Here are the key things you need to know before you leave work today.
TERM DEPOSIT RATE CHANGES
No changes to report today.
WEAK BEFORE COVID-19
New Zealand's manufacturing sector experienced a second consecutive month in contraction, according to the latest BNZ - BusinessNZ Performance of Manufacturing Index although the decline was small. But as BNZ noted: " ... in the context of the latest global ructions – this time related to the COVID-19 virus – January’s PMI could arguably be read as a relatively decent outcome. At the same time, it is surely too early for the PMI to capture the economic consequences of the virus. What we do know is that only two respondents to January’s survey specifically mentioned the “coronavirus” as a negative influence on their business."
FOOD PRICES TURN UP QUICKLY
Higher prices for meat, poultry, and fish contributed to a +3.5% increase in food prices for the year ended January 2020, the largest annual rise in food prices in over eight years, Stats NZ said today. That is a rise from +2.4% on the same basis in December.
RENTS UP FAST IN THE PROVINCES
StatsNZ says rents rose +3.9% nationally in the year to January for properties that turned over in the month (flow). They rose +3.3% pa on a stock basis. In Auckland, those rental gains evaporated to just +0.3% pa. In Wellington they fell to +1.9% pa, and in Christchurch they rose +2.8% pa. But in provincial centers the increases are a lot higher. For the rest of the North Island, StatsNZ says the rises are running at +6.0% pa and in the rest of the South Island at +5.5% pa.
Westpac raised $475 mln in its two Note offers after seeking at least $200 mln. The three year Floating Note raised $200 mln and will pay a yield of 0.7% plus the three year reference rate (if it was today it would have been 1.87%). The five year Fixed Rate Note raised $275 mln paying 2.08%.
SMEs IN GOOD SHAPE
Xero SME Insights reveals strong cashflows and short payment arrears in December 2019 but they weren't as low as for December 2018.
The private contractor building the Wellington Transmission Gully project has wrung an extra $191 mln from the Government to keep working on it.
The COVID-19 numbers are still rising, up to 64,400 and a +4000 rise from yesterday. The death toll is up to 1491 from 1368 this time yesterday. This time a week ago, the Chinese were reporting 31,400 and 638 deaths.
EQUITY MARKET UPDATES
Wall Street closed -0.2% lower earlier, in line with most European markets (except London which was down -1.1%). Today. Shanghai has opened up +0.2%, and Hong Kong has opened up +0.4%. Tokyo has been open an hour longer, but is down -0.5%. Locally the ASX200 is up +0.3% and the NZX50 is down -0.2%.
LOCAL SWAP RATES DOWN
Wholesale swap rates are lower today, down -3 to -4 bps across the curve. The 90-day bank bill rate is down -1 bp at 1.21%. Australian swap rates are little-changed today. The Aussie Govt 10yr is down +1 bp to 1.08%. The China Govt 10yr is now up +2 bps at 2.88%. The NZ Govt 10 yr yield is down -5 bps at 1.37%. The UST 10yr yield is unchanged 1.61%.
NZ DOLLAR SOFT
The Kiwi dollar is just a little softer against the greenback at 64.4 USc. Against the Aussie we are also softer at 95.7 AUc. Against the euro we up at 59.4 euro cents. That means the TWI-5 is soft at 70.2.
BITCOIN SAYS UP
Bitcoin is little-changed since this time yesterday at US$10,214. 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 ».