A review of things you need to know before you go home on Tuesday; NBS cuts TD rates, truckometer slows, inflation low, retail activity picks up, swaps and NZD settle, & more

A review of things you need to know before you go home on Tuesday; NBS cuts TD rates, truckometer slows, inflation low, retail activity picks up, swaps and NZD settle, & more

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

MORTGAGE RATE CHANGES
No changes today.

TERM DEPOSIT RATE CHANGES
Nelson Building Society (NBS) have cut their 9 month, 1yr, 2yr and 3yr term deposits from -5 to -15 bps.

WANING MOMENTUM
ANZ's Truckometer monitoring brought a bounce back in January after weak December data. This series tracks road freight activity. But the January lift in the Heavy Traffic Index in particular was halfhearted. Time will tell if it’s just a pothole or something more meaningful, says ANZ. The Heavy Traffic Index rose +3.5% month-on-month, regaining around half its falls in the preceding two months. Year-on-year it is only +1.9% higher so only suggesting very modest Q4 GDP growth. The Light Traffic Index bounced +2.2% month-on-month, but the trend suggests waning momentum says ANZ even though that index is +3.0% higher that a year ago.

STILL NO INFLATION
ANZ's independent monthly tracking of inflation isn't finding much. They report that prices are rising in a gradual yet unspectacular fashion on the back of previous strength in the economy. They say they expect non-tradable inflation will nudge higher in the short term, but then dissipate. Broad-based inflationary pressure is still largely missing, outside of housing.

RETAIL RECOVERY
Retail card spending recovered in January following a sharp drop in December, Stats NZ said today. Retail spending using electronic cards was +$5.5 bln, up +4.0% from January 2018.

SHARP PULLBACK
The extent of the pullback in debt approvals in Australia has been revealed today in December data published by the ABS today. And it is substantial. Investors took on a remarkable -23% less debt in December from the year before, while household demand fell -13%. For all of 2018, investor demand fell -16% compared with 2017 and owner-occupier demand fell -2%. Any fall is significant, but the size and speed of these declines at the end of the year are quite remarkable. (Their seasonal adjustment numbers sanitise the extent of the fall-off.)

EQUITY REVIEW
There is another strong performance taking place on the NZX today with the NZX50 up +0.6% in late afternoon trade. It is positive also in Australia, but more restrained, up +0.3%. Shanghai is flat, Hong Kong is down -0.3% while Tokyo has returned after their long weekend in a very positive +1.3% mood. All this comes after Wall Street closed unchanged and European markets were up a strong +1%.

SWAP RATES SETTLE
Wholesale swap rates dipped back a little today by about -1 bps across the curve after yesterday's +3 bps rise. The UST 10yr yield rose last night by +3 bps to 2.66% and has held that so far today. Their 2-10 curve is still at +17 bps. The Aussie Govt 10yr is unchanged at 2.10%, the China Govt 10yr is also unchanged at 3.11% , while the NZ Govt 10 yr is up +2 bps to 2.13% following yesterday's rise in swap rates. The 90 day bank bill rate also dipped by -1 bp to 1.90%.

BITCOIN SLIPS
The bitcoin price has slipped -1% today to $3,571.

NZD SOFT
The NZD is softer by -½c today at 67.2 USc. We are at 95.2 AUc, and are at 59.6 euro cents. That has the TWI-5 slipping slightly to 71.9.

WATER DAMS PAY OFF
Yes, it is drying off fast. So time to check in on some water storage levels. In Auckland, the storage dams are almost all over +95% full at this stage, an unusually strong position to be in as the seasonal drought bites. If you know of other city storage data, please note it in the comment section below. The hydro lakes storage levels are about the same as last year and only marginally below their 90 year average.

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21 Comments

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Highlight new comments in the last hr(s).

Video of the 'small' gathering!
https://www.youtube.com/watch?v=5iiO1SMhrlw

There is a lot of discontent across Europe. I wonder how it will resolve. Presumably each election will boot out more of the out of touch. Can't help thinking we need something like it here. The politicians and bureaucrats still think they are the answer. They create the house price problem, the overcrowding problems on our roads and in our houses. They waste our money on themselves and their silly ideas, as if it is their right to do so, all the while telling us they know best.

How can the great unwashed not recognise that these are "good problems to have" and a "sign of our success"?

It's the curse of the liberal western, judeo-Christian world view. Very Best intentions, but backfiring

Certainly problems of the distrust of the media especially the BBC.
But your linked source is possibly not reliable - more likely "Tens of thousands protest Spanish PM’s Catalan policy"

Bbc is quite ideological

"Investors took on a remarkable -23% less debt in December from the year before, while household demand fell -13%. For all of 2018, investor demand fell -16% compared with 2017 and owner-occupier demand fell -2%. Any fall is significant, but the size and speed of these declines at the end of the year are quite remarkable."

Wow. I will be curious to see how the RBA and the Gov respond.

They will intone seriously, That Something Must Be Done. Implying they are the people to do it. Deluding themselves that these are not problems they created. That no one could have seen it coming. Yellow vests anyone?

And with the RBNZ tomorrow. https://www.rbnz.govt.nz/statistics/m14

https://www.dlacalle.com/en/the-new-green-deal-is-just-old-white-elephants/

The US is already the second top market for renewable investment according to EY.

Renewable and green investments are already flourishing without the need for politicians to interfere. In fact, the US is investing more than $40 billion per annum in renewables, and if we add infrastructure and energy efficiency, the US is still the top global destination of productive investment in green energy, technology, and infrastructure.

The US has been able to reduce CO2 emissions while the European Union with the largest subsidy plans and high tax on CO2 increased them. The US has achieved more in developing renewables, technology and energy efficiency without massive tax and bill increases. There is nothing “green” on a central planner’s decision to inflate GDP via public spending. it is the opposite. It artificially increases energy and capital utilization to create false demand signals that end up being bubbles that hurt the economy and make it less dynamic.

Damn the market, always coming up with solutions to problems. Don't they know that's the politicians job!

Chris Hipkins will announce tomorrow the NZ wide restructuring of the Polytechnic ITP sector.
National claims that 1000 jobs will be lost.

1000 “jobs” with an average of 4 hours per week each.

"He now lives in New Zealand, where the cost of living is cheaper. In court Donaldson cried as he recounted how his world had collapsed after he was caught inflating his key performance figure. He admitted to entering fictitious transactions and fixed cashflows into Deutsche Bank's internal systems in the 2014 financial year to increase the profit component of his profit and loss and mask his trading losses. He then used the figure to get bigger bonuses"

Whoever was overseeing this chap needs to go a well.
https://www.afr.com/markets/derivatives/exdeutsche-bank-trader-walks-fre...

I know him personally. Very smart guy.

Baltic Exchange Dry Index has collapsed -58% in 40 days

https://www.howestreet.com/2019/02/01/baltic-dry-index-down-47-ytd/

China’s retail sales in Spring Festival slows to single-digit growth for first time in a decade

https://www.yuantalks.com/chinas-retail-sales-in-spring-festival-slows-t...