A review of things you need to know before you sign off on Wednesday; employment confidence still positive, labour productivity up, insurers post sharply lower profits, Aussie inflation eases, swaps up, 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
None to report today.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either

'WHERE IS THIS NEW ZEALAND?'
The FMA has issued a formal warning to Vanguard (actually, Vanguard Investments Australia), for failing to lodge a required notice on the New Zealand Companies Office Disclose Register. A notice should have been lodged of an exercise of power taken against it, by the Australian Securities and Investment Commission. Vanguard is an American registered investment manager with more than US$8 tln in global assets under management (about Japan+Germany GDP).

'GETTING BY, NOT GETTING AHEAD'
The Westpac-McDermott-Miller employment confidence index rose slightly in March as perceptions of the labour market stayed firmly positive (and better than the 2009-2016 period) - even if it isn't as overheated as it was in the 2017-2019 period. But confidence about earnings remains subdued, as wage growth continues to be eaten up by the rising cost of living.

BETTER, BUT NOT GREAT
Labour productivity rose 2.2% in the year ended March 2022, according to figures released today by Stats NZ. This was was largest growth in the measure since 2010 and came during the heart of the pandemic. Labour productivity measures the quantity of goods and services (output) produced per hour of labour. This is a part of multifactor productivity, which rose 1.2% in the same period. "Multifactor productivity captures the effects of unobserved inputs such as technological progress, efficiency gains, and economies of scale." The fact that multifactor productivity rose less than labour productivity isn't a great sign and probably relates to a reluctance to invest during that year. We should also note that StatsNZ only measures productivity in the "measured sectors" or about of the economy. Predominantly non-market service industries like education and healthcare are not included in the measured sectors. That almost certainly means overall national productivity isn't as positive as the headline suggests.

ITS TOUGHER TO MAKE A BUCK IN INSURANCE
Updated data from the RBNZ on the insurance industry shows a sector that is struggling somewhat. General insurance premiums rose +9.6% in 2021 from 2020, and by another +9.5% in 2022. But life insurance premiums hardly moved. The net result is that industry profits have fallen from $969 mln in 2020 to $902 mln in 2021, and slumped to $636 mln in 2022. Risks and costs are rising faster than premium income. And it is unlikely to get any better in 2023.

LOWER THAN EXPECTED
In Australia, their inflation rate is moderating, although it remains very high. Their CPI rose 6.8% in the year to February, easing from a 7.4% gain in the year to January. This was less than the 7.1% expected and was the second straight month of lower annual inflation and the softest pace since last June. The easing is largely due to slower rises in prices of housing, food, and transport. Financial markets were pricing virtually no change to the RBA cash rate at next week's review, and may be vindicated by this CPI update. But ANZ says it thinks the RBA will hike by +25 bps again next week because inflation is "still too high". New Zealand won't get its March CPI update until April 20.

SWAP RATES RISE AGAIN
Wholesale swap rates have probably risen again today. 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 up another +2 bps at 5.19% and +44 bps above the current OCR. However markets are pricing in less than a +25 bps rise at the next RBNZ review on Wednesday, April 5, 2023 and one week from today. The Australian 10 year bond yield is now at 3.32% and up +4 bps from yesterday. The China 10 year bond rate is unchanged at 2.88%. And the NZ Government 10 year bond rate is now at 4.14%, up another +2 bps and back to being above the earlier RBNZ fix at 4.11% and up +1 bps from yesterday. The UST 10 year yield is now at 3.58% and up another +6 bps from this time yesterday.

EQUITIES ALL OVER THE PLACE
The NZX50 has had a tough day, currently down -0.9% near the end of trade although it has been falling increasingly through the session. Not so in Australia where the ASX200 is now up +0.1% in afternoon trade after a down start. Tokyo has opened its Wednesday trade up +0.5%. Hong Kong is doing its usual volatile thing, up +2.7% in very early trade. Shanghai has opened unchanged. Earlier, Wall Street closed its Tuesday session with the S&P500 down just -0.2% with a late rally.

GOLD FIRMISH
In early Asian trade, gold is up +US$4 from this time yesterday, now at US$1968/oz, although that is down from the New York close earlier in the day at US$1974/oz.

NZD FIRMER
The Kiwi dollar has risen again today, now at 62.6 USc. Against the Aussie we are firm too at 93.4 AUc. And against the euro we are firm at 57.7 euro cents. That means the TWI-5 is now at 70.5 and up +40 bps.

BITCOIN FIRMS
The bitcoin price has risen from this time yesterday, now at US$27,410 and up +1.8% in a day. Volatility has been modest today at +/-1.6%.

This soil moisture chart is animated here.

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