A review of things you need to know before you go home on Monday; fresh food more expensive, rents higher, domestic online wins retail, big kauri, swap rates up, NZD holds

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

MORTGAGE RATE CHANGES
No changes to report here.

TERM DEPOSIT RATE CHANGES
No changes here either.

FOOD PRICES UP FASTER THAN CPI
Although food prices fell in December from November (primarily on store-bought food items), they are up +2.3% from the same month a year ago. The diver here is the rise in fruit and vegetable prices (+4.5%). But be prepared; it is typical for food prices to rise sharply in January (if history is any guide). Food now represents 19.3% of the CPI, its highest proportion in at least six years with more weight given to fruit and vegetables, less to meat and poultry, and less to both groceries and "non-alcoholic beverages" (ie sodas). Both restaurant meals and takeaway food are also claiming a larger share.

THE NEXT CONCERN: RENTS
We will get the next full quarterly CPI update on Thursday, January 26. However ANZ monitors inflation monthly and their update was released today. They have noticed rents are on the move up. Their overall index is +2.9% higher than for December 2016, and that is a rising pace. But they say, other than the housing-related components, signs of a generalised lift in inflation remain elusive.

BUYING IT FORWARD?
BNZ and Marketview analyse online retail sales. Their December figures show it up on last year’s levels, but the growth rates for both domestic and overseas purchases took a big dip. Total online retail spending in December was only up +6% year-on-year. December online spending was up +7% year-on-year at local merchants but only up +4% at international sites. "We are cautious not to read too much into the low growth rate for international purchases at this stage," they said. "For example, perhaps this year consumers brought forward some of their international spending from December into November (which was a very strong month)." Year-on-year to December, the fastest growth in online sales were for "Furniture, Housewares and Hardware".

BIG NEW KAURI
The IDB is launching a NZ$375 mln 5 year AAA NZD kauri bond offer that will yield 3.058%. They won't be listed. Lots of NZDs to be swapped here.

WHOLESALE RATES RISE
Swap rates have risen today with a steepening bias. The two year is up +2 bps, the five year is up +2 bps and the ten year is up +3 bps. The 90 day bank bill rate is unchanged at 1.87%. In the US it is a Federal holiday (ML King Birthday) so there is no trading on Wall Street. In China, their sovereign 10yr yield jumped to 4.03% (+7 bps) at the end of last week, but trading has barely opened in Shanghai at this time. But the early indications are that it will open even higher. The NZ Govt 10yr yield is also higher today at 2.89% (+2 bps).

NZ DOLLAR HOLDS, JUST
The NZ dollar has been slipping with the US dollar, so it still at 72.5 USc. On the cross rates that weakness is showing through so against the Aussie we are at 91.6 AUc and at 59.5 euro cents. This puts the TWI-5 down slightly at 74.1. In contrast, the bitcoin price is now at US$13,652, a small +2.7% gain during today's trading.

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