A review of things you need to know before you sign off on Wednesday; BNZ pushes through rate changes, dairy prices slip, weak residential building, Spark makes xtra costly, swaps unchanged, 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
BNZ trimmed its key home loan rates but not below what others are offering. More here. The Co-operative Bank will also be trimming home loan rates tomorrow.

TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ also cut some TD rates, but apart from the 1 year rate, their other cuts were to rates 2 years and longer and did not affect the most popular shorter terms. The Co-operative Bank will also be trimming TD rates for terms 2 years and longer tomorrow as well.

DAIRY PRICE WATCH
Today's dairy auction brought a small -2.3% reduction in prices, as signaled by the weekly Pulse event last week. We should keep an eye on Chinese inventories, because they could rise quickly as their economy slows, and their lack of demand would hurt us. In a parallel environment of minerals processing, China's production in many sectors has been very high recently while demand hasn't followed - so inventories are rising quickly. They aren't out of range yet but unless demand picks up or production falls soon, they will quickly become a problem. The Aussies are watching nervously. We should pay the same attention to dairy inventories too.

NOT A DRAG AT ALL
Stats NZ is into its final updates ahead of the big Q4-2023 release on Thursday, March 21. Today, building work data was released and there were no surprises. Westpac's economists note: "Construction activity was broadly steady in the December quarter, falling just -0.1%. That was close to our forecast, with residential activity slowing but resilience in non-residential building." Q4-2023 residential building values were -1.3% lower than the same quarter a year ago, but non-residential completes were up +14.3% on that same basis.

TIME TO TAKE THE HINT
Spark told its Xtra email users that it will start charging for the service from May 16, 2023. The costs will be steep, $5.95/month if you are a Spark customer, $9.95/month if you are not. Basically they want you to go away - and you should. There are much better (and free) alternatives. Analysts have guessed there may only be as few as 20,000 active Xtra email accounts in operation, mostly legacy accounts from when the service started in 1999.

RBNZ SETTLEMENT ACCOUNT REVIEW UPDATE
The Reserve Bank (RBNZ) has provided an update on the review of its Exchange Settlement Account System (ESAS), which processes and settles payments between banks and other financial institutions. It says two significant issues have been raised through consultation being requests for ESAS accounts for non-settlement purposes, and clarification on how the policy would balance objectives around innovation and competition relating to requirements for integrity and reliability. This feedback warrants more research, the RBNZ says, leading to a revised approach aiming to "balance our initial risk-based approach with considering the benefits ESAS access brings, particularly around innovation and competition." The RBNZ is now targeting late 2024 to release the final policy and open invitations for new ESAS applications for non-bank applicants at the end of the year.

JUMPING TO A WRONG CONCLUSION
Readers of this column will recall us suggesting the the good Australian current account data was likely enough to ensure a good Q4-2023 growth outcome for economic activity (GDP) in Australia. Well that was a misplaced reading. The GDP data today disappointed many, with real economic activity up just +0.2% in the quarter, up +1.5% over the year. Clearly, the contribution from households was lower than expected amid budget and rate pain.

STICKY
We should perhaps note that the South Korean inflation rate ticked up above 3% again in February. They are having "last mile" problems too.

SWAP RATES HOLD
Wholesale swap rates will probably be little-changed again today. Our chart below records the final positions. The 90 day bank bill rate is down a minor -1 bp at 5.65%. The Australian 10 year bond yield is down -2 bps from yesterday at 4.10%. The China 10 year bond rate slipped an unusual -4 bps, now just under 2.33%. And the NZ Government 10 year bond rate is down -6 bps to 4.76%, while the earlier RBNZ fixing was at 4.69% and down -7 bps from yesterday. The UST 10 year yield is now at 4.22% and up +2 bps from this time yesterday. The UST 2yr is now down to just on 4.61% and so that key inversion is out to -39 bps.

EQUITY WINNERS & LOSERS
Wall Street ended down a full -1.0% the S&P500, dragged down by tech stocks. Tokyo has opened down -0.3% today and is now back below the 40,000 index level on the Nikkei225. Hong Kong has opened up +0.3% after yesterday's large fall. Shanghai is holding the line, unchanged. Singapore has opened up +0.8%. The ASX200 is down -0.3% in afternoon trade. And the NZX50 is down -0.4% in late trade today.

OIL SOFTER
Oil prices are about -US$1 lower at just over US$77.50/bbl in the US while the international Brent price is now just over US$81.50/bbl.

GOLD UP AGAIN
In early Asian trade, gold is now at US$2127/oz and up +US$16 in a day, and to a new record high. Aussie gold mining equity prices have had a +10% value rise in March aloe so far.

NZD SOFT
The Kiwi dollar has dipped another -10 bps from this time yesterday, now at 60.8 USc. Against the Aussie we are marginally softer at 93.5 AUc. Against the euro we are softer at 56 euro cents. That means the TWI-5 is down -20 bps today. It is not helpful being a commodity currency.

BITCOIN ALL OVER THE PLACE
The bitcoin price has retreated today, now at US$63,584 and down -7.1% from this time yesterday. But volatility has been extreme at almost +/- 8% today. At one point in the past 24 hours it rose to US$69,209; and at another it fell to US$59,707. Also, see this.

This soil moisture chart is animated here.

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