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
Kāinga Ora/HNZ raised all its fixed rates.
TERM DEPOSIT/SAVINGS RATE CHANGES
Kiwibank has sharply raised its NoticeSaver rates, taking their 90-day NoticeSaver rate to 4.75%. They also raised other NoticeSaver and call account rates. Westpac raised its 32-day NoticeSaver rate to 4.00% along with their Bonus Saver rate. (For reference, Heartland has a 32-day Notice Saver rate of 4.75% and a 90 -day Notice Saver rate of 5.00% both the market-leading rate.)
FACTORIES HUMMING ALONG
The manufacturing sector is still expanding. The February PMI brought a better result than the January expansion, putting the 2022 weakness further behind it. New orders moved from a contraction to an expansion, helping drive the gains. Employment was positive too. The February results would have been even better if the negative readings from the Hawkes Bay hadn't happened.
A RETAIL GLOBAL ESG EQUITY FUND
Passive index fund manager Kernel has launched a retail Global ESG Fund "in response to surging demand for climate-aligned investment products". This is a global equity funds that is both tax and fee efficient, with fees of just 0.25%. It’s also available in both NZ dollar hedged and unhedged versions. Details here.
MISLEADING INVESTORS
The Financial Markets Authority has issued a formal warning to Du Val Group (a Manukau-based property developer) for misleading investors over why it suspended cash distributions. This is not the first time Du Val has been subject to FMA action (in fact it may be the sixth time).
SIMPLICITY CUTS FEES
Fund manager Simplicity said it will cut its fees by -3.3% in total across its Conservative, Balanced and Growth KiwiSaver funds and diversified investment funds, effective 1 April. The fee cut is the fifth in five years. The latest Morningstar analysis shows Simplicity had $2.7 bln in funds under management at the end of 2022. Simplicity says their new total fund charge will be 0.30% from April 1. That means their total fee income will be about $8.2 mln pa. In no category are Simplicity fund returns market-leading, according to Morningstar records. On fees, Superlife has lower fees. On returns, many funds have higher results in the Default, Conservative, Balanced and Growth categories that they operate. But they aren't the lowest either.
NEW SCAM WARNING
CertNZ is warning of a new credit card scam, a text message phishing campaign. The messages claim to be from various organisations, including NZTA, Apple, Uber, postal services and many others. The messages will claim the recipient has unpaid tolls or fees or otherwise needs to pay a small sum. They also contain a link that looks like a shortened URL. More information here.
WORKING HOLIDAY RULES BROADENED
More Brits are coming for working holidays. The new NZ UK Working Holiday Visas (WHV) will now accessible from July 1 this year. The age of eligibility will increase from 30 to 35 years, and the term extended to three years. These 'rights' are reciprocal with the UK.
MIXED BUSINESS DATA
Wholesale trade sales were up a robust 13.7% in Q4-2022, but retail trade sales were only up +1.8% on the same basis. These two categories are the largest sectors of all business at 20.5% and 13.7%. The business data released today by Stats NZ are about the final pieces of the puzzle that go into our Q4-2022 GDP result. Massey's GDP Live monitoring sees that coming in at +2.9%. Other analysts are out with their forecasts and are less upbeat, like this one.
GETTING THEIR SHARE
Local authorities are managing to keep their income growth up with inflation. The latest StatsNZ monitoring shows rates-and-regulatory-income rising +8.3% in Q4-2022 from the same quarter a year earlier. From Q3 to Q4 it rose at a +7.5% annualised rate.
AN AMERICAN BANK RUN?
SVB Financial Group (Silicon Valley Bank) is scrambling to reassure its venture capital clients that their money is safe after a capital raise led to its stock collapsing -60% and contributed to wiping out over -US$80 bln in capitalisation. The bank launched a US$1.75 bln equity raise to shore up its balance sheet and navigate declining deposits from startups struggling for funds amid increased spending. Markets are wondering whether an SVB collapse could create a domino effect. It comes after crypto bank Silvergate abruptly shut down. It certainly is already downgrading bank share valuations in the US. One to watch.
SWAP RATES RETREAT
Wholesale swap rates are likely sharply lower today across the curve, except for the 1 year. However, the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is down -1 bp at 5.22% which is +47 bps above the current OCR. The Australian 10 year bond yield is now at 3.63% and down -6 bps today. The China 10 year bond rate is down -1 bp to 2.90%. And the NZ Government 10 year bond rate is now at 4.51% and down a very sharp -13 bps from yesterday and still above the earlier RBNZ fix at 4.60% which was up +2 bps today. The UST 10 year is at 3.86%, and down a very sharp -13 bps from this time yesterday on the same negative sentiment. Remember it had hardly changed this week before today.
EQUITIES TURN SHARPLY BEARISH
In its Thursday session on Wall Street, the S&P500 gave up more ground increasingly as the day wore on, down -1.9% at the end. Equity investors stopped fighting the Fed. Tokyo has opened its Friday session down -1.0% but still heading for a weekly rise of +0.6%. Hong Kong has opened very weak again, down -2.4% and if that holds it might be down an eye-watering -5% for the week. Shanghai has opened with its own weakness, down -0.8%. That could mean a -2.5% weekly retreat, itself rather chunky and maybe enough for the home team to come to the rescue. The ASX200 is responding to the weak China sentiment and down -1.9% in early afternoon trade. The NZX50 is not immune and is down -0.9% in late trade and heading for a weekly drop of -1.3%.
GOLD RISES
In early Asian trade, gold is up +US$19 at US$1832/oz.
NZD SOFT
The Kiwi dollar is unchanged this time yesterday, now at 61.1 USc. Against the Aussie we are also little-changed at 92.8 AUc. And against the euro we are softish as well at 57.7 euro cents. That means the TWI-5 is lower at 69.5 with a -20 bps dip.
BITCOIN SHARPLY LOWER
Bitcoin has moved lower today briefly dipping below US$20,000. It is now at US$20,073and down a sharp -7.6% from this time yesterday. It's the sudden shutdown of Silvergate Bank this is the trigger here. Volatility over the past 24 hours has been extreme at just on +/-5.1%. Recall, the bitcoin price started the year at US$16,600, so from there is is a +21% rise. But in between it hit US$24,840 on February 21, and it has been downhill since. Bitcoin's all-time high was US$67,634 in November 2021.
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