A review of things you need to know before you sign off on Wednesday; rush to drop floating rates, REINZ sees more sales at lower prices, farmers act like top dogs, PPI high, swaps stable, NZD lower, & 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
Banks rushed our matching -50 bps floating rate cuts following the OCR decision. Details here. Westpac also cut some fixed rates. All rates are here. Update: ANZ has cut fixed rates, and their new 2 year is now 4.99%.

TERM DEPOSIT/SAVINGS RATE CHANGES
A number of banks also cut their savings account interest rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here. Update: ANZ has cut its TD rate card rather hard..

RBNZ / OCR RESULT
A full review of today's -50 bps OCR cut are here.

VOLUMES UP, PRICES DOWN
The REINZ reported that the number of sales transactions were up in January but house prices tumbled. In fact, Auckland's median price dropped -$51,000 in January, and the national median was down -$30,000 from December. The trend is consistent with the recent reports about asking prices. Vendors are increasingly motivated in a falling market.

DAIRY AUCTION RESULTS
The full dairy auction overnight saw overall prices slip -0.55% from the prior full event two weeks ago.

BOTH TRACKS PROGRESSING
Fonterra is pushing ahead with its multi-billion dollar consumer brands divestment. Today they said if it decides to list its consumer brands on the share market, the spun-off company will be called Mainland Group.

BACK ON TOP
The combination a higher farmgate prices, and lobbying that has the Government wrapped around their little finger has farmers feeling more optimistic than they have been for 10 years. A Federated Farmers survey shows 'a significant shift in the mood of rural New Zealand'.

SEEKING FAVOURS
Pressing their new-found influence, Federated Farmers is going after the Reserve Bank. They say the central bank is ‘punishing rural NZ’. They want Finance Minister Nicola Willis to force the Reserve Bank to loosen its capital requirement rules to make rural lending more affordable. (She will probably be compliant. After all, if she prevaricates, both ACT and NZ First will make that same pitch to farmers, and the National Party can ill-afford to lose rural seats. Good public policy will come second, and is unlikely be defended politically by National.)

WINNING OF COSTS TOO
And on the farm expenses front, things are looking rosy as well, with overall farm expenses actually down -0.1% in December from the same quarter a year ago. And low inflationary pressure is across the board  for sheep, beef, dairy and horticulture farmers.

TRACTOR SALES STAY VERY LOW
But despite all those wins, farmers haven't yet opened their wallets. In January only 154 new tractors were registered and well below the ten-year average for a January of 194.

NZX UPDATE
The NZX50 is up +0.3% in 3pm trade, up +1.4% over the past week, but unchanged over the past month. There are 40 gainers today, led by Fletcher Building (+4.1%), Chorus (+2.1%), Ryman (+1.6%), and Meridian (+1.4%). Going the other way, there are 43 decliners, led by EBOS (-4.6%), SkyCity (-2.0%), Intratil (-1.1%), and Vector (-1.0%).

FBU'S STRUGGLES GO ON & ON
Fletcher Building has reported another 'challenging' half-year, and -$134 mln loss. The company says 'macroeconomic pressures' are expected to persist and economic activity to remain subdued at 'below mid-cycle levels' for the remainder of the financial year

PPI UP +3.0%
Input prices for producers were rising at a +3.0% rate in December, down from almost +5.0% in September, but up from +1.9% a year ago. The productive sector is still facing inflationary pressures, and at some point they will flow through to consumers - either in higher prices, or unprofitable companies needing restructuring or liquidation. The capital goods price index is particularly interesting for Q4-2024. It is up only +1.6% from a year ago and down from +3.7% in December 2023. But the costs of residential housing as a sub-component of this , was up +14.0%, a faster rise than a year ago. But with market prices for housing now falling, this is clearly not sustainable.

VISA NZ FILES FIRST FINANCIAL STATEMENTS IN A DECADE
Visa (Worldwide) New Zealand Ltd, which provides marketing support and software development support services for global cards and payments behemoth Visa Group, has posted its first financial statements to the NZ Companies Office in 10 years. For the September 2024 year, they show revenue of almost $103 million, tax of $2.3m, profit of $9m, assets of $124m and liabilities of $89m. In the Sep 2014 year, revenue was $3.2m, tax $185,664, profit $288,267, assets $4m and liabilities $3.5m. NZ payments are processed in Singapore where the revenue is also booked.

SWAP RATES HOLD
Wholesale swap rates are likely to be unchanged, but keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged at 3.81%. The Australian 10 year bond yield is up +7 bps at 4.57%. The China 10 year bond rate is unchanged at 1.71%. The NZ Government 10 year bond rate is up +3 bps at 4.73% while today's RBNZ fix was at 4.73% and up +4 bps. The UST 10yr yield is now just on 4.50% and up +1 bp from yesterday. Their 2yr is also up +1 bps at 4.27%, so that positive curve is still at +24 bps.

EQUITIES MIXED AGAIN
The NZX50 is up +0.1% in late Wednesday trade. And the ASX200 is down -0.6% in afternoon trade. Tokyo is down -0.3% in early Wednesday trade. Hong Kong is down -0.4%, but Shanghai is up +0.5% its open. Singapore has opened up +0.4%. Wall Street was up +0.2% on the S&P500 in Tuesday trade.

OIL FIRMER
The oil price is up +US$1 from yesterday, now just on US$72/bbl in the US, and at over US$76/bbl for the international Brent price.

CARBON PRICE DIPS
The carbon price is still within its range, but today is down -50c at NZ$62.50/NZU. The next release of units at the official auction is on March 19, 2025. But that auction's floor price is $68/NZU, so it is heading for a failure. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD UP
In early Asian trade, gold is up +US$43 from this time yesterday, still at US$2938/oz.

NZD SOFT
The Kiwi dollar has fallen -20 bps from this time yesterday, now at 56.9 USc. Against the Aussie we are down -50 bps at 89.6 AUc. Against the euro we are down -10 bps at 54.5 euro cents. This all means the TWI-5 is just under 67 and down -20 bps.

BITCOIN LITTLE-CHANGED AGAIN
The bitcoin price is down -0.7% from this time yesterday, now at US$95,613. Volatility of the past 24 hours has still been modest at just on +/- 1.8%.

This soil moisture chart is animated here.

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