Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Westpac cut its three, four and five year 'special' fixed rates sharply, lowering them to near market-leading levels.
TERM DEPOSIT RATE CHANGES
Westpac also cut all its TD rates from 6 months to five years, all by -10 bps. These are now market lows for any bank.
A TEPID QUARTER
The December quarter of construction completed was soft. Total construction activity came in below market forecasts. Previous quarter results had been quite strong with Q3 up +11.6% year-on-year and the first two quarters were higher than that. But the year-on-year final quarter result sank to just +7.6%. The residential sector grew at about the average based on new residences. Alterations and renovation activity was weak. But the overall result was held back by the non-residential activity, big projects that can have lumpy completions. And projects continue to soften in Canterbury, dropping -11% pa, while Auckland and Wellington stood out, growing +18% and +16% pa respectively.
AML CONVICTION
Jiaxin Finance, assisted by its owner, Qiang Fu and his mother, Fuqin Che, have been convicted of offences under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act. Between April 2015 and May 2016, Jiaxin Finance and its brokers were responsible for remitting over $53 million into New Zealand for an international customer. The Auckland High Court has sentenced Jiaxin Finance to pay a fine of $2.55 mln, Mr Fu has been sentenced to pay a fine of $180,000, and Ms Che has been sentenced to pay a fine of $202,000.
US$200 BLN TO EVAPORATE
Growth across Asia-Pacific will slow to 4.0% in 2020, the lowest since the Global Financial Crisis, due to the coronavirus outbreak. A U-shaped recovery should start later in 2020 but by then overall economic damage is likely to reach US$211 bln. That's according to an article S&P Global Ratings published titled "COVID-19 Now Threatens More Damage To Asia-Pacific."
A 15 YEAR LOW
Australian retail sales were weak in January, weaker than expected, dropping to a gain of just +2.1%, the slowest January year-on-year gain since 2005. This slowdown is concentrated in January which actually shrank, all due to bush fire and drought effects. None of this January decline is due yet to coronavirus.
CORONAVIRUS UPDATE
The latest compilation of Covid-19 data is here. The tally of those infected worldwide will probably exceed 100,000 over the weekend after rising by +2781 in one day. There are now 17,621 cases outside China, a rise of +2764 in one day as the numbers keep on jumping in South Korea, Italy and Iran. 13,459 are in those three countries (76%). A week ago that outside-China number was 4262 so it is still quadrupling in a week.
RED INK EVERYWHERE
Earlier today, Wall Street closed down sharply with the S&P500 down -4.4%. In local sessions, the NZX50 is down -1.5% and the ASX200 is down -1.6%. Tokyo has opened down -2.4%, Hong Kong down -1.5% and Shanghai is down -0.7% so far.
LOCAL SWAP RATES FLATTEN AS LONG RATES TUMBLE
Wholesale swap rates have changed little today although it did flatten with the ten year down to 1.06% a fall of -7 bps. The 90-day bank bill rate is up +1 bp to 0.83% as markets scale back their local rate-cut bets. In Australia, their swap curve flattened too. The Aussie Govt 10yr is down -1 bp at 0.70%. The China Govt 10yr is also lower, down -3 bps to 2.72%. The NZ Govt 10 yr yield is now just under 1.00%, and an -8 bps fall. Update: At the close, it rose to just over 1.00%. And the UST 10yr yield just keeps on sinking, now down to an eye-watering 0.86%, a -17 bps daily dump.
NZ DOLLAR FIRMS
The Kiwi dollar is firmer than this time yesterday, now at 63.1 USc. Against the Aussie we are also up at 95.6 AUc. Against the euro we have stayed similar at 56.2 euro cents. That means the TWI-5 is up marginally at 68.2.
BITCOIN UP, THEN SLIPS BACK
Bitcoin is also higher today at US$9,026, up almost +2% although most of that came last night and it has been slipping through most of today. 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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