A review of things you need to know before you sign off on Wednesday; a sub 5% home loan rate surprises, the rising jobless rate doesn't surprise, car sales soft, retail also soft, emissions dip, commodity prices jump, swaps ease, NZD firms, & more

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).

MORTGAGE RATE CHANGES
Kiwibank made some changes today. Details here. And they were followed by a rather spectacular rate cut by Westpac. Those details are here. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Westpac made some small but broad cuts to popular TD rates today. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

JOBLESS JUMP
The unemployment rate rose to 5.1% as at December 2024 as 32,000 workers droped out of the labour force. And that is now a four year high.

CAR SALES SOFT FOR A JANUARY
There were a touch over 8050 new cars sold in January, similar ro January 2023, but -1000 less than the average over the prior five years. There were 7340 used import cars sold, and that was far lower than the 9000 average for a January. Interestingly, of the new cars sold, 560 were EVs and 3250 were hybrids, a noticeably lower share than usual. There were 170 used EVs imported & sold, plus 3274 used hybrids and these levels were eighteen month lows as the share of NEVs for used imports.

VERY CONSTRAINED
Worldline/Paymark is noting that consumer spending through their payments network in January was only up +0.4% from the same month a year ago, a gain far less than can be accounted for by inflation. Consumer spending growth lifted in smaller regions on the summer travel impulse, but the larger regions continued to lag, especially over the two Anniversary long weekends.

FARMING LEADS THE WAY ON EMISSIONS REDUCTIONS - AGAIN
Stats NZ updated its greenhouse gas emissions data to September 2024, noting that emissions are falling. They made the point that decreasing economic growth is probably behind the reductions. Households didn't reduce their emissions on a year-on-year basis (although they didn't increase them either. But as usual it was industry that did the heavy lifting for emissions reduction. Agriculture reduced their emission -2.1% on that year-on-year basis, manufacturing was down -7.2% and services were down -4.9%. These trends are similar to earlier trends. In the 2024 year, households increased their emissions by a small +2 kilotonnes of carbon dioxide equivalents, whereas the largest reductions were from agriculture, down -924 kilotonnes.

THE GAINS GROW
The ANZ World Commodity Price Index rose +1.8% in January from December and taking the year-on-year gain to almost +15%. In NZD terms that gain at a remarkable +25%. All sectors except forestry managed to lift during the month, but the largest gains were made by meat and wool. The easing NZD bolsters these gains.

HIGHER PRICES
The overnight dairy auction brought a healthy +3.7% rise in prices overall, uop +4.0% in NZD terms. Pre-Ramadan buying was a feature, but lower volumes offered and background lower production in the US and Australia also helped lift prices.

BOND RUSH
Investors absolutely rushed today's $500 mln NZ Govt bond tender. 128 bids were received totaling $2.35 bln. We make that the most bid in one of these tender events since the early days of the pandemic in 2020. Only 26 bids were accepted across all three maturities. So a handful of big bidders took away most of it (by bidding low yields).

NZX50 WEAK, DRAGGED DOWN BY FPH
Here are the key changes to know about in the New Zealand equity market. As at 3pm, the NZX50 is down -0.5%, led by pullbacks from F&P Healthcare's -3.8%, Ryman's -1.4% and Auckland Airport's -1.1%. They are among the 43 decliners. Going the other way are rises by 41 listed companies, led by Tower's +5.4%, Synlait's +3.6% and Genesis's +2.8%.

GLOBAL SERVICES STILL EXPANDING BUT SLOWER
The Caixin China General Services PMI unexpectedly declined in January from December’s seven-month high, and below market expectations. This is the softest expansion in their services sector since September as new business growth eased to a four-month low, employment fell the most since April 2024, and selling price inflation slowed. Meanwhile, the services PMI in Australia posted a marginal gain for a minor expansion in January. In Japan, their services expansion was much better, but they are noticing much higher prices.

SWAP RATES SOFT
Wholesale swap rates are probably lower today so keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged on Tuesday at 3.89%. The Australian 10 year bond yield is down -3 bps at 4.44%. The China 10 year bond rate has dipped -1 bps to 1.63% after their CNY holiday, a tiny net move. The NZ Government 10 year bond rate is down -3 bps at 4.59% while today's RBNZ fix was 4.57% and up +1 bp. The UST 10yr yield is now just on 4.52% and down -4 bps from this time yesterday. Their 2yr is now at 4.22%, so that positive curve is little-changed at +30 bps.

EQUITIES MIXED
The NZX50 is down -0.5% in late Wednesday trade. F&P Healthcare has led the drop. (See above.) The ASX200 is up +0.6% in afternoon trade. Tokyo is little-changed, up +0.1% in early Wednesday trade. Hong Kong is down -1.5%, but Shanghai returned with a net -0.6% easing. Singapore has opened little-changed. Wall Street ended today's trade higher with the S&P500 up +0.7%.

OIL ON HOLD
The oil price is little-changed from this time yesterday now just over US$72.50/bbl in the US, and up +50 USc 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 RISES TO ANOTHER ALL-TIME HIGH
In early Asian trade, gold is up +US$27 from this time yesterday, now at US$2847/oz and a new record high.

NZD RISES WITH OTHERS
The Kiwi dollar has risen +30 bps from this time yesterday, now at 55.5 USc on a rising USD. Against the Aussie we are little-changed at 90.5 AUc. But against the euro we are also little-changed at 54.4 euro cents. This all means the TWI-5 is now just under 66.6 and up almost +20 bps from where we were yesterday.

BITCOIN FALLS BACK
The bitcoin price has fallen -3.4% today from this time yesterday, now at US$97,839. Volatility of the past 24 hours has been moderate at just over +/- 2.8%.

WAITANGI DAY
Please note that Thursday, February 6, 2025 is a full public holiday in New Zealand, Waitangi Day. This report will not be published tomorrow, but we will have many news and article releases.

This soil moisture chart is animated here.

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