A review of things you need to know before you sign off on Friday; no retail rate changes, awful retail trade results, FHB affordability improves, WIA borrows big, 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
No changes to report today.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here today either.

HOUSEHOLD CONSUMPTION SQUISHED
Retail sales volumes shrank in the December quarter and that is the eighth quarter in a row it has declined. But wait, there's more (or, in this case, less). Sales volumes are -4.1% less than a year ago. And if you think that is tough, remember our population is rising at its fastest rate ever. This emphasises the pressures individual households are under and who are trimming real retail spending sharply now. "And looking forward, it’s not clear that this will change significantly over 2024." says the ANZ economists. They and other economists see downside risks to their positive GDP forecasts for Q4-2023 in this data. Q4-2023 GDP outcomes will be released on Wednesday, March 21, 2024, and there is a lot more data than just retail sales that goes into this. But weak consumption is an important indicator.

FINALLY, A SHIFT IN THE RIGHT DIRECTION
Falls in house prices at the bottom of the market are good news for first home buyers. And that has brought a significant improvement in affordability for first home buyers In January. Although still unaffordable (ie more than 40% of take home pay), this is the best/lowest it has been since September 2022. First home buyer affordability stress started getting tough in late 2021 when lower quartile house prices raced higher suddenly in the housing frenzy that built up in the pandemic (induced by "low interest rates").

PROFILE UPDATE
The full year results for market operator NZX were released today, and our profile is updated here. All NZX50 profiles are indexed here.

MINNOW AMONG SHARKS
New Zealand is taking up the role of Vice Chair of the WTO negotiating team that will be tackling 'reform' of agriculture trade rules, E-commerce, fisheries subsidies, and the dispute settlement resolution system, by trade minister in Abu Dhabi/UAE. Their conference runs from Monday to Thursday. Trade minister Todd McClay has left early to prep for his central role in this round of what seems like never-ending talks. It is pretty doubtful the NZ rural sector will get any more from a National trade minister than it got from the previous Labour one.

ANOTHER $100 MIL BORROWED
Wellington International Airport has issued $100 mln of unsecured, unsubordinated 6½ year BBB-rated bonds, with a yield of 6.02% pa. One covenant WIA offers is that "Total Interest Bearing Debt does not exceed 70% of Total Tangible Assets". Much of it will be used to refinance its $60 mln bond maturing on 5 August 2024. That has a coupon of 4.0% and a current yield to maturity of 6.48%.

BUT NOT US (?)
The US has recently moved to protect itself from vulnerabilities of using Chinese-made container cranes at their ports. That have assessed risks of high as they could be used in times of stress to shutdown activity. Auckland has nine container cranes, the three newest and main ones supplied by Shanghai Zhenhua Heavy Industry (ZPMC). Tauranga also has nine container cranes, most of them German Leibherr cranes.

PRIVATEER SUCCEEDS
We should also probably note that a private US company has landed a spacecraft on the Moon, at its south pole, in its first attempt. The lander is carrying a set  of scientific instruments and technology demonstrations for NASA and several commercial customers designed to operate for seven days on solar energy before the sun sets over the polar landing site. It is the first new American equipment on the Moon in 50 years.

SWAP RATES FIRMER
Wholesale swap rates will probably be firmer again today. However, the key reaction will come at the close. Our chart below records the final positions. The 90 day bank bill rate is up +2 bps at 5.73%. The Australian 10 year bond yield is down -1 bp at 4.19%. The China 10 year bond rate is down -2 bps to 2.41% and a new record low. And the NZ Government 10 year bond rate is up +1 bp to 4.93%, while the earlier RBNZ fixing was at 4.85% and unchanged from yesterday and for a third straight day. The UST 10 year yield is now at 4.34% and up +3 bps from this time yesterday. The UST 2yr is now up to just under 4.71% and so that key inversion is now out to -37 bps.

EQUITY WINNERS & LOSERS
Wall Street closed up +2.1%, helped a lot by the hype around the strong Nvidia result and prospects. In the three days to its Thursday close during this short week, the S&P500 is up +1.6% and at an all-time record high. The NZX50 is up +0.1% in late Friday trade and if it holds that, it will end the week down -0.2%. The ASX200 is up +0.5% in afternoon trade heading for a weekly dip of -0.2% as well. Tokyo ended yesterday up +2.2% for a weekly gain of +1.5%. It is closed today for a public holiday. Hong Kong has opened up +0.4% heading for a +2.9% weekly rise. Shanghai has opened up +0.4% heading for a state-aided +4.0% weekly rise.

OIL STAYS FIRM
Oil prices are up +50 USc to just under US$78.50/bbl in the US while the international Brent price is still at just over US$82.50/bbl.

GOLD ON HOLD
In early Asian trade, gold is now at US$2026/oz and little-changed from yesterday.

NZD ON HOLD
The Kiwi dollar is slightly higher from this time yesterday, now at 62 USc. Against the Aussie we are softish at 94.3 AUc. Against the euro we are unchanged at 57.2 euro cents. That means the TWI-5 is still at 71.3 today.

BITCOIN EASES SLIGHTLY
The bitcoin price has moved lower today, now at US$51,379 and down a minor -0.4% from this time yesterday. There's been modest volatility over the past 24 hours of just under +/- 1.%.

This soil moisture chart is animated here.

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