A review of things you need to know before you go home on Friday; affordability gets worse faster, buyer sentiment crumbles, IMF gives its 2c worth, PMI slows, swaps down again, NZD holds, & 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.

UNAFFORDABILITY GETS FIERCER
We have updated our February median multiple data (house price to household income ratio). And it has revealed the largest ever one-month jump in this ratio in one month in Auckland, and taking it up more than 1.0x in just one month. That is, house prices in Auckland rose more in one month than the total yearly Auckland household income! The national rise was strong too, with a jump that has only been exceeded once, in the March 2017 house price frenzy. Back then, it jumped to 6.4 times income; in 2021 it has jumped to 8.2 times income and a new record high. Auckland was at 8.2 times income in early 2015 and now it is at 11 times income. (Actually, affordability is better measured around the capacity to pay the mortgage payment, the ability to save a deposit. We will have these updates out next week.)

BUYING SENTIMENT CRUMBLES AS AFFORDABILITY WORSENS
ASB has released its housing confidence survey for its January update. That showed a strong rise in the view that house prices will increase (to a record high level for this survey), and a corresponding fall in the "now is a good time to buy" score, falling into a strong negative region. ASB talked it's book however, concluding prices "will level off soon" and implying public policy makers should leave things alone.

'TAXES OR STAMP DUTIES ARE THE ANSWER TO THE CURRENT BUBBLE'
The IMF has just wrapped up a review of New Zealand's fiscal and monetary policy settings and a staff report has been issued. For housing they say: "Achieving long-term housing affordability depends critically on freeing up land supply, improving planning and zoning, and fostering infrastructure investments to enable fast-track housing developments." Among short-term recommendations, they suggest the Government targets residential property investors with a stamp duty, or a more comprehensive capital gains tax in response to the severe imbalances in our housing market.

EXPANDING SLOWER
The manufacturing sector saw a slower rate of expansion during February, according to the latest BNZ-BusinessNZ Performance of Manufacturing Index (PMI). Notably, new orders fell, but they were from an unusual high in January and remain elevated. Supply issues are affecting results.

BIGGER BETS
According to data released by the Department of Internal Affairs, gaming machine profits in the December quarter were $252 mln, the most ever recorded for a three month period in a data series that goes back 13 years.

WILL YOU TRUST THE ROBOTS?
We should note that robo-advice is starting to be rolled out by life insurers, under FMA guidance.

IT SECURITY GETS MORE FOCUS
According to IDC, IT spending on security will be up by more than +10% this year as threats rise. Last year, despite organisations cutting spending in many areas during 2020 due to the impact of COVID-19, security remained a consistent area of increased IT spending.

CALLING AN END
In Australia, APRA has followed ASIC in closing its investigation into Westpac and its AML flubs but will keep its AU$1 bln capital penalty in place.

GOLD HOLDS
Gold is trading in Australia, and soon in Asian markets. So far today it is at US$1724 and little-changed from this time yesterday. And that is also little different from both the New York and London closes earlier.

EQUITIES GENERALLY HIGHER AGAIN
The S&P500 was +1.0% higher at the end of its trading session earlier today with the NASDAQ up +2.5% in a strong rebound. Tokyo has opened up +0.7%, but Hong Kong has opened -0.4% lower, as has Shanghai. Meanwhile, the ASX200 is up +0.9% in early afternoon trade and the NZX50 Capital Index is up +1.2% today.

SWAP & BONDS RATES FALL FURTHER
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 again today, as they did yesterday. However the 90 day bank bill rate is unchanged at 0.32%. The Australian Govt ten year benchmark rate is holding today at 1.70%. The China Govt ten year bond is unchanged at 3.27%. The New Zealand Govt ten year is down -1 bp at 1.72% and now well above the level of the earlier RBNZ fixing at 1.69% (-8 bps). The US Govt ten year is +1 bp firmer from this time yesterday at 1.54%.

NZD FIRMS AGAIN
The Kiwi dollar is now at 72.3 USc and up again from this time yesterday. On the cross rates we have slipped to 92.7 AUc. Against the euro we have stayed at 60.3 euro cents. That all means our TWI-5 is slightly higher at just under 74.1.

BITCOIN STILL MOVING UP
The price of bitcoin is rising further today, now at US$56,990 and up +2.4% from this time yesterday. Volatility over the past 24 hours has still been wide at +/- 3.5%.

This soil moisture chart is animated here.

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