Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Both BNZ and ASB raised home loan rates. But ASB's rises were notable because they pushed on up above all others. More here. Update: Both Westpac and Cooperative Bank has also raised rates
TERM DEPOSIT RATE CHANGES
ASB raised term deposit rates, taking their nine month rate to 2.00%. Update: Westpac and Cooperative Bank have raised TD rates too.
RATE RISES GET MAJOR PUSH
The US Federal Reserve raised their policy rate today by +25 bps. That amount by itself isn't that important, but is comes soon after they signaled they are ending QE,, one member wanted a +50 bps rise, their dot-plot rose notably, and inflation signals are all much higher. They have fired the starters gun for the real race higher for policy interest rates, after months of signaling. (Hong Kong raised their policy rate today too.)
HIGHER MILK PRICE, LESS PROFITABLE
Dairy co-operative Fonterra maintained its 'mid-price' farm gate milk price forecast today of $9.60/kgMS and its full year forecast earnings of 25c to 35c a share. But they also signaled that their half year profit fell -13% because they are paying so much more to farmers for milk.
RIVERS TO DEPART
The well-regarded CFO at Fonterra has said he is quitting. No reasons have emerged yet.
BIG JUMP
Immigration NZ says more than 22,000 residence visas have been approved since the start of this year. That's an eightfold increase.
SMALL JUMP
Economic activity as measured by GDP rose a less-than-expected +3% in the December quarter from the prior quarter as the economy bounced back in Q4-2021 from the lockdown blues - but the bounce was nowhere near as strong as economists thought it would be. But despite that, all analysts seem to agree the Q4 rise won't be sustained, so the best we are heading into is a lackuster expansion. And no-one sees inflationary forces easing. Business NZ sees the outlook as 'subdued'.
IMPORTING OUR PUBLIC SERVICE CULTURE?
I kept getting the sense that many senior public service managers were speaking with British accents. Are we being re-colonised from the inside of our public institutions? The concern is that we are just importing 'solutions' to some other country's problems. So I asked the Public Service Commission (ex the SSC). The have responded like this. For Tier one roles, "Of the current 39 Public Service leaders, one was educated in the UK, one was educated and appointed from the UK and one was educated and appointed from Australia." For Tier two and Tier three roles (about another 1280 roles defined as 'senior leaders of the wider Public Service'), "Public Service Commission does not hold the information relating to tier two and tier three Senior leaders across the Public Service."
ONLY FOUR WINNERS, 57 LOSERS, BUT YIELDS JUMP
More than $760 mln was bid today in 61 bids for two NZ Government bond tenders. But only four bids won anything. The April 2027 $100 mln got $482 mln in bids. Two bidders won at 3.01% and up from 2.65% just two weeks ago. Presumably the other bidders all bid higher than that. The $100 mln available for the May 2051 bond got $281 mln bids from 32 bidders. Again, only two won anything here and at 3.53%, well above the 3.19% two weeks ago.
COMPLETED!
Hugely over-budget, and very late, the long awaited and long-needed 27km Transmission Gully highway is now slated to open "before the end of this month". There will be significant travel time savings and related fuel time savings (not to mention significantly fewer road accidents).
A VIRTUOUS JOBS REPORT
Australia added +77,400 jobs in February and their jobless rate fell from 4.2% to 4.0%. (In February 2021 it was 5.9%.) Better, full-time jobs rose +122,000 while part-time jobs fell -45,000. With our borders open, the sucking sound might be louder.
GOLD RECOVERS
In early Asian trading, gold is higher today from this time yesterday, now at US$1934/oz and up +US$12. In between it had fallen under US$1900/oz, so a recovery is underway.
EQUITY UPDATES ALL UP
The S&P500 ended its Wednesday session up +2.4%, after a volatile ride through the Fed announcement. In the end it finished strongly higher. Tokyo has opened up +3.2% in early trade with similar optimism. Hong Kong has followed up yesterday big recovery with an even larger +3.6% rise at their open today. Shanghai has opened up +1.2%. The ASX200 is up +1.4% in afternoon trade. The NZX50 is up +1.5% in late trade today.
SWAPS ON HOLD?
We don't have today's closing swap rates yet. They are likely to have changed little today with the lower-than-expected GDP result taking the wind out of local sails. The 90 day bank bill rate is up another +2 bps at 1.58%. (Two weeks ago it was 1.34%.) The Australian Govt ten year benchmark bond rate is up +3 bps at 2.52%. The China Govt 10yr is down -2 bps at 2.83%. The New Zealand Govt 10 year bond rate is now at 3.20% (up another +4 bps) and still higher than the earlier RBNZ fix for that 10yr rate at 3.18% (up another +4 bps). Although it got as high as 2.24% in between, the US Govt ten year is now at 2.15% and unchanged nett from this time yesterday.
NZ DOLLAR RISES
The Kiwi dollar is now at 68.4 USc and a full +1c higher from this time yesterday. Against the Aussie we are lower at 93.6 AUc. Against the euro we are firmer at 61.9 euro cents. That means the TWI-5 is now just over 73.7 and +65 bps higher as commodity currencies find favour again.
BITCOIN RISES
Bitcoin has firmed again today, now at US$41,033 and up a chunky +4.5% from this time yesterday. Volatility over the past 24 hours has been high at just over +/- 3.6%.
This soil moisture chart is animated here.
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