A review of things you need to know before you sign off on Tuesday; weather costs hit Crown Accounts, QSBO cools, big insurance payouts, GHG emissions fall, swaps on 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
There were no changes announced today.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.

IMMEDIATE IMPACT
The economic impact of the recent weather events are starting to show up in the 2022/2023 Crown Accounts. The February data shows that GST receipts were -7.3% lower than the same month a year ago. And PAYE tax deductions, which have been rising strongly up until January, faltered in February, up only +6.3% and half the rate of rise from earlier months. The costs are forcing taxpayers to pull back on consumption activity, and earnings are being affected too. The overall impacts are small in the year-to-date numbers, but they are quickly imposing themselves.

DEMAND FALTERS
While current economic activity isn’t weak, The latest NZIER Quarterly Survey of Business Opinion (QSBO) points to a cooling in demand. Capacity pressures are easing and businesses are more worried about sales than hiring. Cost pressures remain intense, which is squeezing margins. Crucially, it is expected the pressures on businesses’ finances will continue to mount over the year ahead.

BIG-TIME CLIMATE COST
The Insurance Council says the amounts claimed so far for the Auckland flood and Cyclone Gabrielle have now topped the amounts claimed for the Kaikoura earthquake, and almost reaching $2.5 bln.

GREENHOUSE GAS EMISSIONS TURN LOWER
Greenhouse gas emissions decreased -3.5% (-696 kilotonnes) in the September 2022 quarter, according to data released by Stats NZ today. This retreat follows successive increases over the previous three quarters and was driven mostly by significant reductions in the electricity, gas, water, and waste services industry, and in the manufacturing industry. Meanwhile the transport sector, and the household sector generated more GHG emissions. The agricultural sector booked a marginal reduction, and their emissions have been stable in absolute terms for 5 consecutive quarters.

ANOTHER TECH ISSUE
We have an issue delivering our charts today. Please bear with us while we get this utility back up. Sorry.

RBA HOLDS
As expected, the RBA kept its cash rate target unchanged at 3.60% rate. They see the US and Swiss banking problems will lead to tighter financial conditions, which would be an additional headwind for the global economy. But they are also battling very high local inflation, especially services inflation and the risks of cost-plus inflation remain high there. So they say they expect that some further tightening of monetary policy may well be needed to ensure that inflation returns to target. More here.

NOT SEEING A BIG CHANGE
The crude oil price is little-changed today at US$80.50/bbl in the US, and the international Brent price is still at $85/bbl. Apart from the initial reaction, there isn't a growing rise - so far at least. If it stays like this, the impact of the supply cut will be minimal.

SWAP RATES HOLD
Wholesale swap rates have probably been little-changed today ahead of tomorrows RBNZ OCR decision. 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 +1 bp to 5.25% and now +50 bps above the current OCR. The Australian 10 year bond yield is now at 3.29% and up unchanged from yesterday. The China 10 year bond rate is little-changed at 2.88%. And the NZ Government 10 year bond rate is now at 4.12%, down another -7 bps and well above the earlier RBNZ fix at 4.04% which was down a massive -14 bps from yesterday. The UST 10 year yield is now at 3.43% and down -9 bps from this time yesterday.

EQUITIES MIXED
The NZX50 is little-changed in late trade today. The ASX200 is also unchanged in early afternoon trade. Tokyo has opened up +0.2%. But Hong Kong has opened down -1.1% while Shanghai has opened up +0.3%. The S&P500 ended its Monday trade up +0.4%.

GOLD UP
In early Asian trade, gold is up +US$24 from this time yesterday, now at US$1981/oz.

NZD FIRMS
The Kiwi dollar has risen almost +¾c to just shy of 63 USc. Against the Aussie we are have dipped to 92.9 AUc. And against the euro we are little-changed at 57.8 euro cents. That means the TWI-5 is up at 70.7 and up +30 bps.

BITCOIN SLIPS
The bitcoin price has slipped from this morning's open, now at US$27,786 which is a retreat of -1.5%. Volatility has been modest however at +/-1.7%.

This soil moisture chart is animated here.

Keep abreast of upcoming events by following our Economic Calendar here ».