A review of things you need to know before you go home on Thursday; ANZ hikes rates, factories & consumers happy, building consents jump, Govt bond yields rise, swaps rise & steepen, NZD stays high

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

MORTGAGE RATE CHANGES
NZ's largest home loan lender - ANZ - has raised rates for almost every term, including a +10 bps hike of their floating rate. HousingNZ also raised fixed rates today, but these remain well below those offered by ANZ.

DEPOSIT RATE CHANGES
ANZ also raised a few selected longer term TD rates, while cutting a few short term rates minorly.

MANUFACTURERS HAPPY
The BNZ-BusinessNZ's December PMI still finished off the year at 54.5 and well above its long term average of 53.2. It caps off a positive year for the manufacturing sector where the PMI averaged 56.0. Indeed, since the survey started in 2002, last year’s average has only been surpassed by 2004’s 57.5. The positive sentiment is supported by the latest QSBO from the NZIER where most key manufacturing indicators were above long-term averages (and even more so for the economy wide indicators).

CONSUMERS EVEN HAPPIER
Consumer sentiment rose impressively in January, according to the ANZ-Roy Morgan survey. A lift is typical for this time of year, but it’s more than that – the index is at its highest since April 2015. Economic momentum appears to have started 2017 on a similar footing to how 2016 ended – strongly. Inflation expectations rose, while house price expectations fell.

ENDING THE YEAR ON A HIGH
November residential building consent data was out today and these revealed a big jump in Auckland housing consents which pushed up the national totals to an 11 year high. For Auckland, it was a 12 year high. The strongest rises were for townhouses, followed by consents for apartments. Consents for houses remained on an upward track.

A BUMP IN THE ROAD
The value of non-residential consents in November was $411 mln, -23% lower than November last year. Results for the December quarter are coming through weaker than expected. But given that the economy is still accelerating, analysts are still expecting positive growth in non-residential building consents in the months ahead.

HIGHER RATES HIT GOVT BORROWING
Today's Government bond tender brought noticeably higher yields - despite less interest from bidders. The average weighted accepted yield was 3.13%, up from 2.88% at the last event, reflecting the recent rise in global yields, and the highest these 2025s have ever yielded.. However the coverage ratio dropped significantly with a low average bid size.

SOME GOOD, SOME BAD IN AUSSIE
Across the ditch, the Australian jobless rate rose slightly above expectations in December, rising to 5.8% on November's 5.7% level. That's its highest level in six months. However, at the same time, more new jobs were created than was anticipated, adding 9,300 full-time roles and 4,200 part-time positions. Their participation rate inched up to 64.7% (NZ's is at 70.1%.)

AIR NZ EXECUTIVE TO BE HEARTLAND'S NEW CFO
Heartland Bank has named David Mackrell as its new chief financial officer. He joins on February 15 from Air New Zealand where he has been deputy chief financial officer. Mackrell succeeds Simon Owen whose departure was announced before Christmas.

BAYCORP MANAGER SHIFTING TO THE WAREHOUSE
Donna Cooper has been named CEO of The Warehouse Group Financial Services Ltd, effective March 13. Cooper is currently general manager of Baycorp NZ and has previously worked for American Express. Cooper is effectively replacing Hadyn Halls, chief operating officer of the business, who is leaving.

WHOLESALE RATES RISE, STEEPEN
Following a good rise in UST benchmarks (pushed by strong US CPI data, and a key Yellen speech), our wholesale rates have jumped today in a strong steepening bias. The one year is up +1 bp, the two year is up +4 bps, the five year is up +6 bps and the ten year is up +8 bps. The 90 day bank bill is unchanged at 1.99%.

NZ DOLLAR HOLDS HIGH
Our currency has eased off yesterday's highs but is still strong. The NZD is now at 71.3 USc. On the cross rates, we at 94.9 AUc, and at 67.1 euro cents. The TWI-5 index is at 77.2. Check our real-time charts here.

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