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.
TERM DEPOSIT/SAVINGS RATE CHANGES
Kiwibank says it's "pleased to be able to maintain leading rates across the major banks" in the six-month and one-year terms, "which have historically been the most popular terms for our customers". Kiwibank's increased its six-month offerings by 10bps, with a peak rate of 6.15%, while the rates from one-year and longer have all been dropped by between 5bps and 15bps.
AUCTION SALES RATE STUCK ON A THIRD
The number of residential properties being offered at auction declined for the second week in a row last week but there was no change in the overall sales rate.
PATH OF EXPANSION
New Zealand’s services sector continued its path of expansion in February, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for February was 53.0 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was up 0.8 points from January and the highest level of activity since March 2023. However, it was still just below the long-term average of 53.4 for the survey. BusinessNZ chief executive Kirk Hope said that three of the last four months has seen the sector in expansion, with the key sub-index results for both Activity/Sales (53.1) and New Orders/Business (56.0) remaining in positive territory for the current month.
HOUSING 'PRIMED FOR TAKEOFF' - AFTER RATE CUTS
Kiwibank economists expect the Reserve Bank to start the rate cutting cycle by November this year. Wholesale rates should fall as expectations for rate cuts build. And these lower wholesale rates will enable further cuts to carded mortgage and business lending rates. "The result? Higher house prices," they say. "Once rate cuts come through, it will be a new chapter for the housing market. We are forecasting a strong 5-7% increase in house prices this calendar year."
ECONOMISTS AGREE GROWTH WILL BE WEAK
The latest NZIER Consensus Forecasts show a downward revision to the growth for the coming year. Annual average GDP growth for the year ending March 2024 has been revised down to 0.5% and is is seen remaining weak at 0.8% for the year ending March 2025. These forecasts come of course as we await this week GDP figures for the December quarter that are likely to be underwhelming.
MORE SEEING +$8 MILK PRICE FOR NEXT YEAR
The outlook for the milk price for farmers looked okay this season. Then it looked terrible. Now it's looking a bit better and its looking a bit better again for next season, with economists increasingly settling on a better than $8 per kilogram of milk solids price. ASB economist Nat Keall's going for $8.30, but sees the risks to the price as being "a bit more balanced".
REMINDER
If you haven't done so yet, we would appreciate it if you could complete our car insurance survey. More about it here. The survey itself is here.
SWAP RATES MOVE UP
Wholesale swap rates are likely a little higher Monday. Our chart below records the final positions. The 90 day bank bill rate is unchanged again at 5.65%. The Australian 10 year bond yield is unchanged at 4.14%. The China 10 year bond rate is down 2bs at 2.32%. But the NZ Government 10 year bond rate is up 2 bps at 4.75%. The UST 10yr yield has started the week at 4.31% and unchanged from Saturday but is up a sharp +29 bps in the past week.
EQUITY WINNERS & LOSERS
The NZX50 has started the week with a 0.5% retreat, while the ASX200 is down 0.1% in early afternoon trade. Tokyo, however, has opened markedly higher, by 2.3%. Hong Kong opened slightly down but more recently was just up for the day, but Singapore was very slightly down. Shanghai's up 0.5%. The S&P500 futures are currently suggesting Wall Street will open very slightly higher overnight Monday our time with a 0.1% rise.
LITTLE OIL MOVEMENT
Oil prices haven't moved much on Monday, with WTI just up slightly to over US$81/bbl in the US while the Brent price has similarly edged up to US$85/bbl.
GOLD SLIPS AGAIN
In early Asian trade, gold was at around US$2152/oz, down around US$4 from its starting point for the day.
NZD ON STILL HOLD
The Kiwi dollar is at 60.9 USc and up very slightly from Monday morning. Against the Aussie we are slightly down at just under 92.8 AUc. Against the euro we are still at 55.9 euro cents. That means the TWI-5 is holding at 69.3.
BITCOIN PERKS UP AGAIN
Bitcoin's had one of those tempestuous weekends, but it has started the week in a more perky mood again, up about 2.1% in the past 24 hours to US$67,850.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.