A review of things you need to know before you sign off on Tuesday; rate watch for cuts, QSBO picks up, job ads tumble, settlement balances rise as do the costs, swaps firm, NZD soft, & 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/LOAN RATE CHANGES
WBS (Wairarapa Building Society) has trimmed its 2 year mortgage rate.

TERM DEPOSIT/SAVINGS RATE CHANGES
Nelson Building Society (NBS) has trimmed its 2 and 3 year TD rates. And we have reviewed the risks that Kiwi Bond interest rates might slip soon. See here.

THE 'GOLDILOCKS' ZONE
The latest NZIER Quarterly Survey of Business Opinion (QSBO) showed a sharp pick-up in business confidence over the final quarter of 2023. While a net 10% of firms are still expecting a worsening in general economic conditions over the coming months on a seasonally adjusted basis, this is a significant decrease from the net 49% in the previous quarter and the net 79% a year ago.

JOB ADS TUMBLING - SUPPLY OUTPACING DEMAND
The BNZ/SEEK Employment Report shows that the number of applications per job advertisement has now hit unprecedented levels.

'UPCOMING GUIDANCE'
RBNZ will break its summer silence to address recent economic developments. Their chief economist will speak on January 30, a month before the first scheduled OCR announcement for the year in a move clearly aimed at guiding the markets after December's shock GDP fall.

THE COST OF HIGH SHORT TERM INTEREST RATES
Bank settlement balances at the RBNZ rose to $50.3 bln as at the end of 2023, the second highest month-end level of the year. But they were down almost -11% from the same month in 2022. These balances pay the OCR rate, so banks collectively earned $2.6 bln in interest in 2023, up from the $1.2 bln in 2022. Paying interest on these balances is a fundamental monetary policy strategy by the RBNZ." Paying the OCR on all settlement cash balances means that banks with settlement accounts have little incentive to lend settlement cash in the market at interest rates lower than the OCR. The OCR therefore acts as a floor under key short term market interest rates."

ALL-IN ON AI
Microsoft has gone all-in on AI, for both its customers and enterprise partners, releasing its Copilot feature for business customers locally. Juha Saarinen explains.

RUC EXEMPTION TO END
The new Government announced the exemption from road user charges (RUC) for owners of light electric vehicles (EVs) and plug-in hybrids will end from 1 April. They will pass legislation for lower rates for hybrids.

AUSSIE CONSUMER GLOOM
In Australia, the Westpac-Melbourne Institute Consumer Sentiment index fell -1.3% in January from December, remaining in negative territory now for nearly two years. A surge in the cost of living and high interest rates continued to dominate sentiment. The index has been below the 100 mark since February 2022, the longest streak since the early 1990s recession.

SWAPS RISE
Wholesale swap rates may be higher today. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is unchanged at 5.64% and unchanged from yesterday. The Australian 10 year bond yield is up +7 bps at 4.15%. The China 10 year bond rate is unchanged at 2.54%. And the NZ Government 10 year bond rate is up +6 bps at 4.69%, while the earlier RBNZ fixing was at 4.60% and up +2 bps from yesterday. The UST 10 year yield is now at 4.00% and up +4 bps from this time yesterday. The UST 2yr is at 4.20% and little-changed.

EQUITY WINNERS & LOSERS
The NZX50 is down -0.3% in late trade today. The ASX200 is falling hard in early afternoon trade, down -1.0%. Tokyo has opened down -0.3%. Hong Kong has opened down -0.2%. Shanghai has opened unchanged. Singapore is down -0.4%. The S&P500 futures suggest Wall Street will open tomorrow after its holiday break up +0.4%.

OIL LITTLE-CHANGED
Oil prices unchanged from yesterday at just on US$72.50/bbl in the US while the international Brent price is still at US$78/bbl. That is not to say it is stable; in between, this market has been jittery.

GOLD STILL ON HOLD
In early Asian trade, gold is now at US$2050/oz and unchanged from yesterday, and giving up the interim rises in other markets.

NZD SOFTER
The Kiwi dollar is now at 61.7 USc and down more than -½c from this time yesterday. Against the Aussie we are unchanged at 93.1 AUc. Against the euro we are down nearly -½c at 56.5 euro cents. That means the TWI-5 is now at 70.4 and down another -30 bps

BITCOIN LITTLE-CHANGED
The bitcoin price has firmed today to US$42,624 and up +1.0% from where we were this time yesterday. There's been modest volatility over the past 24 hours of just on +/- 1.4%.

This soil moisture chart is animated here.

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