A review of things you need to know before you sign off on Wednesday; RBNZ raises by another +50 bps, imports surge, SMEs struggle, ESG 'a scam', swaps rise, 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
There are no changes to report today.

TERM DEPOSIT RATE CHANGES
None here either.

ANOTHER +50 BPS OCR HIKE
The RBNZ didn't surprise, and hasn't missed a beat in its campaign against inflation. At today's MPS review it set aside the expected impacts from Cyclone Gabrielle on the grounds that policy response implications are still unknown as is the Government's fiscal response. They said the OCR still needs to increase, as indicated in their November Statement, to ensure inflation returns to within its target range over the medium term. While there are early signs of price pressure easing, core consumer price inflation remains too high, employment is still beyond its maximum sustainable level, and near-term inflation expectations remain elevated, they noted.

DANGEROUS SPLURGE ON IMPORTS
Our imports in January rose al almost twice the rate our exports rose. And almost no-one is noticing. Imports rose almost +26%; exports rose almost +14%. A +14% rise is pretty damn good, and for the year to January exports are up +13%, the best annual rise since . But we are buying imports are a completely other level, like we are a wealthy country. This pretending will undoubtedly catch up with us at some stage, but not yet, it seems. Anyway, our January merchandise trade deficit blew out to -$2 bln in the month, the largest ever January shortfall.

KOREA A BIGGER SUPPLIER
Interestingly, while our trade surpluses in our trade with China, Australia and the US are shrinking (and with Japan, we have always run deficits), what is new is the surge in our deficit is the huge increase in imports from South Korea.

GOING
In a surprise announcement, Auckland Council's CEO has handed in his notice. Jim Stabback joined the council on 1 September 2020 and will remain in the role until 25 August 2023. He is walking away from a $630,000 salary for "personal reasons". He replaced Stephen Towne ($698,000) who replaced Doug Mackay in 2013 ($797,455).

CASH COW
Meanwhile, the Ports of Auckland has raised its profit forecast after a strong first half. Auckland Council wants then to deliver a $52 mln profit in 2023/24. This year they say they will have it up to at least $42 mln. Based on the rising first half, Auckland Council will get an interim dividend of $15 mln, with a similar final dividend likely as well.

GOING BACKWARDS
Xero's monitoring of their SME clients shows that sales were flat in January, with the largest year-on-year declines in agriculture, (-7.2%), retail trade (-5.1%) and professional services (-2.4%). But it’s not just spending that has slowed, wage growth has also slowed to 4.6% in January on the same basis, the smallest rise since March 2022 (4.4%).

ANZ NEXT TO RAMP UP DISASTER SUPPORT
ANZ said it will donate $3 mln to flood recovery initiates in the Hawke's Bay and elsewhere. This involves $1 mln to support businesses and communities through local relief funds and Iwi organisations in affected regions, $1 mln to support horticulture and agriculture sector groups; and $1 million to the New Zealand Red Cross Disaster Fund through a special fundraising event with NZ Cricket. This comes after BNZ released a $1 bln Recovery & Resilience Fund, and a $250,000 donation to the Salvation Army.

SOLID GAINS BEFORE THE STORMS
Prior to the January/February weather disasters, Infometrics reported that the all regions where performing 'solidly' at the end of 2022.

CHALLENGING THE 'ESG SCAM'
A NYU professor it pointing out that Russian businesses who support their Government's war on Ukraine are mostly able to score highly on ESG measures. It is peak 'greenwashing', he claims. More here. on the endemic mismeasurement. Savers beware. (H/T AM and ResearchIP)

SWAP RATES HIGHER AGAIN
Wholesale swap rates are likely up quite a bit further, after the OCR. But the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is up +3 bps at 5.03%, but that was before the OCR change was released. The Australian 10 year bond yield is now at 3.89% and up another +4 bps. The China 10 year bond rate is little-changed at 2.94%. The NZ Government 10 year bond rate is now at 4.54% and up +9 bps and above the earlier RBNZ fix at 4.49% and up +13 bps (before the OCR decision). The UST 10 year is up +8 bps at 3.94%. It was last over 4% in October/November, and prior to that in 2007.

EQUITIES MOSTLY DOWN
The S&P500 ended down 0.3% on Wall Street over the long holiday weekend. Tokyo is very slightly down in morning trade. Hong Kong is down by 0.6% at its open. Shanghai is up 0.4% at its open. The ASX200 is down 0.3% so far in early afternoon trade. The NZX50 is following up Monday's down-with-a-thump fall of over 2% with some further, slightly more modest, easing, down 0.6%.

GOLD SLIPS SLIGHTLY
In early Asian trade, gold is softish around US$1838 and down about -US$4 from this time yesterday.

NZD UP SLIGHTLY
The Kiwi dollar is marginally higher after the OCR change, but still not back to yesterday's level. It is now at 62.3 USc. Against the Aussie we are marginally higher and now at 90.9 AUc. Against the euro we are a little-changed at 58.4 euro cents. That means the TWI-5 is now at just under 70.1 and up after its slight dip below 70 last night.

BITCOIN SLIPS BACK -US$600
Bitcoin has retreated -2.5% from yesterday to be now at US$24,404. Volatility over the past 24 hours has been moderate at +/- 2.2%.. 

This soil moisture chart is animated here.

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