A review of things you need to know before you sign off on Tuesday; migrants active house buyers, FHBs active mortgage borrowers, RBNZ holds the line, eyes on dairy prices, swaps stable, 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/LOAN RATE CHANGES
No changes to report today.

TERM DEPOSIT/SAVINGS RATE CHANGES
Only the Police Credit Union has changes today, trimming its 2 year TD rate to 5.60%

MIGRANTS BUY MORE HOUSES
Migrants made up a record share of house purchases in 2023 with more than 16,000 homes sold to buyers here on residence visas last year. That is the highest number in any year since Statistics NZ started collating the figures in 2017. REINZ reported there were 61,780 transactions in 2023, so that is 25%. (In fact it is likely to be less because not all sales are made though REINZ members, and new houses are often sold direct by the developer.)

FHBs BORROW MORE HOME LOANS
First home buyers have hit an all time high for share of new mortgage advances in December. The latest RBNZ figures show first home buyers picked up over a quarter of the new mortgage monies advanced in the final month of the year - although it was a slow month overall.

STILL HAWKISH
A somewhat hawkish speech by the RBNZ chief economist has put some upward pressure on the NZD, although it looks to have no impact in wholesale interest rates. In this case, 'hawkish' means the RBNZ has signaled it is staying the course to get inflation down and that rate cuts by them are not close yet.

DIRECTOR CHANGEOUT
TSB has announced that lawyer Kate Armstrong will join the bank's Board as a director. Armstrong was recently a senior manager at Westpac. She replaces retiring Kevin McDonald.

SBS BANK ISSUING 10YR BONDS
SBS Bank said it wants to issue up to $60 mln of unsecured, subordinated 10 year debt securities as redeemable shares. The Bonds are expected to constitute Tier 2 Capital for SBS Bank’s regulatory capital requirements. These bonds are expected to be rated BB+ by Fitch, so sub-investment grade. They are unlikely to be cheap funding. (For perspective, BNZ issued $375 mln in Tier 2 bonds in mid 2023 with a 6 year tenor, investment grade, and they were priced with a yield of 7.3%.)

EYES ON DAIRY PRICES
[Update: We got this wrong; there was no dairy auction overnight. It is next Wednesday, February 1, 2024. But there was a GDT Pulse event instead.] There is another dairy auction overnight. The dairy derivatives market is betting that WMP prices will keep on rising, possibly up +4%. And they are betting the stable run for SMP will be broken with a +5% rise for that foodservice product. We'll see.

RETAIL CASUALTY
The New Zealand Vacuum Cleaner Company has today entered Voluntary Administration. The company is part of the Australian-owned Godfreys Group and operates the group’s New Zealand retail stores. Godfreys Group’s Australian entities also entered Voluntary Administration today.

RETAIL WEAKNESS
Australia said that December retail sales were weaker than expected, falling -2.7% from November to be just +0.8% higher than year ago levels. That was the steepest drop since August 2020. This follows a revised rise of +1.6 in November and a fall of -0.2% in October 2023. Meanwhile inflation ran at about 4.3% over the same time, so retail volumes in 2023 shrank about -3.5%.

SWAP RATES HOLD
Wholesale swap rates will probably be little-changed 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 -7 bps at 4.16%. The China 10 year bond rate is down -3 bps at 2.49% and a 20 year low. And the NZ Government 10 year bond rate is down -3 bps at 4.75%, while the earlier RBNZ fixing was at 4.66% and down -2 bps from yesterday. The UST 10 year yield is now at 4.08% and down -5 bps from this time yesterday. The UST 2yr is at 4.33% and so that key inversion is back out to -25 bps.

EQUITY WINNERS & LOSERS
The NZX50 is unchanged in late trade today. The ASX200 is up another +0.4% in early afternoon trade. Tokyo has opened up +0.4% in early trade. But Hong Kong has dived -1.7% at its open giving up all of yesterday's gain and more. Shanghai which fell yesterday is down another -0.7% in opening trade today. (The one corner racing higher are ETFs for offshore companies.) Singapore is up +0.4% at its open. The S&P500 closed on Wall Street in Monday trade up +0.8%.

OIL SLIPS
Oil prices are down -US$1 from yesterday at just over US$77/bbl in the US while the international Brent price is now just over US$82/bbl.

GOLD FIRMS
In early Asian trade, gold is now at US$2031 and up +US$8 from this time yesterday.

NZD FIRM
The Kiwi dollar is now just on 61.4 USc and up almost +½c from yesterday at this time. Against the Aussie we are marginally firmer at 92.7 AUc. Against the euro we are +¼c higher at 56.6 euro cents. That means the TWI-5 is now at just over 70.3 today.

BITCOIN RISES
The bitcoin price is on the move higher today, now up to US$43,506 and a gain of +3.5% since this time yesterday. There's been moderate volatility over the past 24 hours of just under +/- 2.1%.

This soil moisture chart is animated here.

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