A review of things you need to know before you sign off on Thursday; markets hold their breath, early movers show fear, tax take eases, retail weak, 2degrees fined, commodity prices hold, swaps fall, 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
No changes to report today. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

TRUMP TARIFFS
Most news is overshadowed by Trump's tariff announcement. The implications for New Zealand are here. Financial markets had just closed when he announced the details. Wall Street reactions won't really be known until tomorrow, but investors will be reacting 24/7. When the reporting catches up with those reactions, it is unlikely to show a pretty story. We may have got off relatively lightly (10%) but most of our main trading partners are likely in for fearful chaos, in the short term at least. And that includes the US (where there will be winners - the favoured wealthy - and losers - most consumers).

HAS TRUMP MESSED WITH YOUR WALLET?
The earthquake from this American move will be felt worldwide, and spread to your KiwiSaver investments. Fund managers have been out saying, treat this event like just another piece of market volatility and 'hang in there'. However advice that this is just normal business cycle volatility looks incredibly self-serving. What happened today could have decade-long impacts. How much of your KiwiSaver has been allocated to FPH? for example. Like any earthquake, the secondary shocks can be just as damaging. The landscape may have changed.

GETTING LAMER
The February Crown accounts reveal how stunted the economy is right now. Tax collected from individuals is easing back rather quickly, now up only +3.0% from a year ago. That is the slowest rose in the tax take from the workforce since 2021. Also, growth from GST tax collections is falling as well. The deficit isn't shrinking either. (Actually there are two deficits, operating balance, and OBEGAL. Neither are shrinking, and with huge investment markdowns ahead, the operating balance is set to soar.)

NO PROGRESS
From the start of 2022, household net worth has been stuck, essentially unchanged. And the latest update as at December 2024 shows that still the case. Our holding of financial assets like in bank accounts, like KiwiSaver have been rising. But our housing equity has been falling, balancing out the gains. The largest fall has been in the value of land. That is focusing minds. In the December 2024 quarter, household saving improved by $429 million but is still negative -$1.4 bln, as net disposable income increased more than the increase to household spending. (The last time spending exceeded disposable incomes was in December 2021. The 'better' December 2024 data only makes it less-worse.)

SLOW CONSUMER SPENDING
The pattern of slow consumer spending seen in February showed little change in March despite the drop in interest rates in recent months, according to figures released today by Worldline NZ.

THE DOWN TREND CONTINUES
Data out today on meat processing activity reinforces the decline - slow but steady - in the number of lambs/sheep processed, down to 21.4 mln in the last year. The minimum monthly processing of less than 1 mln in offseason months is staying steady, but the Feb/March peaks are getting smaller and smaller. Capacity needs to exit this sector.

KEEPING IT SHORTER
March 2021 to January 2022 was 'peak fear' for bank customer depositors when they held 80% of their funds at terms call to 3 months. Then things eased to 69% as they shifted funds to longer terms. But that trend has ended and the risk-off tone is returning. In February, 72.6% of funds are now in these very short term accounts, a 22 month high.

COMMODITY PRICES STAY HIGH
Commodity prices mostly held up in March, retaining their February gains.

ADVERTISED CLAIM NOT TRUE
2degrees has been fined $325,000 by the Auckland District Court after admitting it made misleading claims that its Aussie business roaming was “free” or “at no extra cost” when in fact customers were charged for roaming after 90 days.

NZX UPDATE
As at 3pm, the overall NZX50 index is down -0.6% and the weekly change is now -0.7%. Year-to-date it is down -6.5%, and the change from this time last year is now +1.2%. There are 27 gainers today, led by Synlait Milk (+6.7%), Vital Healthcare (+1.8%), Oceania (+1.7%, and Kiwi Property (+0.9%). There are 55 decliners led by Kathmandu again (-5.3%), T&G Global (-4.6%), Freightways (-3.7%) and Air NZ (-2.8%). In fact any company involved in international trade. Market heavyweight F&P Healthcare is down a relativity modest -1.1%.

GEOGRAPHICALLY CHALLENGED
Trump tariffs were set at 10% for Australia too - except the American President made an example of that great trade bully - Norfolk Island (population 2100), where exports from there to the US will be punished by a 29% tariff. That will show them not to hit the US with "such unfair tariffs". They aren't the smallest hit; The uninhabited islands, Heard and McDonald, in the South Ocean near Antarctica are hit with 10% tariffs. How are the occupants, the penguins, going to respond? The reciprocal US rates will become effective at 12:01 a.m. on April 9, US time. That's in addition to a baseline 10% tariff which goes into effect at 12:01 a.m. on April 5, US time.

AUSSIE REGULATORS WORRIED ABOUT HOW ANZ IS MANAGED
In Australia, an APRA review of ANZ Bank's operations found “weaknesses in culture, leadership, and infrastructure could lead to material issues in the future”. They slapped another rise in their penalty capital requirement, taking it to +AU$1 bln.

CURRENTLY A HIGH LEVEL OF RESILIENCE
The RBA reviewed financial stability in Australia. It warns that geopolitical tensions, including possible disruptions to the global trading system, are casting a shadow over the international outlook. Many households continue to experience pressure on their cashflows. But overall, their financial institutions are well placed to deal with these stresses, they say.

SWAP RATES EASE LOWER
Wholesale swap rates are probably lower today following bond yields down. But it is the longer rates showing the biggest falls. 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 3.60% on Wednesday. The Australian 10 year bond yield is down -10 bps at 4.31% holding lower levels. The China 10 year bond rate is down -6 bps at 1.80%. The NZ Government 10 year bond rate is down -12 bps at 4.50% while today's RBNZ fix was at 4.43% and down -11 bps. The UST 10yr yield is now just on 4.07% and down -12 bps from this time yesterday. Their 2yr is down -8 bps at 3.82%, so that positive curve is now lower +26 bps.

EQUITIES REACT TO TARIFF DETAILS
The NZX50 is down -0.6% in late Thursday trade, after the tariff news. The ASX200 is down -1.1% in afternoon trade. Tokyo has opened down -3.3% in early Thursday trade. Hong Kong is down -1.3%, while Shanghai is unchanged at its open. Singapore has opened down -0.4%. On Wall Street, the S&P500 was up in today's Wednesday trade by +0.7% but that was before the tariff news. The futures market is volatile, and currently signals a -2.0% drop when it opens tomorrow.

VOLATILITY WATCH
A key metric we will be watching tomorrow is the VIX volatility index.

OIL DROPS
The oil price is -US$1.50 softer from this time yesterday and now just under US$70/bbl in the US, and just on US$73/bbl for the international Brent price.

CARBON PRICE DROPS HARD
The carbon price is down a sharp -$2.50/NZU today and now at NZ$54.50/NZU. It hasn't been this low since August 2024. The next official carbon auction is on Wednesday, June 18, with a $68 floor price. 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$21 from this time yesterday, now at US$3154/oz, testing its highs. It's been volatile.

NZD FIRMS
The Kiwi dollar is up +20 bps from this time yesterday at 57.4 USc. Against the Aussie we are up +40 bps at 91.3 AUc. Against the euro we are down -40 bps at 52.6 euro cents. This all means the TWI-5 is just under 67 and up +20 bps from yesterday at this time.

BITCOIN FALLS, VOLATILITY RISES
The bitcoin price is down a net -1.6% from this time yesterday, now at US$83,845. Volatility of the past 24 hours has been high at just on +/- 3.5%.

This soil moisture chart is animated here.

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