Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
None today.
TERM DEPOSIT RATE CHANGES
Kiwibank ended its TD 'specials', reducing their 200 day rate by -10 bps to 2.65% and their one year 2.70% rate to 2.60%
DAIRY PRICES HOLD
Dairy prices slipped a marginal -1.2% today at the GDT auction although they rose +0.5% in NZD terms. It was a creditable result in the current risk-off economic environment and may be an early indicator demand from China is starting to resume.
GOING UP NATIONALLY
Average dwelling values are rising throughout the country according to Quotable Value. They were up +5.3% nationally in the year to January, the highest year-on-year rise in twenty months.
GOING UP IN AUCKLAND
Major Auckland realtor Barfoot & Thompson's sales numbers rocketed up in February (the most for a February since 2015) and overall stock numbers remain low, but prices were a tad weaker. However, median prices were up just +2.4% year-on-year. Barfoots has 1000 fewer listings at the end of February 2020 than February 2019.
STILL RISING
The number of building consents issued nationally in January were +2.7% higher than the same month a year ago and that makes it nine consecutive months where a year-on-year rise has been recorded. In fact, they have been up in 14 of the prior 16 months. Consent issuance went off the boil in Auckland however. The growth in residential consents is moving steadily towards townhouses and apartments, although the majority is still houses.
DOWNHILL FROM HERE
ANZ reports: "The ANZ World Commodity Price Index fell just -2.1% in February but there is more downside to come. The impact on export prices of the recent coronavirus outbreak in China is only partially captured in this month’s data. We expect further downwards pressure on commodity prices in March. In local currency terms the index lifted +0.9% in February as the lower NZD helped offset weakness in commodity prices."
PETROL PRICES EASE FURTHER
Petrol prices continue to ease lower, both nationwide and in Auckland, continuing a trend that started at the end of December. This is despite currency-driven rises in crude oil prices. The oil company component of the pump price (refining , distribution, marketing) is now running lower than its long run average of 49c/L, now at 44.1c/L. Meanwhile, taxes are taking NZ$1.13/L in Auckland and just on $1.00/L in the rest of the country. The Government continues to use its bully pulpit to redirect high-price angst away from their tax levels.
FINAL FLING?
The Australian economy grew faster in Q4 than most analysts were expecting. It grew +2.2% pa and above the 2.0% rate expected and well above the Q3 rate of +1.8% pa. Of course, all this was before both the bushfires and coronavirus. It won't be repeated for a long time.
EQUITY UPDATE
Wall Street took today's US Fed rate cut as a signal the authorities have no idea how to deal with the Covid-19 supply shock. The S&P500 end the session down -2.8% and that was after a healthy +1.2% rise before the Fed announcement - so the post-Fed fall was a sobering -4.0%. Today, the NZX50 Capital Index fell sharply at the open today but has clawed its way back to 'even' in late trade. The ASX200 is down -1.5% and falling, ignoring the good GDP result. Shanghai is flat at the open, Hong Kong is down -0.3%, Tokyo is up +0.3%.
CORONAVIRUS UPDATE
The latest compilation of Covid-19 data is here. There are now 12,856 cases outside China, a rise of +2095 in one day as the numbers jump in South Korea, Italy and Iran. 10166 are in those three countries (80%). A week ago that outside-China number was 2930 so it is still quadrupling in a week. An odd and unique feature of Covid-19 is that very few children succumb.
FIERCE FALL
China's slowdown is less about how their factories have been affected than how their giant service economy has retrenched. More evidence came today from the private sector Caixin services PMI which dived to a fierce contraction of 26.5 which is from the February level of an expanding 51.8. This is even more fierce as the official Government services PMI which fell to 28.9. The difference hardly matters, it is almost a complete stop - apart from the FIRE sub-sector. That is the only bit still working, it seems.
LOCAL SWAP RATES RESUME SHARP FALLS
Wholesale swap rates fallen heavily again today. At present, the two year is down -9 bps to just 0.65%. The five year rate is down -7 bps to 0.75%, and the ten year is also down -7 bps to 1.04%. All these rates fell sharply yesterday too after the cutoff of our article. The 90-day bank bill rate is down -11 bps to 0.77% as markets gets convinced the RBNZ will join the rate-cutting party. In Australia, their swap rates down another -5 bps across the curve after their RBA rate cut. The Aussie Govt 10yr is down -10 bps at 0.71%. The China Govt 10yr is also lower, down -5 bps to 2.78%. The NZ Govt 10 yr yield is lower too, back down -4 bps at 1.03%. And the UST 10yr yield is down a stunning -20 bps today, now at only 0.95%, the first time in history a global benchmark has been below 1%.
NZ DOLLAR LITTLE-CHANGED
The Kiwi dollar a little firmer than at this time yesterday, now at 62.9 USc. Against the Aussie we are noticeably weaker at 95.1 AUc. Against the euro we have stayed lower at 56.3 euro cents. That means the TWI-5 is little-changed but low at 68.1.
BITCOIN UP
Bitcoin is still yo-yoing, up +3.5% today at US$8,821. 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 ».
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