recession conditions of last year, all that gasoline goes into storage awaiting either the expected robust economic rebound, or the “unexpected” if regular disappointment and all the adjustments that must follow, including much less oil being diverted from current storage into gasoline refineries and inventory.
The oil market as a whole remains, to my view, hedged far more to the latter possibility no matter how much wholesale gasoline prices might diverge. Read more
Whatever Aussie interest rate traders remain unperturbed.
Interest-rate traders are clinging to expectations the Reserve Bank will be on hold for at least a year, even after iron ore climbed about 50 percent over the past three months to levels last seen in 2014. Read more
The world should take note, because the real end game for central banks will come when they are constrained by rising inflation in a weakening economy. We all know what happened after the 1970s stagflation; and hiking rates to 20 per cent in an overleveraged world is a lot harder than it was back then.
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