A review of things you need to know before you sign off on Friday; inflation proving stickier than expected; both retail and factories in severe downturns, OCR cut prospects fade, swaps up, NZD up, & 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
Nothing to report today.

TERM DEPOSIT/SAVINGS RATE CHANGES
Nothing here either. Update: SBS Bank raised its 4 month rate to 4.30%, its 5 month rate to 5%, and its nine month rate to 6.15%.

INFLATION UPDATES LOOK TOPPY
The March quarter CPI will be released next Wednesday. But today, StatsNZ released some important monthly updates about half of which will feed into that quarterly release. Food prices rose +0.7% in March from a year ago, the lowest rise since April 2021. International airfares fell -15% on the same basis. But rents were up +4.6% in this data series, and petrol was up +14.6% largely on tax changes. So despite the low food price rises, analysts are now expecting Q1-2024 CPI to rise by +4.0%, to 4.2%, which are down from the Q4-2023 rate of 4.7% but still far above where the RBNZ wants it to be (and even above the RBNZ's own MPS forecast for Q1 of 3.8%).

SEVERE DOWNTURN
March retail spending (using electronic cards) fell a worrying -0.7% which follows an even worse -2.0% downwardly revised drop in February. Analysts had expected a +0.8% rebound in March. These levels are terrible when you realise that inflation has been running at way north of 2% and population growth has been +3% on top of that.

RECORD HIGH
New dwelling completions in Auckland hit a record high in February and the sharpish downturn in building consents is yet to affect the supply of new homes in the Queen City

FACTORIES IN UNHAPPY PLACE
After improving steadily from October 2023 when it sunk to a rather severe contraction, unfortunately the factory PMI for March couldn't keep the improvement going, so it hasn't shifted out of the contraction zone now for a full year now - and it isn't showing any signs it will soon. Worse, it is weak new order levels that are driving the contraction trends. The steam went out of the normally robust Canterbury region. Wellington (Central) is in sad shape. The pullback was minor in Auckland but it still isn't expanding. The Otago region's current expansion remains the only bright spot - but it is the smallest.

NZX50 PROFILE UPDATES
Readers should note that our NZX50 profiles have been updated, with the latest reported changes for Channel Infrastructure (CHI, #37) and Scales Corp (SCL, #39). A list of all the profiles we cover is here.

A FAST FADE
This time last week, money markets were pricing in three OCR rate cuts in 2024. But sticky inflation in the US, and here, both have traders changing their tune, so that there are now only two cuts priced in for 2024. The October 9 review is where the first is now priced for, the November 27 review for the second. The conviction for these two is easing off too, and kind of quickly. The earlier May or July pricings have now completely vanished and seem a distant memory.

HEAT RECORDS BECOME NORMALISED
In Australia, their forecasters are saying that the upcoming winter there will be their warmest on record. And it may be dry to start that April-July period. El Niño continues to decline and is near its end. Global sea surface temperatures have been the warmest on record for each month between April 2023 and March 2024. Notably, the Atlantic Ocean is showing exceptional and prolonged warmth in sea surface temperatures. Goodbye sea ice. It will be hard to be in the winter sports industry.

SWAP RATES UP AGAIN
Wholesale swap rates are likely to be higher again today after the NZ indications that CPI will miss here too. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 5.64%. The Australian 10 year bond yield is up +5 bps at 4.33%. The China 10 year bond rate is down -2 bps at just over 2.29%. The NZ Government 10 year bond rate is up +6 bps from this time yesterday at 4.93% and the earlier RBNZ fix was at 4.84% and up +3 bps. The UST 10yr yield is up another +4 bps from this time yesterday to 4.57%. Their 2yr is down -1 bp at 4.94%, so the curve is now less inverted, now by -37 bps.

EQUITIES MIXED
In late trade today, the NZX50 is down -0.6% in late trade and heading for a weekly retreat of -1.2%. The ASX200 is down -0.4% in early afternoon trade and if that holds it will finish its week little-changed. Tokyo has started its Friday session up +0.5% and sniffing a weekly rise of +0.6%. The normally volatile Hong Kong has started today down -1.5%, but might finish up +1.1% if it stays like this. Shanghai has opened unchanged and heading for a -0.7% weekly fall. Singapore is down -0.2% today. The S&P500 rose +0.8% in its Thursday Wall Street session, and is unchanged through its first four days of trade this week.

OIL PRICES HOLD
Oil prices have fallen -50 USc to just over US$85.50/bbl in the US while the international Brent price is up +50 USc to just over US$90.50/bbl.

GOLD AT RECORD AGAIN
In early Asian trade, gold is up +US$51 from this time yesterday at US$2392/oz and yet another all-time high. At 3:06pm today it hit US$2395/oz. Silver is having a moment too, but isn't yet back to its 2020 highs.

NZD FIRMS
The Kiwi dollar has firmed +¼c to 60.1 USc in the settling down space after the US CPI release. Against the Aussie we are a touch firmer at 91.9 AUc. Against the euro we are now up at just on 56 euro cents. This all means the TWI-5 is now up to 69.5.

BITCOIN HOLDS
The bitcoin price has slipped today to US$70,356 and off a minor -0.4% from where we were this time yesterday. Volatility of the past 24 hours has been modest at just on +/- 1.2%.

This soil moisture chart is animated here.

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