Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).

MORTGAGE RATE CHANGES
Kiwibank raised their offset floating rate by +10 bps to 5.75%. All current mortgage rates are here. And note, you can compare mortgage offers with our new calculator that takes into account other costs and cashback incentives, here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Southern Cross Partners trimmed their rates by -25 bps today to 5.50%. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

PAYOUT COMING FOR ASB CUSTOMERS
Following ASB’s [somewhat surprising] $135.6 mln agreement to settle class action relating to home and personal loans between 2015 and 2019, the funds will be distributed tomorrow into customer accounts. Although their customers will be pleased to receive this, they must remember that ASB has acknowledged that the funds were taken inappropriately in the first place. This is the same case that ANZ is still fighting. (By the way, injecting $135.6 mln into customer bank accounts in March, if it is used to spend because of inflation pressure, could have as much as a +1.2% impact on March retail sales.)

LONG FLAT TRENDS EMERGE
The REINZ released its February sales data today. The data in that describes a flat housing market. February sales volumes and selling prices were unchanged year-on-year. In fact the national median selling price is little-different to what it was in December 2022, after the pandemic run-up/down. Sales volumes are very similar to what they were in February 1995.

MINIMAL GAINS
StatsNZ released its February retail sales tracking via electronic cards today. That shows retail spending bounced in February, rising +1.4% over January when seasonality factors are accounted for. That reversed the large -1.1% unexpected fall in January. Year on year, the February level is +1.5%. Which might be positive until you realise this data is not inflation-adjusted. Worse is that, given the global geopolitical situation inducing general risk aversion, March is hardly likely to show an improvement.

DIGGING INTO HOW US TARIFFS MIGHT AFFECT US
And the RBNZ has been doing work exploring the implications of changes in US tariff policy for the New Zealand economy, and have published their analysis. Among the things they found were that over time the tariff shock is disinflationary in the short run as it leads to trade diversions and appreciation of our currency which lower import prices. The disinflationary pressure induces lower interest rates supporting the domestic economy. But overall, despite the weaker export sector, the effect on domestic real GDP is relatively modest. Over a longer timeframe however, global supply chains become more inefficient contributing towards higher import prices, creating some inflationary pressure by around 2030.

SERVICE SECTOR SLUMP
Even less positive was the BNZ/BusinessNZ release of their February services PSI. It unexpectedly contracted. BNZ economists say these service sector figures are ‘are real disappointment’ and suggest ‘the economy is growing at a slower pace than we might have expected’.

TAKE A BREAK AND DO OUR QUIZ
Our quiz has been updated for this week’s edition. You can do it here. And a new one will be added every Monday.

NZX50 DECLINES AGAIN
As at 3pm, the overall NZX50 index is down -0.3% so far today. It is heading for a +0.3% rise over the past five working days, and is down -0.7% from six months ago. From a year ago it is now up +8.1%. Market heavyweight F&P Healthcare is down -1.9% so far today. There were 29 gainers led by EBOS, Chorus, Freightways, and Infratil. There are 49 decliners, led with Kathmandu, SkyCity casino, AirNZ, Vista and Serko.

HURRELL TO STEP DOWN
The Fonterra group CEO has handed in his [required six month] notice. Miles Hurrell says Fonterra is ‘entering the next phase in its strategic implementation’, which ‘marks a natural turning point for a new leader to step in while I consider what’s next for me’.

COST OF DOING BUSINESS
Meanwhile in Australia, the New South Wales Supreme Court has ordered Macquarie Securities to pay a AU$35 mln penalty for multiple systems-related failures that caused the misreporting of tens of millions of short sales over several years.

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SWAP RATES HIGHER
Wholesale swap rates are likely to be higher today (especially for rates 2+ years) as the general tone remains negative. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +2 bps at 2.52% on Friday. Today, the Australian 10 year bond yield is up +4 bps at 4.98%. The China 10 year bond rate is up +2 bps at 1.83%. The Japanese 10 year bond is unchanged at 2.24% today. The NZ Government 10 year bond rate is now at 4.74%, up +6 bps from this time Friday. The RBNZ data is now ‘prior day’ with the Friday rate unchanged at 4.66%. The UST 10yr yield is down -3 bps from this morning, now back at 4.26%.

EQUITIES MIXED
The local equity market has fallen -0.4% in Monday trade so far. The ASX200 is down -0.3% in afternoon trade. Tokyo has opened on Monday down -0.7% in its opening trade. Hong Kong is up +0.3% but Shanghai is down -0.8%. Singapore is up a minor +0.1%. Wall Street futures are giving the signal that the S&P500 will open its week tomorrow up +1.3% because they expect a relief rally after some [as yet unexplained] ‘good news’..

OIL STAYS ELEVATED
American oil prices have stayed high but barely changed with the WTI benchmark still at just over US$98.50/bbl, while the international Brent price is up +US$1 to just over US$104/bbl. There are still no ships transiting the Straits of Hormuz, other than a handful of ships with Indian LNG – with Iran’s blessing.

CARBON PRICE UNCHANGED
There have been a few larger trades so far today on the secondary market, but the price is unchanged at $44/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD SOFTER
In early Asian trade, gold has eased again from this morning, down another -US$6/oz and now back at US$5012/oz. Silver is down -50 USc to US$80/oz.

NZD LOWER
The Kiwi dollar is up +20 bps from this morning’s open against the USD, now at just under 58.1 USc. Against the Aussie we are up +10 bps at 82.8 AUc. Against the euro we are up +10 bps at 50.7 euro cents. This all means the TWI-5 is now just over 61.8 and up +20 bps from where we were this time this morning.

BITCOIN FIRMS
The bitcoin price is now at US$72,739 and up +1.9% from this morning’s open. Volatility has been modest however, at +/- 1.6%.

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