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
The Cooperative Bank cut all their fixed rates for terms 6 months to 3 years. Their new core 6.35% fixed rate offer is pretty competitive.
TERM DEPOSIT/SAVINGS RATE CHANGES
Kookmin Bank raised term deposit rates today. Unity Money raised their six month TD to 5.50% as a 'special'. ASB raised its Business Saver rate by +35 bps to 2.10% matching BNZ, but less than ANZ and very much less than Kiwibank's 3.90% rate for this type of account. Update: Westpac has raised its 3, 6 and 9 month TD rates, taking their 6 month rate to 5.00%, and catching up to their main rivals.
CREDIT CARD CHANGES
TSB has launched a new Mastercard credit card offering that features a low rate option at 9.95% - including for cash advances, which is a bit unusual and better than most.
SPINNING IN PLACE
ANZ released its Truckometer analysis of traffic movements to February, and despite the lockdowns and cyclone-affected disruptions they say the data is "consistent with the recent observed slowdown in retail spending."
THE AFFORDABILITY PRESSURE IS GREATER FOR RENTERS
Stats NZ has released its household income and housing-cost data providing income and expenditure information for the year to June 2022. They say it shows housing affordability is significantly more challenging for renters than homeowners. One in 4 households that were renting were spending more than 40% of their disposable income on housing costs, compared with 1 in 5 households that were paying a mortgage. They say rents continued to increase at a faster rate than mortgage payments. Over the last 15 years, average weekly rent payments have increased +93%, compared with a +49% increase in average weekly mortgage payments.
SCAMMERS INNOVATE
CERT NZ’s latest annual summary of online crime shows that scammers are still finding new and inventive ways of getting to our money. Financial losses jumped +19% to $20 mln, mostly due to a spike in Q3-2022. These are the biggest losses reported to CERT NZ in a single year. Phishing and credential harvesting, scams & fraud, and unauthorised access all saw significant increases and unauthorised money transfer scams targeted individuals for some large losses.
NEW OWNER, BIG RECOVERY
Yili-owned Westland Milk has had a significant financial turnaround, posting record sales and a $120 mln recovery in profit compared to last year. Revenue rose to more than $1 bln in 2022 for the first time ever, a significant +27% rise built on a shift to higher-value products
ETS UNDER REVIEW NOW
The Ministry for the Environment has announced the Emissions Trading Scheme (ETS) will be reviewed to assess what changes are required to encourage emitters of CO₂ to reduce their emissions rather than simply offsetting pollution by planting trees. The carbon price hasn't recovered since the failed tender recently, back down to $64.50/NZU today
MOUNTING COST
Cyclone Gabrielle insurance claims have now topped 40,000. More than half the claim value of $890 mln so far comes from Hawke's Bay.
NZGB BOND TENDER SUCCESSFUL
118 bln totaling $1.145 bln were received for the three NZGB tranches on offer today. 60 won something. Yield shifts were lower than month-ago equivalent events, but higher for the 2-month-ago May 2032 bond. More here.
HONEYPOT STRESS
NZ On Air's funding source for media has become such an essential honeypot for program producers that NZ On Air is having to limit the number of applications they will accept from applicants. Applicants have learned how to game the system with multiple requests. You do have to wonder how many of these producers will fare if this funding window is limited or closed. There seems little evidence this money is just seed or startup funding to allow transition to fully commercial demand without the need for taxpayer support. It has built into a core addiction.
GROWING FAST
Canada's population is now approaching 40 mln in a fast 2022 spurt. They added a record +1 mln new people over in 2022, largely boosted by immigrants and the substantial intake of Ukrainian refugees. The expansion is a stunning +2.7% in one year, their fastest ever post WWII.
ANOTHER STATE TO REJECT THE AUSSIE LIBERAL PARTY
In Australia, the State of NSW votes this Saturday, and the latest poll suggest that the ALP is widening its lead over the Liberal incumbents. (The Murdoch media promotion of the Liberals appears to be toxic in Australia.)
FED FALLOUT
The US Fed's +25 bps rate hike earlier today to 5.0%, and its decision to focus on inflation-fighting rather than bank stability, has played out in markets with US equities falling, US bond yield's falling, and the USD retreating. Bitcoin fell sharply. But most of these shifts have been relatively minor, as markets return to the repricing discounts and benchmark interest rates rise. Some are hoping the +25 bps is the last of the Fed increases, but they are a minority. Falling asset valuations will have severe consequences for many investors, but the rebalancing of prices with income is a shift that needs to happen. Just because rich investors feel pain in this adjustment process isn't a reason not to do it. What is pretty special is that the US labour market has held buoyant for so long. It may continue a while yet, although it won't do so forever. The Fed needs it to pull back and will probably keep hiking until it does. (The rest of us are just along for the ride.)
SWAP RATES STAY DOWN
Wholesale swap rates have probably not moved much today, holding their lower levels. 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 unchanged at 5.15% and still +40 bps above the current OCR. Markets are pricing in less than a +25 bps rise at the next RBNZ review on Wednesday, April 5, 2023. The Australian 10 year bond yield is now at 3.31% and down a minor -1 bp from this time yesterday. The China 10 year bond rate is little-changed at 2.88%. And the NZ Government 10 year bond rate is now at 4.23% and well above the earlier RBNZ fix at 4.13% which was down -8 bps from yesterday. The UST 10 year yield is down -12 bps today, now at 3.47%, although earlier it was down -16bps.
EQUITIES MOSTLY LOWER
In New York, the S&P500 ended its Wednesday session down a sharp -1.7% after the Powell press conference. In the initial Fed decision release it rose +0.7% but then slumped with a gross move of -2.4%. Tokyo is down -0.6% in morning trade there. Hong Kong is up +0.6% but Shanghai is down -0.1% in their early trade. The ASX is down -0.7% in afternoon trade while the NZX50 is down -0.4% in late trade today.
GOLD RISES
In early Asian trade, gold is up +US$22 from this time yesterday at US$1967/oz. But that is slightly lower than the US$1970/oz it closed at in New York.
NZD RISES
The Kiwi dollar has risen more than +½c from this time yesterday, now at 62.5 USc. Against the Aussie we are firmer, now up nearly +½c to 93.1 AUc. And against the euro we are holding at 57.4 euro cents. That means the TWI-5 is now up to 70.2 and up +30 bps in a day. Some international analysts are essentially saying it is a good time to short the NZD, but so far their expertise isn't working for them.
BITCOIN SHIFTS LOWER
The bitcoin price has fallen -2.4% from this time yesterday, now at US$27,428. Volatility has been very high today at +/-4.1%.
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