Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Update: Heretaunga Building Society trimmed its one and two year fixed rates by -15 bps.
TERM DEPOSIT RATE CHANGES
BNZ today launched a 2.88% one year TD 'special'.
CHEAPER WHOLESALE FUNDING
And BNZ is also seeking more wholesale funding. It is making an offer of up to NZ$100 mln of a new series of unsecured unsubordinated fixed rate 5 year notes to New Zealand retail investors and to certain institutional investors. It suggests if could accept unlimited oversubscriptions at its discretion. The offer has an indicative margin of 0.80%–0.85% pa. so at today's 5 year swap rate, that suggests the cost to BNZ for this funding will be about 2.15%.
New Zealand’s services sector ended 2019 at a low point. The PSI for December was 51.9, which was -1 point down from November. The December result was also the lowest level of expansion since September 2012, and well below the long term average of 54.4 for the survey. Earlier surveys show the factory PMI was in contraction in December. Both surveys confirm others like the QSBO, retail sales, that businesses aren't starting 2020 in a totally positive frame of mind.
ANZ CONTINUES EFFORTS TO SELL UDC
ANZ's efforts to sell UDC Finance continue, according to Aussie media reports. Private equity groups are touted as potential buyers in a sales process being run by investment bank Morgan Stanley. UDC posted record annual net profit after tax of $69.7 mln in December. UDC has stopped taking deposits from the public and on January 15 the RBNZ cancelled its non-bank deposit taker licence at UDC's behest.
WALKER MOVES ON
Auckland Council's CFO Matthew Walker has resigned to take up a senior administrative role with the NZTA.
WEAK RETAIL INTENTIONS, STRONG HOUSING INTENTIONS
In Australia, the latest CBA Household Spending Intentions report shows that December levels fell with households remaining very cautious about spending at the retail level. However, the same report found house buying intentions at near a record high, and the 'hope' is that a rising wealth effect will seep into general demand. But the surveyers seemed unsure this would actually happen.
EQUITY MARKET UPDATES
Asian equity markets have all opened lower today, with Shanghai opening down -0.6%, Tokyo down -0.80%, and Hong Kong opening -1.6% lower. The Moody's rating downgrade, and tone-deaf messages that Hong Kongers need 're-education' to support Beijing from the new Beijing man in Hong Kong aren't helping. Locally, the ASX200 is down -0.4% while the NZX50 Capital Index is up +0.2% so far today.
LOCAL SWAP RATES UP
Wholesale swap rates have moved higher today. The one year is up only +1 bp, but the two year is up +3 bps, the five year is up +4 bps and the ten year is up +3 bps. The 90-day bank bill rate is unchanged at 1.29%. Australian swap rates are down about -2 bps across the curve. The Aussie Govt 10yr is down -1 bp at 1.17%. The China Govt 10yr is down an unusual -5 bps today at 3.08%. The NZ Govt 10 yr yield is up +2 bps at 1.56%. The UST 10yr yield has fallen sharply in the past hour or so, down more than -3 bps and now under at 1.80%, consistent with the Asian equity market openings. At the same time, gold is up +US$5 in early trade.
NZ DOLLAR STABLE
The Kiwi dollar is little-changed from this morning at 66 USc. Against the Aussie we are unchanged at 96.2 AUc. Against the euro we are at 59.5 euro cents. That means the TWI-5 is now at 71.3.
Bitcoin is holding at US$8,640. The bitcoin price is charted in the currency set below.
This chart is animated here.
And here are the 2015 and 2017 maps for easy reference:
The easiest place to stay up with event risk today is by following our Economic Calendar here ».