Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report today.
TERM DEPOSIT RATE CHANGES
None here either.
EXPECT A HALF YEAR OF VIRUS BUFFETTING
The RBNZ held its Official Cash rate at 1.0% in the face of trade threats from China's virus emergency. It is assuming the impact will be 'short'. "Nevertheless, some sectors are being significantly affected." The RBNZ's own OCR projections are slightly firmer and its easing bias has now gone. The NZD rose about +½c immediately after the release, and more gains later.
Retail card spending dipped again in January with less spent on food and beverage (hospitality) and groceries and liquor (consumables), Stats NZ said today. When adjusted for seasonal effects, retail spending fell -0.1% in January 2020, after a -0.9% fall in December 2019. Year-on-year to January 2020 retail transactions were up +4.2%. The number of card transactions is up +3.1% in January from the same month a year ago and up +3.3% for the full prior 12 months.
NOT A RECORD
ASB reported its half-year profit to December signaling a fall of -5%, and their net interest margin dropped -10 basis points. This is a pull-back from a record high and they also booked a loss on sale of its funds administration business, Aegis. Meanwhile, parent CBA also reported a strong result that was less than its previous record.
ANOTHER BOND ISSUE LIKELY TO BE POPULAR
Westpac is making a local bond issue, seeking $200 mln "plus unlimited oversubscriptions", split evenly between a three year Floating Rate Note and a five year Fixed Rate Note. Previous bank bond issues have been heavily oversubscribed. Indicative margins over swap are likely to be under 70 bps for the 3 year Note, and about 83 bps for the five year Note. At today's levels that means rates of about 1.82% and 2.01% respectively.
KIWISAVER DATA BREACH
Update: Generate KiwiSaver has revealed a data security problem. It says there was unauthorised third party access to the fund manager’s online application system between 29 December 2019 and 27 January 2020, and that some of its members’ personal information has been accessed illegitimately. This does not affect members’ investments, which are held by Public Trust in a completely separate system. This affects approximately 26,000 of the 90,000 members that have joined Generate over the past seven years.
JOB ADS BOUNCE BACK
A big jump in Auckland job advertising has surprised some and starts 2020 off strongly. This was underpinned by full-time jobs and public sector jobs. Rises in the rest of the country were good too.
Giant Aussie insurer IAG (the dominant general insurer in New Zealand) has seen its profits halve, mainly because of "exceptionally harsh" risks in Australia. No doubt they will want to recover that so premiums could face upward pressure.
The China coronavirus COVID-19 data is now 45,200 confirmed infected, and 1115 deaths. That is +85% higher than a week ago for infections and +125% higher for deaths.
LOCAL SWAP RATES TURN UP
Wholesale swap rates changed direction today and moved up. They are up +11 to +14 bps or more across most tenors. The 90-day bank bill rate is down -1 bp to 1.22%. Australian swap rates are also up across the board but by about less than half the NZ move in early trade. The Aussie Govt 10yr is up +4 bps to 1.07%. The China Govt 10yr is now up +9 bps at 2.88%. The NZ Govt 10 yr yield is also up +9 bps at 1.36%. The UST 10yr yield is up +5 bps to 1.61%.
NZ DOLLAR UP
The Kiwi dollar is noticeably higher after the RBNZ MPS, up because they took the possibility of future rate cuts off the table. Against the greenback we are back up to 64.7 USc and since this time yesterday that is more than a +¾c rise. Against the Aussie we are back up to 96.1 AUc. Against the euro we up at 59.3 euro cents. That means the TWI-5 is up to 70.5 and where we were at briefly this time last week.
Bitcoin is rising after breaching US$10,000 again this morning, and is now at US$10,325 and up +5.7% in a day. The bitcoin price is charted in the currency set below.
This chart is animated here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».