A review of things you need to know before you go home on Thursday; A rate trimmed, QV data goes both ways, fewer job ads, Aussie retail up, NZX50 down, swaps up, NZD listless

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

MORTGAGE RATE CHANGES
No changes to report here.

TERM DEPOSIT RATE CHANGES
NZCU Baywide trimmed its >$20K online saving rate to 2.80%. Actually they made this -20 bps change just before Christmas and we missed it then.

AUCKLAND THE LAGGARD
QV says 2017 was a year of mixed sentiment in the residential property market but value increases picked up noticeably post election despite a drop-off in sales volumes. December prices are up +6.6% year-on-year nationally, up only +0.4% in Auckland however on the same basis. On the Hibiscus Coast, and in parts of Manukau they actually fell.

FEWER JOB ADS
ANZ job ads fell in December, the second consecutive small fall. Annual growth eased to +6.1% from +7.7% in November. Job ads are at high levels but have flattened, with growth rates slipping across most regions and sectors. ANZ says they expect wage growth to pick up modestly this year, reflecting both a tight labour market and changes in government policy.

UNEXPECTED UP-TICK
In Australia, retail sales increased by a better-than-expected +1.2% in November, coinciding with a surge in full-time job creation. "Black Friday" promotions and the release of the iPhone X also get a mention.

THUMPING
In thin trading, the NZX50 is down a whopping -1.4% today.  The largest listings are down even more. Overall there are 16 gainers and 83 declines. Some icon names are down more than -3% on the day. The ASX is also lower but their decline is only -0.5% so far. Markets like Hong Kong and Shanghai are up.

US TOO
The NY Times is highlighting a story about the glass ceiling in the economics profession. Women in top positions are rare. So good on ANZ NZ to making Sharon Zöllner their chief economist recently - they are ahead of the field. (Across the ANZ Group, only four of seventeen economists are women.)

WHOLESALE RATES RISE BUT DON'T STEEPEN
Swap rates rose today across the board by +2 or +3 bps. Last night's run-up in UST yields (to 2.58% for the 10 year) has now all been unwound. The 90 day bank bill rate is unchanged at 1.87%. In China, their sovereign 10yr yield is up to at 3.95% (+2 bp). Their two year is unchanged so their 2-10 curve now up at +32 bps. The NZ Govt 10yr yield is up another +2 bps today at 2.87%.

NZ DOLLAR SOFTER
The NZ dollar has slipped today and is now at 71.9 USc. On the cross rates we are at 91.3 AUc and 60.1 euro cents. This puts the TWI-5 down a tick at 74.1. It had been higher but in the past hour or so has given some of those earlier gains back. In contrast, the bitcoin price is now at US$14,441, a +US$250 gain on the day. But since this time yesterday, it got down as low as US$13,474 at one point. Also, see this.

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USD 
NZD
End of day NY time
Source: CoinDesk

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28 Comments

China has lodged a formal protest over comments made by a senior member of Australian Prime Minister Prime Minister Malcolm Turnbull’s government criticizing the Asian nation’s infrastructure-construction policy in the Pacific.

Concetta Fierravanti-Wells, his minister for international development, said in an interview with the Australian newspaper on Wednesday that China had been lending to Pacific ­nations on unfavorable terms and constructing “useless buildings” and “roads to nowhere.”

Chinese Foreign Ministry spokesman Lu Kang said the comments were “full of ignorance and bias,” and his country lodged a protest to Turnbull’s government over the issue. Read more

Naughty Aussies, course everyone knows they are right. Leaky buildings and the debts remain, but China gets it's votes at the UN and it's foot in the door.

Who thinks the NZ based Aussie banks are offering indebted Kiwis fair deals when they repatriate outsize profits back to Australia, while shipping out at risk parent capital resources which Kiwis now fund with their pension plan contributions?

How do you measure "outsized" profits Stephen

A good indicator starts here: ANZ New Zealand boss David Hisco was the fourth highest earner, on more than $4.3m, and moves on to shareholder rewards in terms of share buyback frequency and annual dividend stream value upgrades.

So much depends on the truth don't you think.

All NZ and Australian institutions are now operating with policies which try to avoid transgressing Chinese Government doctrine. Universities are signing 100s of MOUs, Govt Ministries are careful to toe the China line, Our Political parties now have Chinese Govt operatives, large corporations in NZ and AustrLia must comply.
Meanwhile our countries give up their historic human rights values and standards in their pursuit of financial salvation.

Lots of well paid mining jobs in Aussie:
https://www.australianmining.com.au/news/hays-report-shows-renewed-optim...

Didn't Labour prattle on about well paid jobs in the regions? Presumably they were meaning minimum wage jobs making beds for Tourists and Aucklanders. NZ misses out on another mining boom.... The Land of Lost Opportunity.

Mining is evil don't you know. As is even *looking* for oil. And farming.

Anything productive is deeply suspect. Unless the government owns it and then it's a knight in shining armour.

"Its all about control, control of the means of production, distribution and exchange; ie labour, physical and financial capital and land. If we control it then it is good, cos we know what's best for you."

"Er, but I don't want to be controlled, I want to be an independent productive individual in my right."

It's the inescapable conclusion of the collective, the built-in failure of socialism.

It's why it always ends in repression and oppression in spite the best of intentions.

Yawn.

Much better to be controlled by American corporates and bankers who have our best interests at heart

Not just American, we have very little left that is controlled from within NZ, and it is not just American corporations that have us by the short and curlies, but I guess that is how the free marketeers like it. "I'm alright Jack, you can go jump in the lake", would be a perfect motto for them after they have allowed everything to be sold overseas, they pocket the cash then they leave everyone else behind them struggling to even get so much as a home to call their own. If you don't believe it, open your eyes and look around.

RW,

And just what 'mining boom' are you referring to? Coal? How many jobs would this 'boom' actually create and at what cost to the environment?
And I thought you were quite intelligent-my mistake.

According to Wikipedia, in 2006 the Australian mining industry provided 129,000 jobs and represented 5.6% of GDP and 35% of exports by dollar value.

They are asking about NZ. Australia has been known as the lucky country for the mining resources it possesses. Unfortunately NZ has very little in comparison.

I don't believe that this is comment is very correct if the comparison is made on a per capita or area of land comparison. eg. Absolutely heaps of coal down in Southland. Quite a bit of gold around the place. Gas here and there.

The legacy of the previous National Govt and their sinking lid funding policies is still having an effect on many of our public institutions- including hospitals, schools, Polytechnics, Universities etc
https://www.radionz.co.nz/news/national/345328/polytechnics-fragile-and-...

RBNZ's open market operations division extends sterilisation procedures via RB Bill and RP actions to offset it's NZD liquidity injections into the FX swap market. This function should be undertaken by local NZD correspondent banks, but remain unwilling to commit balance sheet/capital capacity to arbitrage the recent upward implied NZD depo rate squeeze.

More NZD supranational bond issuance proceeds seeking NZ bank foreign currency debt receipts to undertake a cross currency basis swap.

Rampant greed strikes again or how to bring on a public lead backlash. https://www.stuff.co.nz/national/politics/100485600/student-allowance-bo...

Textbook case of Unintended Consequences. Give every student a $50 weekly hand-out (pre-announced, even), plus, and concurrently, compel landlords to bring buildings up to standard.

Then goggle in amazement as economically rational thinking strikes yet again.....

Why, now I come to think of it, that 50 bucks is yet another Universal pricing Signal....

What if the govt handed out the equivalent of $50 in food stamps? Or perhaps the govt could reimburse the $50 per week after graduation.

The problem with landlords raising rents by $50 is that it is still $50 missing from goods and other services.

Where ever they spent it, it can't (by definition) be spent anywhere else.

Perhaps not. There is a good chance it goes to overseas banks due to our ever growing housing ponzi.

https://en.wikipedia.org/wiki/Opportunity_cost

You are confusing what happens next with the mutually exclusive nature of expenditure.

Where ever they spent it, it can't (by definition) be spent anywhere else.

To some extent yes. Constraints on h'hold and individual incomes are greater than for govts. The biggest driver of the economy is consumer spending. More spending allocated to rent is not positive for the retail sector.