A review of things you need to know before you go home on Tuesday; no rate changes, business mood lower, jobs mood softens, retail sales growth soft, milk production down, swaps flat, NZD higher, bitcoin slips

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
No changes here either.

MOOD SWING ...
The NZIER business confidence survey is showing an election-related drop, pretty much mirroring the ANZ results released in December. And like the ANZ survey, the QSBO also shows firms are less pessimistic about their own prospects that for the whole economy. Still, the QSBO drop makes it the lowest level of business confidence since March 2011.

... THAT HASN'T HIT JOBS, YET ...
And staying in the December, the latest Westpac MM employment confidence report shows little overall change. But recall that employment data is usually a lagging indicator. And the "own job security" measure suffered a sharp drop - although to be fair it is still positive, The strongest employment confidence can be found in Northland, the weakest in Taranaki. Auckland's employment confidence recorded one of the largest falls, just behind the drop for Southland. Most commentators are talking this data up, seeing it through rose-tinted glasses.

... BUT MIGHT BE AFFECTING RETAIL SALES NOW
December retail sales via the use of electronic cards was up +3.3% in December, quite a but below expectations and certainly lower than the +5.2% year-on-year gain in November. Part of that was due to lower spending on fuel, but the weakness in spending on durables will be of more lasting concern.

LOW VOLUMES
Also not helping will be Fonterra's latest Market Update detailing soft December milk production (-6%). We have the next dairy auction tomorrow morning and the derivatives market is signalling a small +4% gain is possible, at least for WMP, and maybe a bit more for SMP.

WHOLESALE RATES UNCHANGED
Without direction from Wall Street, which is on holiday, local swap rates have marked time here today, essentially unchanged although there is a hint of flattening. In China, their sovereign 10yr yield is holding at the new higher level of 4.03% (unchanged) but their 2-10 curve is now up to +39 bps. The NZ Govt 10yr yield is higher at 2.92% (+3 bps). And the Aussie 10yr is at 2.77%, up +3 bps and its highest since October 2017.

NZ DOLLAR HIGHER
The NZ dollar is higher than at this time yesterday, now at 73.1 USc. We are slightly firmer against the Aussie as well at 91.7 AUc and still at 59.5 euro cents. This puts the TWI-5 down up at 74.4. The bitcoin price has been reasonably volatile today rising to as much as US$14,300 at one point, but it is currently at US$13,000 and a loss of -5% on the day. We are now at the lowest level since briefly on December 30, 2017 and apart from that, lowest since December 5, 2017.

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USD 
NZD
End of day UTC
Source: CoinDesk

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2 Comments

It is hard to believe in the viability of anything designed as a medium of exchange when valuations are fluctuating on the order of 10% per hour. Bitcon is getting to be very amusing now... yesterday $13-14k, today $11-12k. Crazy stuff...