A review of things you need to know before you go home on Thursday; ASB changes rates, used car sales drop, local authority revenues race higher, swap rates little changed, NZD softer, & more later

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

MORTGAGE RATE CHANGES
ASB changed rates today. Housing NZ have also changed rates.

TERM DEPOSIT RATE CHANGES
None here either.

CONSULTANT TO REVIEW NZ SUPER FUND SOUGHT
Treasury is seeking someone to conduct an independent review of the Guardians of New Zealand Superannuation and the New Zealand Superannuation Fund. A review is conducted every five years with the next one due in 2019. Treasury is seeking a specialist investment consultant to review and produce a report that will be presented to Parliament.

TOUGH TRADING
Used car purchases fell -25% in November compared with a year earlier, the largest annual fall in a downward trend that began in February this year. It was alos the lowest November since 2013. Both large and small cars contributed to the fall in almost equal measure.

SHANGHAI DOWN SHARPLY
In late morning trade in Shanghai, stocks are down -1.2%. Hong Kong is down a whopping -2.8%. The ASX is down another -0.5% in early afternoon. The NZX is little-changed.

INFLATION-INDEXED BOND TENDER BRINGS VERY LOW YIELD
The latest yield of inflation-indexed bonds issued by the NZ Government rose marginally to 1.72% from 1.70% in the prior tender. But these rates are near their lowest ever.

MONEY FOR JAM
Latitude Financial (GEM Finance) have priced their $200 mln credit card derivatives issue. It will be based on the December 13 issue date, but if it was priced today it would have averaged a yield of just 3.60%! No kidding. The underlying stream probably is based on card contracts with face interest rates over 20%. So this financial engineering will generate a huge capital gain in issue.

BALLOONING REVENUES
'Revenue' from local authority rates and regulatory income rose an impressive +7.6% pa in the year to September. This is athe highest growth in at least three years. No doubt some of this was from the July imposition of the 11.5c Auckland regional fuel tax.

SWAP RATES LITTLE CHANGED
Wholesale swap rates are little changed today, with shorter rates up +1 bp and longer ones down -1 bp. The UST 10yr is now down to under 2.91% in offshore markets as Wall Street was closed today. The 2-10 curve has slipped below +11 bps. The Aussie Govt 10yr is at 2.48% and down another -1 bp, the China Govt 10yr is down -4 bps at 3.31%, while the NZ Govt 10 yr is at 2.49%, down -3 bps. The 90 day bank bill rate is up +1 bp to 1.98%.

BITCOIN DOWN
The bitcoin price is now at US$3,706 and that is -4% lower than this time yesterday.

NZD WEAKER
The Kiwi dollar is down -½ and now at 68.7 USc. On the cross rates we are stronger at 95.1 AUc and down at 60.6 euro cents. That puts the TWI-5 down to 73.3.

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10 Comments

Are we waiting for another US sharemarket freefall tonight at the opening bell?

https://finviz.com/futures.ashx .. Lucky there are no bulls to be seen with all that red..

Edit: just took a look at the hang seng, taiex, and SSE indices. All very red.

Depends on whether Huawei gets annoyed about its bosses daughter being arrested by the Canadian to be turned over to the Americans!
But, David missed The Big One....Saxo Banks predictions for the coming years; Aussie property market to fall 50%...always good for light hearted reflection.

https://www.home.saxo/insights/content-hub/articles/2018/12/04/op-2019-a...

"things are a little more unsettled than anticipated up north. BoC in its latest statement today no longer describes the Canadian economy as “strong”, a curious omission given how the risks to it have largely been cited as foreign in nature. Officials there are blaming the United States not for its economy which Economists continue to claim is robust and remains strong.

Rather, Canadian policymakers seem to be fretting trade wars and the US dollar. The former is the easy target while the latter is as misunderstood as the other. What really has changed is oil. The Canadians have been counting on a continued crude comeback for marginal strength despite these “other” global risks.

But this, too, is a copout. Canada’s economy turned downward long before Canadian heavy benchmarks collapsed since summer. This year began on the wrong foot and the country has never recovered from it. The loss of an oil-based baseline merely removes any chance at an upside. The whole thing skewed the wrong way right out from under them."
https://www.alhambrapartners.com/2018/12/05/policy-pauses-canada-looks-t...

“What is the most striking aspect of this move is the extent of it in just two days and how the acceleration came out of nowhere right after a supposed amicable meeting between the U.S. and China,” Peter Boockvar, chief investment officer of Bleakley Financial Group, said in a note. “It’s almost as if the bond market screamed out, ‘It’s too late, the growth slowdown underway can’t be reversed.”’
https://www.alhambrapartners.com/2018/12/05/unexpected/

This is just the second wave of sell offs and shifting currency. When I was looking at the 10 year treasuries they are mighty close to the 2 years now.

I will be interested to see if the Swiss National Bank has unloaded even more shares. I'll have to check out their next filing.

Hopefully the Canadians will find a diplomatic way out to release the bosses daughter of Huawei.

If she ends up in the slammer in the USA - All hell could break loose !

A real Black Swan moment none were anticipating. The thought that the Yanks can pull this one off without consequence ? Not going to happen. China will be FURIOUS as in FURIOUS !

Watch this space.

Jacinda is keen to be an advisor to USA and China to get them to reconcile their differences. Maybe she could trade Kim Dotcom for the Huawei girl.

Yeah but the defaults that GEM will face will drag that profit much lower than 20-3.6%

just had a look.. interest free for 6 months on purchases over $250, then 25.99% on the GEM visa. Or 25.99% straight away on cash advances.

The local authority rates and regulatory revenue is a wee bit higher than Phil Goof's 2.5%!
I guess I for one am partly to blame. I paid a portion of a development contribution recently (0.2 of a Household usage equivalent) in order to get that done before they increase markedly in Jan.