Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
Nothing to report today from any institution.
TERM DEPOSIT RATE CHANGES
Only Christian Savings had a change today, a rise to their TD rate card.
STILL TIGHT, BUT LESS SO (MAYBE)
Statistics New Zealand says the unemployment rate has risen to 3.4% from 3.3%; it was widely expected to fall. Private sector hourly wage growth has slowed to 8.1% from 8.6% when it was expected to rise. BNZ economists changed their OCR call, saying it will rise by 'only' +50 bps on February 22. Still, we need to point out that the not-seasonally adjusted data shows employment grew +28,500 in the December quarter to an all-time record high of 2.872 mln. The employment rate is also a new record at 69.7% of the working age population. And the participation rate rose to a new record high 72.1%. These are 'extreme' levels for any economy, not just New Zealand, and it is hard to see how jobs can be filled when things are this tight (except by opening the borders, of course). The seasonally-adjusted data may have suggested things are topping out (and they may well be), but the raw data has things as tight-as.
WORKERS NOT BEING LEFT BEHIND
The pay data in today's labour market releases does suggest a topping out in pay increases. These came in at +8.1% on averageacross the whole labour market. What is interesting is that it is clear most workers are keeping up with CPI inflation (7.2%), and making relative gains due to the applicant shortages for unfilled positions. Private sector average weekly earnings increased by +8.6%, to $1,432/week. Real wages are rising. When real wages are rising and the census of filled jobs is at its highest ever, the risk of wage-push inflation embedding is high. From a macro perspective, the level of payroll cash flowing through the economy is also at a record high and rising faster than CPI. Gross earnings of all employees were up +10.1% in Q4-2022 compared to Q4-2021, whereas paid hours only rose +2.5% over the same period.
'VENDORS UNREALISTIC'
Realestate.co.nz figures show stock levels up and asking prices down, warns many vendors still have unrealistic price expectations.
'TEMPORARY' TAX CUT EXTENDED
The Government has extended its earlier 25c/litre fuel tax cut for yet another three months, saying it wants to focus first on ‘bread and butter’ ‘cost of living’ issues. It is hard to see them reversing these cuts before October 14 (election day). More than just fuel and RUC extensions, half price public transport is to be made permanent to around one million Community Service Card holders, including tertiary students, from 1 July 2023. We are in full election campaign mode now.
NAME CHANGE
NZBA today announced it would be called the New Zealand Banking Association – Te Rangapū Pēke. It was previously known as the New Zealand Bankers’ Association. The te reo name, was given by Tāwhia, the Māori banking rōpū, "and we are very grateful for this generous gift".
NOT CONFIRMED
It is a fine margin, but the private Caixin PMI survey did not confirm the official Chinese factory PMI with a shift to an expansion. The Caixin survey still reports a small contraction, but new orders shrank for the sixth straight month.
SWAP RATES EASE
Wholesale swap rates likely retreated today with most of the fall at the short end. The real action comes near the close however. Our chart will record the final positions. The 90 day bank bill rate is down -2 bps at 4.89%. The Australian 10 year bond yield is now at 3.55% and little-changed. The China 10 year bond rate is back at 2.94%. The NZ Government 10 year bond rate is now at 4.19% and down just -1 bp, and that is still way above the earlier RBNZ fix at 4.10% which was down -8 bps. The UST 10 year is down -2 bps to 3.52%.
EQUITIES RISE
The S&P500 ended its Tuesday session on Wall Street up almost +1.5% with a late burst higher. Equity markets are more convinced the Fed will ease off their 'normalisation' pace tomorrow. The NZX50 is ending today up +0.8% near the close. The ASX200 is up +0.5% in early afternoon trade. Tokyo has opened up +0.6% today. Hong Kong is up +0.2% at its open. Shanghai has opened up +0.2% as well.
GOLD UNCHANGED
In early Asian trade, gold is unchanged from this time yesterday at US$1925/oz.
NZD SOFT
The Kiwi dollar is at 64.3 USc, and down -½c from this time yesterday. Against the Aussie we are down at 91.2 AUc, and that's down more than -½c. Against the euro we are down slightly less at 59.2 euro cents. The TWI is now at 71.2 and -30 bps lower in a day.
BITCOIN HOLDS
The bitcoin price has risen slightly, to US$23,073 and up +0.8% from this time yesterday.
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