A review of things you need to know before you go home on Wednesday; Westpac raises a key mortgage rate, house sales fall, food inflation up, significant drop in swap rates, NZD stay high, & more

A review of things you need to know before you go home on Wednesday; Westpac raises a key mortgage rate, house sales fall, food inflation up, significant drop in swap rates, NZD stay high, & more

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

MORTGAGE RATE CHANGES
Westpac ended its 3.99% one year fixed rate 'special'. And that means TSB follows up. And don't forget, TSB's rate-match promise will end this Sunday.

TERM DEPOSIT RATE CHANGES
None here today..

HOUSE SALES DROP ALMOST -10% IN FEBRUARY
REINZ says sales were down at a time when they are normally strong; Auckland had the lowest number of sales in a non-January month since 2010. And Auckland days-to-sell has pushed out to 57 days which is its highest since February 2001. But results excluding Auckland show sales volumes down -6.6% year-on-year and prices up +8.9% year-on-year. Investors are pulling back especially in Auckland, and owner-occupiers may also be wary and/or affected by affordability issues. Sentiment is weighing on these markets.

CREDIT UNION CENTRAL MEMBERS BACK 5-WAY MERGER
Members of Credit Union Central are the second to green light a proposed five-way credit union merger. CU Central's general manager Gavin Long says a special resolution at a member meeting was passed with 96% support. Aotearoa Credit Union's members have also backed what's effectively a takeover by Credit Union Baywide of Aotearoa, CU Central, Credit Union South and Steelsands Credit Union. Members of the other three credit unions also vote on the deal this week. 

FOOD INFLATION PICKS UP
Food prices rose +1.7% in February compared with the same month a year ago. This was the largest rise since April 2018. Driving the rise was meat & fish, up +3.5%, and cafe/restaurants. up +2.9%. But butter prices fell -10% to a 19 month low. Fruit & vegetabl;e prices fell -0.6%.

CLIMATE AN ECONOMIC RISK
The RBA has called for immediate action on climate change to avert an "abrupt, disorderly" economic transition. In Australia, that will be seen as a partisan message.

ASIAN DOWNERS
Although Wall Street and Europe closed up modestly last night, the positive vibe isn't flowing through to equity markets in our time zone. The NZX (-0.4%) and ASX (-0.5%) are lower, as is Tokyo (-1.3%), Hong Kong (-0.5%) and Shanghai (-0.7%) in early trade.

HEADS UP
It looks like Gmail is down, worldwide, or at least has stability issues, in case you are wondering.

SWAP RATES FALL, FLATTEN
Local swap rates have fallen sharply today with a flatter bias. The two year is down -3 bps, the five year is down -4 bps and the tem year is down -5 bps so far. All swap rates five years and longer are new all-time lows. The UST 10yr yield is weaker today at just on 2.61%, down -5 bps. Their 2-10 curve is under +15 bps while their 1-5 curve is more inverted at -10 bps. The Aussie Govt 10yr is down today today, by -7 bps to 1.96% (the record low was 1.82% in April 2015), the China Govt 10yr is up +2 bps to 3.19%, while the NZ Govt 10 yr is down -5 bps so far today to 2.07%. The 90 day bank bill rate is unchanged at 1.87%.

BITCOIN STABLE
The bitcoin price is little-changed today, at US$3,856.

NZD FIRM
The NZD has dipped from its overnight level but is still higher than this time yesterday at 68.5 USc. And strewth, we are up against the Aussie to 97 AUc, our highest since April 2015 (and don't mention the war parity), and holding at 60.7 euro cents. That puts the TWI-5 up to 73.2.

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USD 
NZD
End of day UTC
Source: CoinDesk

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14 Comments

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Are Central banks giving up on saving the economy and moving onto saving the planet?

Nah, saving the banks will still be top of their list.

Exactly, their salaries and pensions depend on it.

Some more kiwibuild houses, 2 bedroom terraced houses, from $529k in Opaheke (~1.5kms from Papakura). The interesting bit was this

"these homes will be built to a Homestar 6 rating, your new home will be warm, dry and cheaper to run. They come fully equipped with double glazing, blinds, heating, security, hard wired smoke alarms and Fisher and Paykel appliances. (They even have LED lights! )"

Just a pity about the location. Great to see they are going to be decently specced.

Honest question, I am not from anywhere near there, don't know the answer. Your comment about location suggests they might struggle to sell. Will they sell a full terrace worth of houses? They are building up a stock of unsold houses already, and IIRC have around 2 billion in capital set aside for Kiwibuild. How much capital can they tie up in land holdings, active development and unsold inventory? If they need 1 billion tied up in land inventory and working capital, they could afford 1 billion of finshed houses, approximately 2000 finished, unsold houses. I'm no developer, but I think that far more than 1 billion will be needed in working capital to get within cooee of the original targets. Thinking about it, I see why whats-his-name quit the lead role before Christmas.

They are only about 3kms further south than the first kiwibuild homes in takanini/papakura. just checked the website, there are 23 of them being built. dunno how they will sell, a 72m2 townhouse with no garaging, 1 carpark and a postage stamp of a deck, vs for the same money and an extra 5 minutes drive off the motorway a three bedroom older house on a 400m2 section (eg: https://www.realestate.co.nz/3502473)

I know which I would prefer.. and it isn't the shoebox, even if it does have good insulation and a warranty.

72m2 south of Papakura. Surely something that small needs to be built close to a town centre to be attractive enough for a young couple to part with over 500k. Not to mention only one parking space, when (edit add MOST) people eligible for *both* Kiwibuild and a mortgage will have two wage earners, needing two cars to get to two jobs. What's a bank going to say about that?

Sounds very cosmetic to me! ...The ultimate sceptic!

Being skeptical is never a bad idea.

I see on the news labour has cut immigration numbers.

Residency down and work visas up. With better class of student and the extra work visa rights after graduation it may prove hard to control permanent residency 7 years from now. EG student arrives to study the easiest course they can find at Auckland Uni, wife has baby in NZ, complete course and graduate and then get work visa filling all those jobs you see occupied by conspicous immigrants. When work visa expires the eldest child will be at school. Not too difficult after 6 years working in NZ to find an employer willing to take a backhander to offer work at the salary limit. How can we send those sad little children back to their parents country of origin - where they have no free education and health service and WFF etc.
I may have details wrong but that's my cynical concern.
On the other hand some postgraduate engineers and computer software designers with good english would be a bonus for NZ. The devil is in the details.

ANZ steadfastly maintain no change in OCR for Australia thru 2020, at same time see multiple OCR cuts in NZ. All other majors see the opposite. Whats lurking in those books.

They can not sell 10 KiwiBore houses in a Wanaka subdivision and yet Twyford has underwritten 211 more KiwiBore homes?
It just gets far more ridiculous by the day!

Yep, they never should have signed up for kiwibuild homes in Wanaka.. or Te Kauwhata or Huapai. FFS, if its not within 10kms of the nearest major centre they shouldn't be signing them up. Twyford is just siging up for any old crap to try to get to his numbers.