A review of things you need to know before you go home on Wednesday; retail spending and confidence down, local authority rates up, LGFA yields rise, swaps lower, NZD stable, & more

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 today either.

FEBRUARY LOCKDOWNS TRIM RETAIL SPENDING
Retail spending as tracked by electronic card transactions, fell sharply across the board in February as new lockdowns bit. They were down -8.1% on a year-on-year basis, down -2.5% on a seasonally adjusted basis from January. Spending dropped for all sectors, but was particularly notice in services where -$96 mln (-5.9%) less in postal services, travel agencies, and medical services; and -$17 mln less (-0.8%) on consumable goods, such as supermarket, specialised food, and liquor sales. Overall, it wasn't that we made smaller purchases, just less of them.

RETAILER CONFIDENCE DIVES
Retail NZ reports that more than half of all retailers reported a drop in sales over the last month, rising to 70% for those with stores in Auckland. Spending numbers for March will have been impacted further by the latest lockdowns. In addition, 37% of retailers said they are not sure, or not confident, they will survive the next 12 months. In September 2020 that level of distress was only 22%. Retailer business confidence is sinking fast.

A CANARY?
The use of electricity has been falling in the past two weeks, a sure sign the economy is slowing. That lower demand is probably one factor why the wholesale electricity price has quickly reverted to a more normal range over the past week. The new watch will now be on how low it goes.

JOB ADS START TO DRY UP
Momentum in job advertising continued to peter out during February, according to the BNZ-Seek review. In fact, there was a slippage of - 2.3% from February 2020 with Auckland doing the worst. Again, the lockdowns are the reason.

WHAT RECESSION?
For all this real world distress, these effects are not showing up in overall Local Authority revenues from rates and regulatory income. In the quarter to December, local authorities managed to raise rates +4.6% above the same quarter in 2019, and for the full 2020 year they were up +3.4%. That was on top of the +7.6% rise the previous calendar year. And these increases come despite sharp declines in petrol tax declines.

ENTHUSIASTIC BIDDING, BUT ONLY FOR MUCH HIGHER YIELDS
The Local Government Funding Agency (LGFA) sought $100 mln today by tender in four tranches. It got offered $409 mln and of the 49 bids received, only 8 won any. However, the yields have risen across the board from those in play five weeks ago at the prior event, rising between +28 and +74 bps.

IAG FILLS NZ CEO ROLE WITH AN AUSSIE
Amanda Whiting has been appointed CEO IAG New Zealand. Originally from Western Australia, she has come up through the ranks in their Sydney operations, specialising in direct-to-consumer/direct-to-SME marketing. She will be based in Auckland.

AUSSIES CONFIDENCE HIGH
Hard on the heals that business confidence in Australia is now at an eleven year high, today comes the news that Australian consumer confidence is back at a ten year high.

NOT BACK TO SQUARE ONE YET
But there is still some way to go in Australia. New data out today shows that in Q4-20 compared to Q4-19 their number of jobs fell -2%, hours worked fell -3.2% and the number of people with secondary jobs rose +3.1%. Overall, they are down -284,200 jobs in the year.

WINDING DOWN
The Reserve Bank has advised that it is ending two temporary liquidity facilities. The final TAF and COMO tenders will be held on 16 March 2021. The Term Auction Facility (TAF) is one where banks have been able to borrow funds for 3, 6 and 12 months using eligible collateral. It has been drawn to $1.1 bln so far. The Corporate Open Market Operation (COMO) is one where banks have been able to borrow funds for 3 months using eligible collateral, including corporate securities and asset backed securities. The COMO has never been used.

GOLD TURNS SHARPLY UP, THEN DOWN
Gold is trading in Australia, and soon in Asian markets. So far today it is at US$1711 and up +US$28 from this time yesterday. However it is now -US$5/oz below where it ended in New York earlier, and -US$6/oz below the closing London fix.

EQUITIES GENERALLY HIGHER AGAIN
The S&P500 was +1.4% higher at the end of its trading session earlier today with the NASDAQ up +3.7% and the Dow unchanged. Tokyo has opened flat, and Hong Kong has opened up +0.3% and Shanghai has opened up +0.5% as the Home Team is deployed to screw the scrum. Meanwhile, the ASX200 is down -0.3% in early afternoon trade and the NZX50 Capital Index is up +0.6%.

SWAP & BONDS RATES FALL
We don't have today's closing swap rates yet. If there are movements today, we will note them here later when we get the data. But they likely to have declined today, as they did yesterday. However the 90 day bank bill rate is up +1 bp at 0.33%. The Australian Govt ten year benchmark rate is down -7 bps today at 1.73%. The China Govt ten year bond is unchanged at 3.27%. The New Zealand Govt ten year is down -10 bps at 1.82% and the same level as the earlier RBNZ fixing at 1.82% (-9 bps). The US Govt ten year has slipped -3 bps from this time yesterday at 1.54%.

NZD ADJUSTS
The Kiwi dollar is now at 71.5 USc and back up from this time yesterday. On the cross rates we have slipped to 93 AUc. Against the euro we have firmed to 60.2 euro cents. That all means our TWI-5 is slightly higher at just under 73.7.

BITCOIN STILL MOVING UP, GATES WARNS
The price of bitcoin is rising further today, now at US$54,186 and up a further +1.7% from this time yesterday. Volatility over the past 24 hours has been +/- 2.4%. "Bitcoin uses more electricity per transaction than any other method known to mankind, and so it’s not a great climate thing," says Bill Gates.

This soil moisture chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».