A review of things you need to know before you sign off on Friday; Westpac trims rates, fewer big renos, Zollner goes full hawk, space center opens, 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). It's a skinny edition today.

MORTGAGE/LOAN RATE CHANGES
Westpac cut many of its fixed home loan rates today. Details here. Other banks will no doubt follow. Discretionary discounts are active at all banks at present. You just need to ask. For example ANZ's carded 1 year rate of 7.39% can be had for 6.89% for existing customers. But their carded 2 year 6.89% rate can be had for only 6.85% however. No doubt the large 1 year discretion discount will pull back when/if ANZ changes rates next week. But we will all just have to wait and see how this plays out. Separately, Kookmin Bank has cut its 2 to 5 year fixed rates today.

TERM DEPOSIT/SAVINGS RATE CHANGES
Westpac also trimmed a number of term deposit rates as well, generally by more than the mortgage rate cuts. However a few days ago they did raise their 6 and 8 month rates.

FEWER CONSENTED RENOS
The number of homes having major alteration work done is steadily declining. The volume of building consents issued for major dwelling alterations is down -15% over the last two years and from the recent peak in February 2022. The current declines are the most since 2011.

SHOCK FROM ORR?
Economists at our largest bank now say the Reserve Bank could shock in their next two reviews by lifting the Official Cash Rate +50 basis points to 6%. Meanwhile many other economists are backing off their 2024 rate cut predictions, or at least pushing them much further out, as the data that drives the RBNZ's decision-making turns to not support rate cuts.

MORE LOCAL SPACE INFRASTRUCTURE
The new runway at the Tāwhaki National Aerospace Centre near Christchurch opened today. US-based Wisk Aero recently conducted its world-first airspace integration test flights for an uncrewed aircraft from Kaitorete, and Dawn Aerospace and Kea Aerospace will now conduct horizontal space launches and stratospheric flights from the site.

AUSSIE HOUSEHOLDS SPEND LESS
Household spending rose +2.3% in December from a year ago in Australia. This was the smallest growth in household spending since February 2021. But that is before inflation was accounted for. Discretionary spending actually fell -0.6% (also before accounting for inflation). This data highlights how their cost-of-living crisis is affecting them.

AN IMPORTANT CHANGE COMING
We should note that next Wednesday is election day in Indonesia. They will get a new president. Indonesia (the world's fourth largest country by population) rarely features in Kiwi minds. (It should do.) But it does figure large in Australia, and if it matters to Australia, it will end up mattering to us.

SWAP RATES RISE FURTHER
Wholesale swap rates will probably be higher yet again today, perhaps boosted by ANZ's big call. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is down -1 bp to 5.69%. The Australian 10 year bond yield is up +1 bp at 4.13%. The China 10 year bond rate is little-changed at 2.44%. And the NZ Government 10 year bond rate is up another +4 bps at 4.89% and a one month high, while the earlier RBNZ fixing was at 4.79% and down -2 bps from yesterday. The UST 10 year yield is now at 4.15% and up +5 bps from yesterday. The UST 2yr is at 4.44% and so that key inversion is now just under -30 bps.

EQUITY WINNERS & LOSERS
The S&P500 closed its Thursday session little-changed at 4998 index level. At no time did it touch or breach 5000 however. But the NZX50 is down -0.5% late in its Friday session and heading for a weekly -0.8% retreat. But the ASX is up +0.1% in early afternoon trade, and if it holds that will end their week down -0.6%. Tokyo is up +0.3% at their open heading for a +1.6% rise. Hong Kong has opened its Friday session down -1.7% but is heading for +1.6% weekly rise. Shanghai is on holiday for their Lunar New Year break. Singapore has opened down -0.6%.

OIL PRICES UP
Oil prices are up +US$2 from this time yesterday at just over US$76/bbl in the US while the international Brent price is now just under US$81.50/bbl.

GOLD EASES SLIGHTLY
In early Asian trade, gold is now at US$2034 and down -US$3 from this time yesterday.

NZD FIRM AGAIN
The Kiwi dollar is now just on 61.2 USc and marginally higher than this time yesterday. But it has been volatile in between. Against the Aussie we are up sharply, up +¾c however to at 94.3 AUc. We haven't been this high since May 2023. Against the euro we are holding at 56.8 euro cents. That means the TWI-5 is now at just under 70.5 today and up +10 bps from yesterday.

BITCOIN FALLS BACK
The bitcoin price has fallen back today, now at US$45,361 and down -2.5% from this time yesterday. There's been modest volatility again over the past 24 hours of just on +/- 1.3%.

This soil moisture chart is animated here.

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