Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop). It is a tricky job preparing this summary today because many things are up in the air.
MORTGAGE RATE CHANGES
ASB cut fixed rates today, but their reductions were quite minor. More here. Other institutions to cut fixed rates today include ICBC, the Police Credit Union, Unity Money, First Credit Union, and the Heretaunga Building Society. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Both Kiwibank and ASB cut TD rates today. So did Westpac. The details about those changes are here. Also cutting were, China Construction Bank, the Police Credit Union, Unity Money, and First Credit Union. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
INFLATION LINGERS
Stats NZ says high interest payments on mortgages continue to contribute 'significantly' to living costs. They report that the cost of living is rising at a +3% rate for average Kiwi households.
LISTINGS SURGE BIGLY, A VERY STRONG BUYERS MARKET SETS IN
Realestate.co.nz data at the end of January shows the mother of all buyer's markets looks increasingly likely as stock levels surge. Total stock of homes for sale hits 9-year high for the time of year, putting buyers in an even stronger position for 2025.
'US RATE CUT PROSPECTS DIE'
Capital Economics says the resulting surge in US inflation from the announced tariffs is going to 'come faster and be larger than we initially expected'. 'Any chance of more US Fed rate cuts this year just died', they say. And, amidst Trump's tariff trade war, don't forget the online economy.
NZX50 HAS A DOWN DAY ON HEAVYWEIGHT DECLINES
Here are the key changes to know about in the New Zealand equity market. As at 3pm, the NZX50 is down a sharp -1.8% with F&P Healthcare dropping -7.0%, along with Fletcher, a2 Milk, and Skellerup. Going the other way were a few including Stride Property, Gentrack, Tourism Holdings, and Manawa Energy who lead the few gains
A BIT BETTER THAN FIRST THOUGHT
The S&P Global Australia Manufacturing PMI was revised higher to 50.2 in January from a flash of 49.8, and compared to 47.8 in December. It's their first expansion in the manufacturing sector in a year, as output returned to growth. New orders fell at a softer rate and employment levels increased, supporting the clearance of backlogged work.
AUSSIE RETAIL SLIPPAGE
Retail sales in Australia fell by -0.1% in December from November, the first such retreat in nine months, though the drop was milder than the forecasted -0.7% contraction. The result points to weakening consumer spending, fueling expectations that the RBA may start cutting interest rates at their February 18 meeting. Year-on-year, retail sales only rose 3.0%, barely more than inflation's 2.5%.
CONSTRUCTION BOSSES WANT MORE TAXPAYER SUPPORT
In Australia, building consent levels were essentially unchanged in December from November to be more than +12% higher than in the same month in 2023. For all of 2024, they were +4.7% higher than in 2023. Despite those gains, the powerful construction lobby is calling for a "$12 billion injection into infrastructure" to have the taxpayer subsidise its activities.
NEW ORDER RISE GIVES A SNIFF OF RECOVERY
Although the internationally-benchmarked China Caixin factory PMI slipped to a no-expansion/no-contraction state in January, the underlying data did feature a rise in new orders. Prices eased and at their fastest pace since July 2023. Looking ahead will be difficult now given the unknowable impacts of the impending tariff war.
SWAP RATES UNDER PRESSURE
Wholesale swap rates are probably noticeable lower today on global forces so keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -1 bps on Friday at 3.93%. The Australian 10 year bond yield is down -4 bps at 4.41%. The China 10 year bond rate has held at 1.64% while they are CNY holiday. The NZ Government 10 year bond rate is up +3 bps at 4.64% while today's RBNZ fix was 4.60% and up +5 bps. The UST 10yr yield is now just on 4.52% and down -2 bps from this morning's open. Their 2yr is now at 4.25%, so that positive curve is flatter at +27 bps.
EQUITIES CRASH LOWER
The NZX50 is down -1.8% in its Monday trade on the US trade war. F&P Healthcare (who manufacture in Mexico or the US market) is down -7.0%.) The ASX200 is down -1.6% at its open, and crashing from its all-time high. Tokyo is up down -2.0% in early Monday trade. Hong Kong is down -1.8%, but Shanghai remains closed and avoiding today's carnage. Singapore has opened down -0.7%. Wall Street will be nervous ahead of its Monday opening tomorrow. The S&P500 futures are suggesting a -1.2% drop.
OIL UP IN USA, ON HOLD ELSEWHERE
The oil price is up +US$1 from this morning now just over US$73.50/bbl in the US, but unchanged at US$76/bbl for the international Brent price.
CARBON PRICE STAYS IN RANGE
The carbon price is still within its tight range, today still at NZ$63/NZU. The next release of units at the official auction is on March 19, 2025. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DIPS FROM RECORD HIGH
In early Asian trade, gold is down -US$18 from this morning, now at US$2781/oz.
NZD REACTS LIKE EVERYONE ELSE TO THE USD
The Kiwi dollar has fallen -90 bps from this morning's open, now at 55.5 USc on a surging USD. Against the Aussie we are little-changed at 90.6 AUc. But against the euro we are unchanged at 54.2 euro cents. This all means the TWI-5 is now just on 66.5 and down -50 bps from where we opened today.
BITCOIN DUMPED
The bitcoin price has fallen -5.2% today from where we opened this morning, now at US$93,050 and down more than -US$10,000 from this time Friday. Volatility of the past 24 hours has been very high at just over +/- 4.4%.
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