A review of things you need to know before you sign off on Friday; more home loan and TD changes, consumer confidence up off extreme lows, spending restrain, credit demand 'mixed', swaps fall hard again, NZD holds, & more

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
BNZ was back again today with mortgage rate cuts. Heartland Bank raised two rates. SBS Bank raised some and cut others. More here.

TERM DEPOSIT RATE CHANGES
TSB raised many of its TD rates today, but mainly short term ones.

AUCKLAND STATE OF EMERGENCY EXTENDED
Auckland Mayor Wayne Brown has extended the state of emergency for the city for seven days following recent flooding. Brown says the decision is based on advice from civil-defence authorities. He says the state of emergency could be lifted early if circumstances permit. Brown also says he "dropped the ball" last Friday when the worst of the flooding occurred, saying he was "too slow to be seen" and "communications weren't fast enough."

BOUNCING UP OFF ITS LOWS
According to the latest ANZ-Roy Morgan consumer confidence survey, it jumped 9 points in January to 83.4, more than undoing its December fall. The lift was driven by the forward-looking questions. The level is still very low. The proportion of people who believe it is a good time to buy a major household item, a key retail indicator, lifted 5 points to 28%. Inflation expectations were little changed at 5.3%.

FLOOD INSURANCE CLAIM UPDATE
IAG told investors that the Auckland flooding even had resulted in more than 15,000 claims so far. They also said the claims level probably exceed AU$350 mln (NZ$390 mln). And that is just one insurer, even if it is the largest. Future insurability is fat becoming an issue for many homeowners. There is more on that here.

WIDER RETAIL SPENDING RESTRAINT
Worldline (ex-Paymark) said the storms in January led to a drop in consumer spending in several regions at those times and may have dampened spending more generally over the month – but a weakening pattern suggests wider economic factors are also at play.

STILL BUYING 'NEW' AT A STRONG PACE
Sales of new cars remain strong in January although not as strong as in December, but weakened further for used imports. A new 12 month record was reached for new cars in January, but used imports sank to a nine-year low. There is a noticeable shift to smaller cars underway, possibly coinciding with the rise in EV sales (although the luxury end is still strong). Sales of new commercial vehicles however fell away further, now down -30% from year-ago levels. Auckland flood damage recovery may distort this activity in some future months.

BUSINESS CREDIT DEMAND 'MIXED'
Equifax says overall business credit demand was down -1.7% year-on-year in the December 2022 quarter. Following some uplift in the previous quarter, business credit demand reduced in the December quarter, but the overall reduction is relatively small, with mixed experience across industries.

'REASONABLE GROUNDS'
The FMA is reinforcing that financial advisers must have reasonable grounds for any recommendation or conversational guidance to clients. Failure to do so puts them at risk. Without reasonable grounds, an adviser cannot make a recommendation. Those positions must all be properly documented, says the regulator.

FIJI ON THE UP
ANZ has been looking at Fiji's economy. That say their economic growth accelerated in 2022 and is gaining momentum. However, a strengthening economy where demand could escalate quickly, raises the prospect of interest rate rises there in the near future. Higher rates will be necessary to retain an adequate level of surplus foreign reserves, contain underlying inflation and anchor inflation expectations.

CLIMATE CHANGE ADAPTION URGENCY & PARAMETRIC INSURANCE
We released the next in-depth interview in our Of Interest podcast series today. David Hall explains the need for, and possibilities for, climate adaptation finance as people in the upper North Island clean up. You can find that episode here.

YES, CHINA'S SERVICE SECTOR IS REBOUNDING
The private services PSI survey for China confirmed the official PSI rebound in their services sector in January. (Recall this same private survey did not confirm the factory improvement.)

STRUGGLING
In Australia, the value of new home loans for owner-occupied homes in Australia fell -4.2% in December from November, sliding for the seventh straight month and coming in worse than forecasts for a -2.75% decline. Refi is strong there however.

SWAP RATES FALL SHARPLY AGAIN
Wholesale swap rates likely retreated further today with chunky retreats across the curve all driven from international influences. 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 3.40% and down -11 bps. The China 10 year bond rate is down -2 bps at 2.93%. The NZ Government 10 year bond rate is now at 3.96% and down -16 bps, and now just below the earlier RBNZ fix at 3.98% which was down -15 bps. The UST 10 year dropped back another -3 bps to 3.38%. Recall it was 3.52% a week ago.

EQUITIY MARKETS MIXED
The S&P500 ended up +1.5% on Wall Street at the end of its Thursday trading. Tech indexes rose even more. All this was driven by a market feeling the US Fed is or is about to reach the end of its 'normalisation' transition. Tokyo has opened its Friday trading up +0.6% and heading for a weekly gain of +0.7%. Hong Kong has opened down -0.7% and heading for a weekly loss of -3.5%. Shanghai has opened down -0.3% and if that holds will be down -1.0% for the week. The ASX200 is up +0.4% in its Friday afternoon trade and heading for a +0.6% weekly gain. The NZX50 is flat in late trade today, but it already has a weekly gain of +1.0% in the bag.

GOLD TUMBLES
In early Asian trade, gold is back down as sharply as it rose yesterday, now back at US$1917/oz and a -US$36 daily retreat.

NZD SHIFTS CANCEL EACH OTHER
The Kiwi dollar is at 64.8 USc, and down almost -½c from this time yesterday. Against the Aussie we are up +½c at 91.6 AUc. Against the euro we are little-changed at 59.4 euro cents. The TWI is now at 71.5 and also little-changed.

BITCOIN FALLS BACK SOME
The bitcoin price has retreated a bit today, down -2.1% from yesterday to US$23,568. Volatility has been modest however at +/- 1.5%.

This soil moisture chart is animated here.

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