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.
WARNING
An ANZ report describes recent house price inflation as alarming, but warns that higher interest rates and tighter credit are on the way
INTO REVERSE AGAIN
Our economy went into reverse again in the last quarter of 2020 with a fall that was bigger than expected by the Reserve Bank and by bank economists. If it also happens in Q1-2021, a second recession looms.
STRONG BIDDING, LOWER YIELDS
There was another Treasury bond tender today and this one continued the recent trend of lower yields and bidders offered higher prices for these benchmark risk-free bonds. A slimmed down $450 mln was tendered in three maturities, and overall more than $1.3 bln was offered, leaving $865 mln unsatisfied. The April 2025 offer went with a yield of 0.79% pa and down from the 0.87% pa two weeks ago for this maturity. The April 2029 bond went for 1.50% pa and down from 1.58% two weeks ago. The April 2033 bond went for 1.95% and down from the prior 2.02% pa.
PROGRESS, BUT ONLY BACK TO LAST YEAR'S LEVEL
In Australia, they have announced their jobless rate has dipped from 6.4% in January to 5.8% in February, an improvement far greater than expected. A year ago it was at 5.1%. Total employment rose to 13 mln, a gain of +88,700 but only back to where it was a year ago. Underemployment rose to 8.5% and their participation rate slipped slightly. (The New Zealand jobless rate was last reported for December at 4.9%.)
PROGRESS
The RBNZ has released Tower Insurance from half its minimum excess solvency margin from $50 mln to $25 mln. The reduction recognises Tower’s decreasing risk related to the Canterbury earthquakes. The balance of their excess solvency margin will remain for at least one more year.
GOLD RISES
Gold is trading in Australia, and soon in Asian markets. So far today it is at US$1751 and up +US$21 from where it closed yesterday. That is only marginally above where it closed in New York. But it is a +1.2% gain from the closing London fix.
EQUITIES MIXED
Wall Street liked the US Fed's policy non-moves and after the release it gained and the S&P500 ended up +0.3% after being down more than -0.6% earlier, so a +1% reaction. However the NZX50 Capital Index is down -0.4% in late trade and the ASX200 is down -0.3% in early afternoon trade. Tokyo has opened up a very strong +1.7%. But Hong Kong and Shanghai have opened timidly, essentially flat.
SWAP & BONDS RATES RISE
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. The 90 day bank bill rate is up +1 bp at 0.34%. But by that small rise, it is now at its highest since April 2020, eleven months ago. Benchmark rates are dead-in-the-water, waiting for a wind change from the US Fed which is forecast to come in tomorrow morning. The Australian Govt ten year benchmark rate is up +5 bps at 1.78%. The China Govt ten year bond is holding at 3.28%. The New Zealand Govt ten year is up +2 bps at 1.76% and now at the same level of the earlier RBNZ fixing at 1.79% (+6 bp). Although it got as high as 1.69% just before the US Fed announcement, the US Govt ten year is currently up +2 bps from this time yesterday at 1.64%.
NZD UP
The Kiwi dollar is now at 72.5 USc and a +½c gain following the US Fed announcement earlier today. On the cross rates we are down to 92.6 AUc. Against the euro we up marginally at 60.5 euro cents. That all means our TWI-5 is now up at 74.3.
BITCOIN BOUNCES HIGHER
Bitcoin has risen to US$59,061 which is a gain of +US$2,700 in one day, or +4.8%. Volatility over the past 24 hours has been a very high +/- 4.9%.
This soil moisture 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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