A review of things you need to know before you sign off on Friday; more retail rate cuts, more holiday interruptions, eyes on some large equity retreats, swaps little-changed, NZD stable, & 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
SBS Bank has cut -10 bps from its fixed rates for most terms, but -20 bps for its two year fixed rate. More changes from other banks will be coming on Monday.

TERM DEPOSIT/SAVINGS RATE CHANGES
SBS Bank has cut -25 bps from its 18 month and 2 year TD rates, and cut -40 bps from its three year rate. (But it has left its 6.15% rate unchanged for 9 and 12 months.)

STAGGERED HOLIDAYS
It is Australia Day today, so there is no financial trade there. It will be Auckland Anniversary Day on Monday. While some of our staff will be on holiday, we will have a full day of news. And there are some interesting data scheduled to be released on Monday. And don't forget, this year Waitangi Day is on Tuesday week, February 6. That probably means Monday, February 5 will be a day of light economic news. And there's more. In 2024, Chinese New Year begins on Saturday, February 10 and continues for 15 days, with the Lantern Festival marking the end of the celebrations from Thursday, February 22 to Sunday, February 25.

REALITY SETS IN
Analysts are pointing out that despite the sharp resurgence of the past few days, Chinese equities are being sharply discounted by investors. Overall price-to-book ratios there have dropped to a five-year low. Property and finance companies are particularly hard hit. Overall P/B ratios are now under 2x there, their lowest since 2005. (It peaked at nearly 8x in 2008.) Some financial companies have P/B rations at less than 1x. For perspective, the current S&P500 P/B ratio is over 4x. The Nikkei225 ratio is over 2x and rising in a market that has traditionally held low valuations. It still isn't clear that the recent PBoC reserve ratio cut, nor the new huge government share market stabilisation fund will stem the down drift. Short-term they might have, but they have tried these things in earlier crises and they haven't worked. In the past, only "more debt" has put off the reckoning. Investors are now insisting on reality and won't overpay.

DISAPPOINTMENTS
But it is not all roses for US listed stocks either. Tesla reported disappointing results and its stock fell -12% on the day to be down -29% over the past month in anticipation. Intel disappointed too in a report released just as Wall Street closed, and its stock fell -11% after the close. Generally however, the American earnings season has been strong in the current cycle.

SWAP RATES HOLD
Wholesale swap rates should be basically unchanged 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 5.66%. The Australian 10 year bond yield is down -4 bps at 4.22%. The China 10 year bond rate is down -2 bps at 2.51%. And the NZ Government 10 year bond rate is down -6 bps at 4.77%, while the earlier RBNZ fixing was at 4.72% and down -3 bps from yesterday. The UST 10 year yield is now at 4.10% and down -7 bps from yesterday. The UST 2yr is at 4.28% and down -10 bps, so that key inversion is now less at -18 bps.

EQUITY WINNERS & LOSERS
The NZX50 is down -0.5% in late trade today but will be up +1.4% for the week if that holds. The ASX200 is on holiday and not trading having booked a short-week +1.9% rise. Tokyo is down -1.0% in morning trade heading for a -1.2% weekly fall off its record high. Hong Kong is little-changed in early trade and is heading for a strong +5.5% weekly gain. Shanghai is unchanged at its open heading for a +2.9% weekly rise. In New York, the S&P500 ended its Thursday session with a smallish comeback and booking a +0.5% rise on the day. Intel and Tesla might weigh on Friday trade tomorrow however.

OIL RISES
Oil prices are up about +US$2 at just under US$77/bbl in the US while the international Brent price is now just over US$81.50/bbl.

GOLD FIRMS
In early Asian trade, gold is now at US$2021 and up +US$6 from this time yesterday. It closed earlier in London at US$2025/oz.

NZD ON HOLD
The Kiwi dollar is now just on 61.1 USc and unchanged this time yesterday. Against the Aussie we are down -30 bps to 92.7 AUc. Against the euro we are little-changed at 56.3 euro cents. That means the TWI-5 is still at just over 70.1 to end the week.

BITCOIN HOLDS
The bitcoin price has moved down slightly today to US$39,918, only a minor drop of -0.3% from where we were this time yesterday. There's been low volatility over the past 24 hours of just on +/- 0.9%.

This soil moisture chart is animated here.

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