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
Westpac raised all its fixed rates for terms 1-5 years. Details here. 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
Westpac also raised its term deposit rates for terms 1-5 years. Heartland Bank also raised many rates. Ditto AMP. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

FOOD INFLATION IS RISING
StatsNZ said food prices were +4.5% above year-ago levels in February driven by higher prices for meat, poultry and fish. That is up from a +4.2% rise in the year to January. But the month-on-month January and February changes are a bit dodgy. (StatsNZ was supplied inconsistent data in January by one large supermarket chain and they didn’t pick it up at the time. They have now, so there has been some not-insignificant revisions in the January data.)

RENTS ARE FALLING
The same StatsNZ release included a fall in rents in February. As Westpac has noted: “The most notable feature of today’s update was the 0.1% fall in average housing rents. That is the first fall in nationwide rents in the past 20 years (the furthest back we have monthly data). The summer months are usually the peak period for new rents. However, with low population growth and large numbers of properties available, there has been downwards pressure on rents in many parts of the country. That includes major urban areas like Auckland and Wellington. We expect rental growth will remain subdued over the course of this year.”

FEBRUARY VERY AVERAGE, WORRIES ABOUT MARCH
The conflict in Iran is coinciding with what is usually the busiest month of the year for residential real estate. The housing market may be about to face its biggest challenge since the pandemic. Our February Housing Market Activity Report shows languid activity in the month, the one just before what is traditionally the year’s strongest month in March. But sudden economic uncertainties are expected to take the top off March activity.

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 -0.8% from six months ago. From a year ago it is now up +7.9%. Market heavyweight F&P Healthcare is down -1.4% so far today. Kathmandu, Investore, Vista, and Genesis top gains as Mercury, Serko, F&P Healthcare, and EBOS are the big decliners.

ANOTHER BIG BOND OFFER COMING
Gentailer Mercury said today that it is seeking bond funding of up to $250 mln for a 7 year unsecured, unsubordinated, fixed rate “green bond”.

NO DECLINE SIGNALED YET …
A look at today’s derivatives pricing suggests that tomorrow full Dairy auction should see prices hold or firm slightly.

… BUT THE CHALLENGES ARE MOUNTING FAST
ANZ’s latest Agri Insight sets out the risks of the Middle East conflict on the rural sector. They say higher global fertiliser and fuel prices are going to hurt, compounded by distruptions to significan trade with the Middle East, especially for dairy products. “It’s not clear how long this conflict will last, but the longer and more destructive it is, the longer global energy markets will take to recover. The situation is challenging, but it’s not time to panic. New Zealand’s agri sector is in a much better place than it was in 2022 when the Russia-Ukraine war began.”

LINKING LAUNCH FUNDING TO LONG TERM FUNDING
While we are talking about the rural sector, it is worth noting that major rural financial advisers NZAB has launched a new debt capital platform (initially of $500 mln) to the agri sector, a private credit option for funding on-farm projects that don’t yet meet bank criteria. This funding is intended to bridge the phase until the project can get bank support.

EYES ON THE RBA
At 4:30pm today, the Australian central bank will release the outcome of its review of its cash rate target settings with a backdrop of high and rising inflation before the Middle East war started. The RBA is the first central bank of at least nine this week to review monetary policy in these changed circumstances. Markets have priced in a two-thirds chance of a +25 bps rate rise to 4.1%. Most analysts have come to the view it is the likely result too. The RBA is prioritising its inflation fighting mandate, they expect. After 4:30pm you can see details of their decision here. Update: They raised their cash rate target to 4.10%. But it was a close-run thing. Five members voted for a rise, four to leave it unchanged.

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SWAP RATES ON HOLD
Wholesale swap rates are likely to be little-changed today. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +1 bps at 2.53% on Monday. Today, the Australian 10 year bond yield is down -2 bps at 4.96%. The China 10 year bond rate is up +1 bp at 1.84%. The Japanese 10 year bond is up +4 bps at 2.28% today. The NZ Government 10 year bond rate is now at 4.74%, unchanged from this time Monday. The RBNZ data is now ‘prior day’ with the Monday rate up +7 bps at 4.73. The UST 10yr yield is down -2 bps from yesterday, now back at 4.24%.

EQUITIES MOSTLY POSITIVE
The local equity market has fallen -0.3% in Tuesday trade so far. The ASX200 is unchanged in afternoon trade. Tokyo has opened on Tuesday up +0.5% in its opening trade. Hong Kong is up +1.5% but Shanghai is up +0.4%. Singapore is up a startling +1.3%. Wall Street ended its Monday trade up +1.0% on the S&P500, a level it held all session.

OIL EASES SLIGHTLY
American oil prices have fallen -US$2.50 with the WTI benchmark now at just over US$96/bbl, while the international Brent price is down -US$1 to just over US$103/bbl. There are still no ships transiting the Straits of Hormuz, other than a handful of ships 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 FIRMS
In early Asian trade, gold has stopped falling, up +US$10/oz and now back at US$5022/oz. Silver is up +US$1 to US$81/oz.

NZD HIGHER
The Kiwi dollar is up +50 bps from this time yesterday against the USD, now at just over 58.5 USc. Against the Aussie we are down -20 bps at 82.6 AUc. Against the euro we are up +20 bps at 50.9 euro cents. This all means the TWI-5 is now just over 62.2 and up +40 bps from where we were this time yesterday.

BITCOIN HIGHER
The bitcoin price is now at US$75,188 and up +3.4% from this time yesterday. Volatility has been moderate at +/- 2.5%.

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This soil moisture chart is animated here.

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