A review of things you need to know before you sign off on Wednesday; the first floating rate increases appear, house values shrink, consents down, car sales weak, KiwiSaver returns negative, swaps hold, NZD firm, & 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
Resimac raised its rates, both floating and fixed. The Cooperative Bank said it will increase its floating rate by +40 bps on March 6 to 8.15%. For existing customers it will be effective March 15.

TERM DEPOSIT/SAVINGS RATE CHANGES
The Cooperative Bank raised their savings account rates also effective March 6, with their Step Saver potential rate rising +50 bps and taking it to 4.10%. Other savings accounts with them get a lesser increase.

SLIDING LOWER IN FEBRUARY
Average value of NZ homes were down -$99,000 from the March 2022 peak, Auckland values down -$186,000, and Wellington values down -$215,000 according to the CoreLogic House Price Index. We should remind ourselves that February and March are the traditional high-points of the real estate selling seasons.

SLOWDOWN ARRIVES
The latest building consent data for January indicate a slow but steady decline in new residential construction activity. And non-residential building activity also shows signs of tapering off.

ARREARS SWELL
Credit bureau Centrix says the current economic climate is 'putting pressure on households across New Zealand', with 430,000 behind on consumer debt repayments.

TEN YEAR LOW
February new car sales were weak. They were down -18% from year-ago levels to their lowest monthly total since pandemic-affected August 2021, and the lowest February since 2013. Sales of used imports were also weak, down -27% from year-ago levels although they were higher than any month since August 2022.

MORE NEW COINS
The RBNZ reported that it minted 10 mln 20c coins in 2022 plus another 8 mln $2 coins. This comes after it skipped minting any in 2021.

A SHOCKING OUTCOME
The RBNZ also reported that the total value of all 3.2 mln KiwiSaver balances exceeded $91 bln by the end of 2022. That is down -$3 bln in value from the end of 2021. The IRD separately says it took in $9.3 bln in member contributions, so that means your friendly KiwiSaver manager managed to lose -$12.3 bln for you on those investments in the year. Yes, the year was a tough one for fund managers, but more than a -10% loss of capital can never be said to be good by the fund management industry.

AUSSIE GROWTH EASES
Australia reported its Q4-2022 GDP growth today, coming it as expected at +2.7% from the same quarter a year ago. In Q3-2022 it was +5.9% so the rate more than halved. This was the fifth straight quarter of growth in the economy but the softest pace in the sequence, as household consumption grew the least in five quarters amid intense cost pressures and rising interest rates. The consumer was the key surprise, according to Westpac analysts, with only a tepid +0.3% rise in overall spending. Services were the key disappointment, with only a modest rise. Also, income growth was weaker than anticipated and the decline in the household saving ratio was more pronounced they noted. While nominal gross household income grew by +1.6%, real household disposable income contracted by a hefty -2.2%.

AUSSIE INFLATION STAYS HIGH BUT EASES SLIGHTLY
Like New Zealand, Australia also reports its formal CPI on a quarterly basis, and for Q4, 2022 that was +7.8%. But they also have a monthly CPI indicator series and for December that came in at 8.4%. However that monthly measure fell back to 7.4% in January, their second highest level since this monthly CPI series started in 2018. Analysts had expected it to retreat to 8% so this is a bigger fall than expected.

A GOOD RECOVERY
China said both its factory sector, and its services sector, each expanded at a moderate rate in February, a key set of improvements. Both were outcomes better than expected. The services sector result was a two year high; the factory result was a ten year high. And backing that up was the private Caixin PMI survey which reported similar good improvements.

SWAP RATES HOLD HIGH
Wholesale swap rates are likely little-changed today. Yesterday they closed with the 2-year at its highest since November 2008. It may hesitate from here before finding a new track. The real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate rose +2 bps to 5.15% which is now +40 bps above the current OCR. The Australian 10 year bond yield is now at 3.83% and down -5 bps from this time yesterday. The China 10 year bond rate is little-changed at 2.93%. And the NZ Government 10 year bond rate is now at 4.63% and down -3 bps but still above the earlier RBNZ fix at 4.62% which was down -2 bps today. The UST 10 year is up +2 bps at 3.94% to end its February. It started at 3.52% so it has risen +42 bps in those four weeks.

EQUITIES MOSTLY LOWER
Wall Street ended its February month today with a -0.3% slip and taking its February retreat to a chunky -3.6%. Equity prices are getting repriced lower as interest rates rise. The NZX50 was down -1.5% in February and for today, it is down -0.3% in its first day of March trading. The ASX200 was down -2.9% in February and is down another -0.2% in afternoon trade today. Hong Kong has opened its March trading with a +0.8% daily rise. Shanghai is little-changed on the same basis. And Tokyo is down -0.4% to start its first day of March trade.

GOLD IN MINOR FIRMING AGAIN
In early Asian trade, gold is slightly firmer from this time yesterday, now at US$1823/oz and up another +US$5.

NZD MARGINALLY FIRMER
The Kiwi dollar is little-changed from this time yesterday at its new lower level of 61.7 USc. It couldn't hold its overnight gains. Against the Aussie we are almost +¾c firmer at 92.1 AUc. Against the euro we are marginally firmer at 58.4 euro cents, also unable to hold on to all the overnight rise. That means the TWI-5 is now at just at 70 and up +30 bps from yesterday.

BITCOIN SLIPS SLIGHTLY
Bitcoin is down -1.7% today, now at US$23,047. Volatility over the past 24 hours has remained modest at +/- 1.2%.

This soil moisture chart is animated here.

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