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
Rabobank raised its savings account rates. Its PremiumSaver rate is now 4.25%. Its 60-day NoticeSaver is now 4.50%. Both are higher than any main bank rate for a term deposit less than 6 months. Unity Money raised its term deposit rates.
FAST-TRACK STOP GAP
The Government has launched a new fast-track "recovery visa" designed to attract overseas workers needed for storm cleanup and remediation. It will last for six months only, however. It is targeting experts such as insurance assessors, infrastructure and utilities engineers and technicians, heavy machinery operators and debris removal workers. However, there was an extreme need for skills before Cyclone Gabrielle, so this latest program doesn't actually address that.
LOWER FARMGATE MILK PAYOUT
Fonterra cut its milk payout forecast for the current season by -50c to a narrower mid-point of $8.50/kgMS. This was the second time they have trimmed it. Perspectives are here.
A BEAR MARKET IN CARBON
The local carbon price is still falling, now down to $67/NZU. It peaked at $88/NZU just before the end of 2022, so from there it is down -24%.
THE WAR ON DIRTY MONEY
We have a new 'Of Interest' podcast out, looking at the war on dirty money (which we don't seem to be winning).
HUGE SLUMP
The RBNZ said that monthly new mortgage commitments were $2.8 bln in January and down a very sharp -$2.3 bln (-46%) from the $5.1 bln in December. This is the second lowest value of new commitments in a month since the series began in August 2013. The lowest value recorded was $2.7 bln in April 2020 when pandemic restrictions were in place across the country. Adjusted for inflation, the January 2023 levels are far the lowest.
THE TABLES HAVE TURNED
Even though they slumped too, the most resilient corner of the mortgage market was for first home buyers. They took 23% of all approvals, the highest proportion since this series began in 2014. At the other end are investors; they had their lowest ever share of mortgage approvals in this data series at 15.4%. Recall they peaked at 34.8% share in June 2016.
ANOTHER BNPL BITES THE DUST
Latitudes Genoapay buy-now-pay-later offering is being closed in New Zealand. This will be effective April 11, 2023.
SAMOA IN GOOD ECONOMIC SHAPE
ANZ has been reviewing Samoa's economy, and their note suggests it has weathered the pandemic well, and has a bright future.
A 42 YEAR HIGH
Japan reported CPI inflation in the year to January of 4.3%, up from 4.0% in December. This is their highest rate in 42 years, since December 1981. Food prices were up 7.3%. But generally it was driven by rises in the cost of imported raw commodities and yen weakness. The annualised rate of change between December and January was almost +5%, so the pace is quickening. There is now a greater chance the Bank of Japan will pivot away from its long-standing ultra-loose policies. Not only is there a new BofJ boss incoming, but major companies are starting to raise wages sharply, a key factor for the central bank.
FOOD STRESS
New Zealand is a big exporter on onions, but this year weather issues have limited supply significantly. But low onion supply isn't just a New Zealand phenonium; it is a global issue and prices are rocketing higher. In some countries (Turkey, Philippines, for example) they cost more than meat.
SWAP RATES HIGHER AGAIN
Wholesale swap rates are likely little-changed today. 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 +2 bps to 5.10%. The Australian 10 year bond yield is now at 3.87% and down -3 bps. The China 10 year bond rate is unchanged at 2.94%. The NZ Government 10 year bond rate is now at 4.68% and up only +1 bp and now matching the earlier RBNZ fix at 4.68% and up +13 bps. It looks like policy rates may be further away from the top than markets had been pricing and so there is some catchup underway. The UST 10 year is down -4 bps at 3.88% in a further slip.
EQUITIES MIXED BUT WEAKISH
The S&P500 ended up +0.5% on Wall Street and eating into losses earlier in the week. Tokyo is back trading today after their public holiday (Emperor' Birthday) and is up a full +1.0% in early trade. Hong Kong is down -0.7% in early trade and Shanghai has opened today with a very minor slip. The ASX200 is up +-0.3% so far in early afternoon trade and if this holds it will end the week with a -0.6% net fall. The NZX50 is down -0.2% in late trade today and heading for a weekly fall of -2.3%. But at least that is less than the -3.6% retreat is was facing on Wednesday.
GOLD HOLDS
In early Asian trade, gold is unchanged from this time yesterday, still at US$1825.
NZD STABLE
The Kiwi dollar is little-changed from this time yesterday at 62.3 USc. Against the Aussie we are also little-changed at 91.5 AUc. Against the euro we are marginally firmer at 58.8 euro cents. That means the TWI-5 is now at just over 70.3 unchanged from yesterday.
BITCOIN HOLDS
Bitcoin has retreated again from yesterday to be now at US$24,067 which is a tiny -0.4% slip. Volatility over the past 24 hours has been moderate at +/- 2.1%.
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