A review of things you need to know before you go home on Monday; Kiwi Bond rates jump, house sale volumes tank, migration flows negative, NZX sold off, swaps up again, NZD stable, & more

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

MORTGAGE RATE CHANGES
Still no market response to ANZ's shift higher for fixed home loan rates last Wednesday.

TERM DEPOSIT RATE CHANGES
Treasury today raised their Kiwi Bond interest rates, which has the effect of raising the risk-free rates in the market. The new 6 month rate is now 1.20%, up +50 bps, the one year is now 1.70% up +60 bps. The two year is now 1.90%, up +40 bps, and the four year is now 2.30%, also up +40 bps.

SLIP SLIDING AWAY
There was a substantial decline in the number of houses sold in February but prices held firm, according to the REINZ residential data out today. Nationally the volume drop was a third, down by -40% in Auckland. There were large increase in days to sell in February also showing that buyers aren’t willing to meet sellers’ price expectations. The number available for sale rose sharply as a result. The relaxing of the tougher edges of the CCCFA rules may not rescue this market because there have been a long set of other tightening measures put in place, and rising interest rates are yet to bite. ANZ expects house prices to fall -10% in 2022 and Westpac sees prices falling -10% over 2022 and 2023, Kiwibank economists see a 2022 -5% retreat.

LEAKING CONTINUES
Stats NZ data updates show that migration flows are still negative with a net loss of -7500 people over the 12 months to January. More New Zealand citizens left the country long-term in December and January than arrived back from overseas. The longer this goes on, the less of a prop migration is for housing.

GOING SOUTH AGAIN
The NZX wasn't insulated by last week's large risk aversion selloff. Capitalisation of the NZX50 fell by a rather sharp -2.8% during the week, wiping away almost -$3.5 bln in those five days. Worse, it took the year-on-year decline to just under -5%, and a net -$6.2 bln off the year's capitalisation. There were winners last week on the NZX50. One was Sanford (SAN, #46) which gained 3.6% in those five days. But most were losers. Fisher & Paykel Healthcare (FPH, #1), which alone is one seventh of the overall index, lost -2.6%, but Vista Grou (VGL, #43), Heartland (HGH, #26), Mainfreight (MFT, #4) and Toursism Holding (THL, #49) all lost more than -7.5% in the week. (A click on any of the codes in this item will take you to a profile of the company.)

NZD TRADING TURNOVER JUMPS
Turnover in the NZD in February was high, and surprisingly so in currency markets. More than $12 bln per day was traded in the month, the second highest ever for a February. But at $2.1 bln per day in spot trades, that was the most ever for a February and +11% above the previous high. For forwards and swaps, February 2022 was marginally lower than February 2021 when the all-time February highs were recorded.

WARWICK HUNT NAMED TO BNZ'S BOARD
BNZ has appointed Warwick Hunt, who has had a long career at auditing and financial advisory firm PwC, to its board. Hunt's set to become an independent non-executive director from November 1. He's returning to NZ from a role as PwC’s UK Managing Partner and Chairman of its Europe, Middle East and Africa Executive Team.

TRADE AT MERCY OF CHINA PANDEMIC RESPONSE
China is admitting to a much wider pandemic spread now, and for New Zealand's trade that poses special risks. The jump in COVID cases in major cities poses significant challenges for China’s growth target of +5.5%. Affected regions include major cities, like Shanghai and Shenzhen. The lockdown will disrupt some supply chain activity. Authorities may be adopting a more flexible and practical approach to case screening (for them) but cross border travel is unlikely to relax soon.

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GOLD FALLS
In early Asian trading, gold is lower today from this time Saturday, now at US$1975/oz and down -US$16 from where we last left it.

EQUITIES BIFURCATE
The NZX50 has started the week down -0.6%, on top of last week's drop. Going the other way, the ASX200 has started the week up +1.1% in early afternoon trade. Australia is being turbo-charged by rising commodity prices. Tokyo has also opened up +1.1%. But Hong Kong is down -1.8%, and Shanghai down -1.1%.The S&P500 futures has turned higher, suggesting that Wall Street will open tomorrow up +0.6%.

SWAPS PUSH UP FURTHER
We don't have today's closing swap rates yet. They are likely to have risen yet again in a further move higher. The 90 day bank bill rate is up another +1 bp at 1.49%. The Australian Govt ten year benchmark bond rate is up +6 bps at 2.42%. The China Govt 10yr is down -10 bp at 2.78%. The New Zealand Govt 10 year bond rate is now at 3.04% (up another +2 bps) and still higher than the earlier RBNZ fix for that 10yr rate at 2.98% (down -2 bps). The US Govt ten year is now at 2.04% and up another +4 bps from this morning.

NZ DOLLAR HOLDS
The Kiwi dollar is still at 68 USc where it opened this morning. Against the Aussie we are firmish at 93.5 AUc. Against the euro we softish at 62.2 euro cents. That means the TWI-5 is now just under 73.5 and little-changed from where we opened this morning.

BITCOIN LOWER
Bitcoin has retreated again, now at US$38,172 and and down -1.8% from where we opened today. Volatility over the past 24 hours has been moderate at just under +/- 2.3%.

This soil moisture chart is animated here.

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