A review of things you need to know before you sign off on Tuesday; Bank of China moves retail rates, workers not feeling more job risk, FSCL issues warning to SMEs, swaps firm, NZD holds, & 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
Bank of China cut its fixed home loan rates sharply today, generally by -20 to -4 bps for terms 18 month and longer. Now only Heartland Bank has lower offers for these terms.

TERM DEPOSIT/SAVINGS RATE CHANGES
Bank of China raised rates for terms to 6 months, and lowered them for terms 1 year and longer. Its new 6 month rate is now 6.20% and its 1 year rate is now 6.25%.

WORKERS SIGNAL MORE JOB CONFIDENCE
Westpac reports that its employment confidence survey found employees are less nervous about the future. That report showed employment confidence rose by 4.7 points to 104.4 in the March quarter, the second rise in a row. Jobs are still seen as getting harder to find, consistent with the forecasts of a further rise in unemployment in the months ahead. But current workers are feeling more confident about their job security, and are becoming more positive about earnings growth as inflation has receded from its highs.

OMBUDSMAN'S WARNING FOR SMALL BUSINESS OWNERS
Financial Ombudsman Financial Services Complaints (FSCL) is warning small business owners to seek advice before applying for business loans because protections under the Credit Contracts and Consumer Finance Act only apply to consumer loans, and responsible lending obligations don't apply. FSCL's Susan Taylor cites an increase in complaints from small business owners struggling to repay loans. “A common issue in some of the complaints we are seeing is that the lending was allegedly unaffordable, and often a secondary issue is that the borrower considers the lender has not been fair in their response to hardship”, says Taylor. “A business loan carries risk because a lender may have the power to place a caveat on a property, require security over assets including the family home or take personal guarantees. While borrowers can apply for hardship assistance when struggling to keep up with a consumer loan – and the lender is legally obligated to consider a hardship application – this is not the same for business loans."

THE BIG GETS BIGGER
StatsNZ only provides regional GDP data annually, to March and on a one year delay. Despite it being old, it does provide some interesting insights all the same. For years, Wellington per capita economic activity was the highest of any region. But not now. Auckland caught up in 2023 and has undoubtedly passed it on a per capita basis in 2024. It was up +9.0% in 2023 after being up +10.1% in 2022. And the share of Auckland of all economic activity reached 38.2% in 2023, the highest ever. In 2000 it was 35.8%. In 2019 it was 37.6%. Rightly or wrongly, the Queen City is growing its economic dominance. (This regional series doesn't extend back earlier than 2000.)

THE SMALL COUSIN
Keeping populations in perspective, we should note that Auckland region (basically Auckland City) had a population of 1.7 mln of a national 5.2 mln. Data out today in Australia shows Sydney had a population of 5.5 mln, Melbourne 5.2 mln, Brisbane 2.7 mln, Perth 2.3 mln, and Adelaide 1.4 mln.

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MORE CAPACITY, BUT STILL SMALL
The RBNZ's foreign currency intervention capacity was almost at $20 bln at the end of February. That was up +$7.9 bln from the same month a year ago, the most ever, but almost half of that rise was in July 2023.

SIGNS OF LIFE IN THE MORTGAGE MARKET
The latest mortgage figures from the Reserve Bank show that for February there was a seasonally-adjusted rise of +4% in borrowing, while the latest figures are up some +28% on the dire February 2023 figures

WARNED
The Financial Markets Authority has cautioned two Southern Cross entities for neglecting to apply advertised discounts on insurance products, causing almost $600,000 in overcharged premiums.

KIWIBUILD STILL A VERY TOUGH SELL
It is tough selling houses these days. Now KiwiBuild is having to discount them to get them moved. Kāinga Ora says its Alfriston committed duplexes with two bedrooms, 74m2 (but no car park) start at $675,000.

LOW FOR A TOUGH REASON
Although it is near a 20 month high, that is not saying much. The Westpac-Melbourne Institute consumer sentiment index is still very low and showing no real signs of recovering. Cost of living pressures are said to be keeping it low.

SWAP RATES FIRM
Wholesale swap rates are likely to be a little firmer today. Our chart below records the final positions. The 90 day bank bill rate is back up + 1 bp to 5.64%. The Australian 10 year bond yield is up +4 bps at 4.06%. The China 10 year bond rate is little-changed 2.33%. The NZ Government 10 year bond rate is up +6 bps from this morning at 4.66% and the earlier RBNZ fix was at 4.62% and back up +7 bps. The UST 10yr yield is up +3 bps at 4.24%. Their 2yr is now at 4.58%, so the curve is now inverted less, now by -34 bps.

EQUITIES EASE LOCALLY
Wall Street ended its Monday session down -0.3% earlier today. Tokyo has opened little-changed. Hong Kong is up +0.6% at its open. Shanghai is up a minor +0.1%. Singapore has opened up +0.5%. Meanwhile, the ASX200 is little-changed in afternoon saving. The NZX50 is down -0.3% in late trade.

OIL PRICES FIRMER
Oil prices have risen +US$1 today to US$82/bbl while the international Brent price is up about half that, now at US$86/bbl.

GOLD ON HOLD
In early Asian trade, gold is little-changed from this time yesterday, still at US$2173/oz.

NZD HOLDS SOFT
The Kiwi dollar is back to where it was this time yesterday at 60 USc. Against the Aussie we have stayed down at 91.8 AUc. Against the euro we are softish at 55.4 euro cents. This all means the TWI-5 has remained at just under 69.2.

BITCOIN RISES
The bitcoin price has firmed since this time yesterday, now at US$69,780 and up +4.7%. At one point it was above US$71,000. Volatility of the past 24 hours has been high at +/- 3.6%.

This soil moisture chart is animated here.

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