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
Westpac has cut -14 bps from its two year fixed rates, taking its 'special' to 6.75% and lower than all its main rivals.
TERM DEPOSIT/SAVINGS RATE CHANGES
The Police Credit Union raised its bonus saver rate by +50 bps today, taking the potential rate to 4.50%.
DAIRY PRICES FIRM ON LOWER OFFER VOLUMES
Dairy prices rose +2.75% at today's Global Dairy Trade auction event. That was the USD rise from the prior event. In NZD, those same prices rose +4.2%. Bank in USD, WMP was up +3.4%, SMP was up +1.4%, Butter was up +3.1%, AMF was up +2.3%, and Cheddar cheese was up +4.1%. In the background, NZX analysts have been watching concerns lingering over the US market with the outbreak of H5N1 bird flu affecting more cattle herds in the Southwest, and even infecting a person a few days ago. The disease has not been killing cows; however it has been impacting milk production in the infected areas and if it continues to spread there may be an impact on national US milk production, which has already been weak for the past few months. The longer it goes on, the more buyers will want to lock in supply.
FAST-GROWING WORKFORCE
Stats NZ released Q1-2024 working-aged population data today. This is a routine release, but this one revealed a large +12,200 revision for Q4, 2023. Since the start of 2023, our working aged population has been rising at +2,500 per week, every week. It is now at 4.3 mln people. Since these records started in 1987, we have never before had two consecutive quarters where the growth exceeded +3% pa like we has in the past six months.
NOT-SO FAST-GROWING EMPLOYED WORKFORCE
Filled jobs rose by +2.1% in February from a year ago. Although annual growth is still relatively solid, it is at its slowest since January 2023, reflecting that growth is tapering. And it is down from the peak rise of +3.6% in April last year. More significantly, it has now clearly fallen below the rate of growth in the working-age population.
BOTTOMING OUT?
Consumer credit assessing firm Centrix says the number of people behind on their payments has fallen back to 457,000 (down -23,000 month-on-month). Although this improvement was expected following the seasonal uptick of late payers in January, demand for credit was also up +3% compared to the same period last year, buoyed by higher volumes of applications for unsecured credit. However, when looking at the bigger year-on-year picture, arrears are +8.1% higher, tracking closely to 2018 levels after coming off historic lows. We continue to see arrears rise for mortgages, personal loans and Buy Now Pay Later products as debt and financial stress builds.
ANOTHER HUGE SYNDICATED BOND,WITH MATCHING HUGE DEMAND
The Treasury has today announced that $4.5 bln of the nominal 15 May 2035 New Zealand Government Bond has been issued via syndication. The bonds, which carry a coupon of 4.50%, were issued at a spread of 6 basis points over the 15 May 2034 nominal green bond, at a yield to maturity of 4.7775%. Total book size, at final price guidance, exceeded $17.0 bln.
HAMISH RUMBOLD LEAVING KIWIBANK
Kiwibank says Hamish Rumbold, its Chief Digital and Technology Officer, is leaving in June after five years at the bank. CEO Steve Jurkovich says Rumbold has played a pivotal role in progressing Kiwibank's technology and digital capability. Mike Hendriksen, the bank's Chief Legal Officer and acting Chief Risk Officer, has been confirmed as its Chief Risk Officer. A recruitment process will seek a new Chief Digital and Technology Officer and Chief Legal Officer.
STEPHEN GILMORE LEAVING NZSF
The NZ Super Fund confirmed today that Stephen Gilmore will leave them at the end of June to take up the role of Chief Investment Officer at CalPERS, the largest pension plan in the United States with US$494 bln under management.
HANGING IN THERE
American vehicle sales were expected to rise in March but they disappointed, coming in at an annualised pace of 15.5 mln. Still, this is about the same pace we have seen since April 2023 so it is holding its rise from the depressed period two years earlier than that.
CHINA SERVICE SECTOR EXPANSION CONFIRMED
In China, new order levels boosted its Caixin services PMI in March. The expansion isn't swift but it is better than a contraction. It was the 15th straight month of growth in services activity, with new business rising to the fastest pace in the year-to-date.
SWAP RATES FIRM
Wholesale swap rates are likely to be a little higher today on global influences. Our chart below records the final positions. The 90 day bank bill rate is unchanged at 5.63%. The Australian 10 year bond yield is up +8 bps at 4.14%. The China 10 year bond rate is lower, now just under 2.30%. The NZ Government 10 year bond rate is up +6 bps from this morning at 4.75% and the earlier RBNZ fix was at 4.69% and up +2 bps. The UST 10yr yield is up +4 bps from this time yesterday at 4.35%. Their 2yr is unchanged at 4.69%, so the curve is now inverted less, now by -34 bps.
EQUITIES ALL IN RETREAT
In late trade today, the NZX50 is down a sharpish -0.9% and the ASX200 is down -1.4% in early afternoon trade. Tokyo has opened its Wednesday session down a full -1.0%. Hong Kong is down -0.7% in opening trade. Shanghai has opened down -0.3%. All these markets have taken their cues from Wall Street which ended its Tuesday session down -0.7% on the S&P500.
OIL PRICES RISE
Oil prices are up +US$1 to US$84.50/bbl while the international Brent price is now at US$88.50/bbl. These levels are five month highs.
GOLD HITS ATH
In early Asian trade, gold is up +US$32 from this time yesterday to a new all-time high of US$2282/oz.
NZD GOES SOFTER
The Kiwi dollar has essentially held its lower level of yesterday vs the greenback, now at 59.6 USc. But against the Aussie we have slipped to 91.5 AUc. Against the euro we a little lower at 55.3 euro cents. This all means the TWI-5 is down -20 bps to 68.8.
BITCOIN SLIPS BACK FURTHER
The bitcoin price has retreated further, now at US$65,671 and down -5.4% since this time yesterday. Volatility of the past 24 hours has been high at +/- 3.8%.
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