A review of things you need to know before you go home on Thursday; Kiwi Bond rate cut, 2Degrees to float, Kiwibank to close branches in small towns, bond yields dip, swaps stable, NZD lower, & more

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
Nothing here today.

TERM DEPOSIT RATE CHANGES
Treasury has raised its 4 year rate for its Kiwi Bond to 0.40% from +0.20% today. It didn't change the rate on any shorter term. The Cooperative Bank has trimmed its Step Saver bonus saver account by -10 bps to a maximum potential rate of 0.25%.

FEWER NEW CITIZENS
New Zealand welcomed 31,870 new citizens in 2020, down from 44,413 in 2019 and . 11,436 were by descent, down -15%, and 20,434 by grant, down -34%. Australia is still the most common country of birth for people born outside New Zealand to gain citizenship. Just over 5,200 Aussies became Kiwis in 2020, either because they had a parent who is a citizen or they migrated to New Zealand. The United Kingdom comes second, with 5,199 new Kiwis, followed by India, with 2,970. From the USA it was 1825 and from China 1019.

GETTING OUT WHILE MULTIPLES ARE HIGH
The Canadian/American owners of 2Degrees are moving to float their New Zealand business. They control 73% and in their latest three month period reported to September 2020 they reported a growing loss of -NZ$42 mln. But they do have a positive EBITDA for the year to December 2020. And they say with equity markets strong globally, telecom valuations are attractive, "and the New Zealand dollar is at a multi-year high ... now is an opportune time for the shareholders of 2degrees to explore a partial listing of the business". That would "raise primary capital to accelerate growth initiatives at 2degrees as well as enable Trilogy to reduce the debt it incurred while building the 2degrees business." (Their only other operating subsidiary is in Bolivia, where they are breaking even.)

KIWIBANK CONFIRMS CLOSURE OF 7 BRANCHES
Kiwibank has confirmed plans to close seven branches between April and December. The branches are located in Balclutha, Gisborne, Matamata, Onehunga, The Palms - Christchurch, Waihi and Waipukurau. Kiwibank says the closures come with an increasing number of customers using digital services and fewer visiting branches. In terms of staff at the branches, a Kiwibank spokeswoman says; "We are committed to working through options with our teams between now and when branches close, including redeployment opportunities."

POSITIVE TRADING
The Warehouse Group (WHS) has reported half year revenues up +7.4% to $1.8 bln, and NPATx of $55 mln (up +89%). (The Warehouse Group is not part of the NZX50 because it is not widely held. Two parties control almost 70% of its shares.)

LIFELINE
Three out of four firms received COVID-19 related financial support from the government in 2020, Stats NZ said today. Almost half of all businesses qualified as "essential services". Those who couldn't operate tended to be SMEs. “Government assistance offered during COVID-19 restrictions, including wage subsidies and business loans, was one of the key things businesses used to help stay afloat last year,” business statistics manager Geraldine Duoba said. The size of a business (measured by its number of employees) was not a major factor in whether that business took the opportunity to better manage its finances.

ANOTHER NEW HIGH
Yesterday we noted a new high for wholesale electricity prices. Today they are higher again. The benchmark Harwards price is over $497/MWhr up in one day from $437/MWhr. These are very high levels indeed. The average for the past year, including the occasional spikes, is $133/MWhr. The minimum was just $13/MWhr. The Otahuhu price got up to $517/MWhr.

BIDDING HIGHER FOR LOWER YIELDS
Today's NZGB bond tender saw $450 mln offered and $1.182 bln bid. Yields fell from the prior equivalent event. The May 2024 $200 mln offer had 4 winning bidders who were prepared to go down to 0.39% pa, far lower than the prior 0.57% pa. That left 22 others empty. The April 2027 $150 mln went to 9 winners leaving 14 empty. The winners bid 0.95% pa, down from the prior 1.18% pa. The May 2041 $100 mln was won at 2.43% by 10 of 27 bidders, also lower than the prior 2.58% pa.

REGIONAL GDP REVEALED
According to a Stats NZ release today of regional GDP, in the year to March 2020, New Zealand’s total GDP was $323.1 bln with the North Island generating 78% compared with 22% for the South Island. Taranaki had the highest GDP per capita, at $76,715, followed by Wellington ($74,785) and Auckland ($71,978).

GOLD FIRM
Gold is trading in Australia, and soon in Asian markets. So far today it is at US$1,34 and up +US$8 from this time yesterday.

EQUITIES MIXED
The S&P500 fell away sharply at the end of trading today ending down -0.6%. The Tokyo exchange has opened up +0.5% with a recovery from yesterday, while the Hong Kong Exchange has opened down again, this time down -1.4%. The Shanghai exchange has opened down -0.5%. The ASX200 is up +0.3% in early afternoon trade and the NZX50 Capital Index is matching that, up +0.3% near the close.

SWAP & BONDS HOLD
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. They probably held after yesterday's big drop. The 90 day bank bill rate is unchanged at 0.34%. The Australian Govt ten year benchmark rate is up +4 bps at 1.71%. The China Govt ten year bond is also lower at 3.22% and a -2 bps slip and this is compounding now. And the New Zealand Govt ten year is up +5 bps at 1.58% and above the level of the earlier RBNZ fixing at 1.54% (-3 bps). The US Govt ten year is currently up +2 bps from this time yesterday at 1.62%.

NZD LOWER
The Kiwi dollar has now dipped well below 70 USc and is now at 69.7 USc. On the cross rates we are holding lower at 91.8 AUc. Against the euro we soft at 59 euro cents. That all means our TWI-5 is now marginally lower at 72.2.

BITCOIN DECLINES YET AGAIN
Bitcoin has fallen to US$52,333 which is another fall, this time of -2.6% from this time yesterday. Volatility over the past 24 hours has been very high at +/- 5.3%.

This soil moisture chart is animated here.

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