A review of things you need to know before you sign off on Wednesday; focus on test rates, PIEs get global attention, house build costs rise, S&P looking at local authority credit ratings, swaps stable again, NZD softish, & 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
SBS Bank and the Co-operative Bank have both lowered their fixed rate cards today. All rates are here.

TEST RATES MOVE DOWN
Banks are moving their test rates down. More here. And we have started a new table page tracking current home loan test rates as they are announced. Please help us keep this page accurate.

TERM DEPOSIT/SAVINGS RATE CHANGES
SBS Bank and the Co-operative Bank have both lowered their term deposit rates today, with changes effective tomorrow. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

A LEGAL TAX-DODGE FOR THE WELL-OFF
JP Morgan Asset Management has launched a Global Bond PIE for New Zealand investors. PIE investments insulate wealthy investors from income tax rates above 28%. They say more of these types of products will be released soon.

HIGHER COSTS TO BUILD
According to our analysis of building consent data, the build costs for stand alone houses are at a record high while construction costs of retirement village units and apartments have plummeted. The average construction cost of new homes is now just under $450,000 - excluding land.

NZX UPDATE
The NZX50 is recovering today, up +1.1% at 3pm from yesterday's close, but that still leaves it down -4.5% for the week. From a year ago it is up +6.3%. More details here. There are 64 gainers led by NZME, Omvestore, Vecgtor and Vulcan Steel. There are 26 declines led by Synlait, the Warehouse, F&P Healthcare, and Spark.

MERIDIAN TAKES A PROFIT HIT FOR THE TEAM
Gentailer Meridian Energy (MEL, #2) reported a net loss after tax (NLAT) of -$121 mln, for the six months ending December 31, 2024. This is down from a net profit of +$191 mln in last year's half-yearly results, a swing of more than $300 mln. Renewable energy generation hit by drought, with low winds along with gas shortages "made the operating environment for the first half of this financial year as tough as I can ever recall experiencing," the company said. “Meridian put this country’s security of supply first and, as NZ’s largest renewable electricity generator, our balance sheet tends to underwrite the mitigation of extended droughts," they added.

RESTRUCTURE
NZME reported its half year results today, booking a -$16 mln loss after writing down -$24 mln in brand value. They also announced they are effectively putting up OneRoof for sale.

DAIRY PRICES SLIP
The overnight dairy Pulse auction has seen milk powder prices fall. The big fall expected for WMP didn't happen but it was a retreat all the same. The small fall expected for SMP actually came in more pronounced than expected. Both shifts have ended the recent run up in these prices although they probably don't necessarily end the higher trending. Neither correction was enough to unstitch that at this event. But uncertainty is back all the same.

TRIPLE CROWN
The University of Auckland Business School is celebrating being in the top one percent in the business school world, receiving sought-after accreditation from three international organisations – the Association to Advance Collegiate Schools of Business (AACSB), the Association of MBAs (AMBA) and the European Quality Improvement System (EQUIS). They were the first in Australasia to attain this 'triple crown' in 2004, a recognition it has now maintained for two decades making it the longest-standing triple crown accredited school in the region.

PORTS OF AUCKLAND STEADIES THE SHIP
They reported underlying NPAT of $42.0 mln, an increase of $20.8 mln (+98%) compared to the prior year’s result, on revenue that increased to $195.4 mln, up 20% from $162.5 mln in the first half of FY24. They say they have made good progress on legacy H&S issues.

RETHINKING LOCAL GOVT CREDIT RATINGS
Ratings agency S&P says New Zealand's local government sector is heavily indebted due to councils' consistently increasing capital investments. "We believe the sector's revenue and expenditure balance and predictability of policy are weaker than previously. We have therefore lowered our institutional framework assessment to very predictable and well balanced from extremely predictable and supportive. We are considering the implications for our credit ratings on local councils and related entities."

CAPITAL OUTFLOW CONCERNS
Bloomberg is reporting that China is increasing scrutiny of outbound investments by domestic companies as well as their use of proceeds from Hong Kong share sales, people familiar with the matter said, after record capital outflows put pressure on the yuan.

SWAP RATES HOLD YET AGAIN
Wholesale swap rates are probably to be little-changed yet again, 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 3.75% on Tuesday. The Australian 10 year bond yield is down -6 bps at 4.39%. The China 10 year bond rate is up +1 bp at 1.77%. The NZ Government 10 year bond rate is down -3 bps at 4.62% while today's RBNZ fix was at 4.55% and down -7 bps. The UST 10yr yield is now just on 4.32% and down another -6 bps from yesterday. Their 2yr is down -5 bps at 4.11%, so that positive curve is at +21 bps.

EQUITIES VERY MIXED
The NZX50 is up +1.3% in late Wednesday trade. The ASX200 is down however and by -0.4% in afternoon trade. Tokyo is also down -1.1% in early Wednesday trade. Hong Kong is up +2.3%, and Shanghai is up +0.6% its open. Singapore has opened unchanged. Wall Street was down -0.5% on the S&P500 in Tuesday trade.

OIL DOWN
The oil price is down -US$2, now just on US$69/bbl in the US, and at US$73/bbl for the international Brent price.

CARBON PRICE STILL IN RANGE
The carbon price is still within its range, and today is down a marginal -10c at NZ$63/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 FALLS
In early Asian trade, gold is down -US$32 from this time yesterday, now at US$2917/oz.

NZD SOFTER AGAIN
The Kiwi dollar has fallen -10 bps from yesterday at this time, now at 57.2 USc. Against the Aussie we are also down -10 bps at 90.2 AUc. Against the euro we are down -30 bps at 54.4 euro cents. This all means the TWI-5 is just over 66.8 and down -20 bps from yesterday.

BITCOIN RETREATS FURTHER
The bitcoin price is down -3.6% from this time yesterday, now at US$88,706. Volatility of the past 24 hours has been high at just on +/- 3.5%.

This soil moisture chart is animated here.

Keep abreast of upcoming events by following our Economic Calendar here ».