A review of things you need to know before you go home on Monday; Kiwibank cuts TD rates, trade in surprise surplus, new mortgage lending rises, huge mycoplasma bovis cull, swaps rise, NZD rises

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

MORTGAGE RATE CHANGES
No changes today to report.

TERM DEPOSIT RATE CHANGES
Kiwibank (who set a competitive one year mortgage rate on Friday) today cut three key term deposit rates for terms 5, 6, 9 and 12 months by basically -5 bps. The NZ Firefighters Credit Union also cut rates.

NO LONGER INDEPENDENT
The big news today is the extension of the RBNZ Policy Targets Agreement to include a) an unemployment goal, and b) [non-voting] Treasury oversight of rate setting. The RBNZ is now no longer a truly independent central bank; politicians effectively have their oar in.

BETTER THAN EXPECTED
The monthly trade balance in goods was a surplus of +$217 mln when markets were expecting a deficit of -$100 mln. Exports rose +$446 mln or +11% from the same month last year to $4.5 bln. A check of the chart shows that New Zealand has become a bit of an export powerhouse with strong year-on-year gains for the past 12 months (that is, exceeding +10% each month). Goods imports rose +$187 mln or +4.6% to $4.2 bln, a new high for total imports in a February month. The previous high was $4.1 bln, in February 2017. Rising machinery imports, a key to improving productivity (and safety) were a feature of the import data. Vehicle imports actually fell.

BNZ FINALLY GIVES UP ON HARBOUR QUAYS WELLINGTON HQ
BNZ has confirmed staff won't be moving back into its CentrePort owned Wellington HQ on Harbour Quays. The building, owned by CentrePort, was first damaged by earthquakes in mid-2013, and most recently by the November 2016 earthquake. BNZ used to have 1,500 staff working from the building. BNZ has been using temporary office space elsewhere in Wellington, and by the end of the year its Wellington staff will be based in Ricoh House, Spark Central and at 96 The Terrace.

CEO HENRY LYNCH LEAVING CO-OP MONEY
Henry Lynch, CEO of Co-op Money NZ, the industry association for credit unions and mutual building societies, is departing in April after almost eight years in the role. Chief Operating Officer Jonathan Lee has been named as Interim CEO. Lynch plans to take some time off work.

A RESTRAINED CHINA
Standard & Poor's issued this note on the new US tariff action against China. "President Trump's long-threatened package of trade sanctions on China has landed, but a trade war isn't yet inevitable. In general, the threatened tariffs and investment restrictions on China won't likely cause deep pain to the Chinese economy, nor will they have a material impact on corporate borrowers in either country. However, S&P Global Ratings believes China's response will be the key determinant on what happens next. So far China's response has been relatively measured, indicating potential tariffs on about $3 billion of U.S. imports. But will China take additional retaliatory action?"

NEW MORTGAGE LENDING
Nationally, new mortgage lending rose +6.6% in February from the same month a year ago. But new lending to first home buyers was up an impressive +23% on the same basis while lending to investors was up only +1.4% in C31 data released today by the RBNZ. In Auckland, after a string of sharp declines, residential household lending to investors rose +10.2% on this basis, while commitments for non-investor lending only rose +5.4%. See C30 data.

WASTE LESSONS
Here is yet another good reason why centralising public transport around one core piece of infrastructure is a path of tears and waste. The future is coming, and fast. Point-to-point is the future. Having to go only where buses and trains go is not; it is worse when public officials "plan" housing just to support their sunk cost in fixed infrastructure.

HUGE MPB CULL
MPI has decided to cull 23,000 cows with mycoplasma bovis, in an attempt to stop the spread of the disease. That is 22 separate cattle herds. Farmers involved will be compensated but it will be a bitter pill for those directly affected.

MORE RED INK
Equity markets have opened the week sharply lower, on top of last week's losses. The ASX200 is down -0.5% today, the NZX50 is down more than -1%. Hong Kong is down a little, Tokyo has opened -0.8% lower. Shanghai is down -1% in early trading.

BENCHMARK INTEREST RATES RISE
Wholesale swap rates have risen today gaining back some of Friday's drop. The two year is up +1 bp, the five year up +2 bps and the ten year is up +3 bps. The UST 10yr yield is up +2 bps to 2.82%. The Aussie Govt 10 yr is unchanged at 2.67%. The China 10 yr is back up +5 bps at 3.81% and the NZ Govt 10 yr is down another -4 bps at 2.80%. The 90 day bank bill rate however is up again, now to 1.97% (+1 bps).

BITCOIN HOLDS
The bitcoin price is down to US$8,370, a loss of just +0.5% from this time on Friday.

NZ DOLLAR FIRM
The NZD is up to 72.5 USc. On the cross rates we are still at 94 AUc and at 58.7 euro cents. That puts the TWI-5 at 73.5, and higher than where we left it on Friday.markets so far.

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