A review of things you need to know before you go home on Friday; a new sub 4% home loan rate, factory slowdown, more concrete, retail gains, swap rates fall, NZD holds

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

MORTGAGE RATE CHANGES
Big news today – HSBC has brought back its sub-4% mortgage rate. Today it announced a 3.99% rate for 18 months fixed, but only for its Premier customers. Stagnant one and two year swap rates will have given it the space to go there again. NZCU Baywide have raised both its 18 month and 2 year fixed rates today.

DEPOSIT RATE CHANGES
No changes to report today.

ANZ NZ LIFTS QUARTERLY PROFIT +16%
ANZ NZ increased December quarter net profit after tax by +16% as income rose +11% and expenses fell -2%. The bank’s first quarter profit rose to $403 mln from $347 mln in the same quarter of the previous year. Credit impairments rose $10 mln to $37 mln. ANZ’s customer deposits increased +7% and its gross lending rose +5%.

NOT ROSY ON THE FARMLET …
Lifestyle block sales were there lowest in two years in January and prices were flat. REINZ says this market is ‘challenging’.

… AND A FACTORY SLOWDOWN
Activity in New Zealand’s manufacturing sector saw January experience a dip in expansion, according to the latest PMI data. BNZ said “the slowdown in expansion was mainly because of a marked slowdown in its production index, which dampens expectations of a big bounce in the PMI over the short term”.

MIXED DAIRY SIGNALS
The next dairy auction is on Wednesday. The last one achieved only a tiny gain. The latest derivative market signals are not encouraging. But surprisingly, the USDA monitoring of Oceania market pricing is reporting higher prices across the board, enough to record gains in NZD terms, even.

A FAST SHIFT NORTH
There were 277,851 m3 of ready-mixed concrete poured in Auckland in the December 2016 quarter. This is an all-time record and an impressive +16.9% above the same quarter a year ago, which itself was an all-time record. This is proof those esoteric building consents are actually in construction. In Wellington, they had a -5.1% decline on the same basis. In Christchurch, the decline was -21.4%.

‘AFFORDABLE PREFABS’
In a press release about supporting the Gisborne economy, Labour leader Andrew Little revealed that the party’s promise of 100,000 new KiwiBuild houses will be prefabs. “By bolstering an already growing prefabrication industry, we can boost the industry’s ability to build houses at affordable prices. Under Labour’s KiwiBuild programme, we will construct 100,000 modern, affordable homes over 10 years for sale, at cost, to first homebuyers. KiwiBuild will increase demand for prefabricated housing around New Zealand,” is what he actually said.

BIG TICKET RETAIL DRIVES GAINS
Retail sales rose +4.7% in the December quarter, up from +4.6% in the September quarter, according the Statistics NZ data released today. That is $22.8 bln was spent at retail in the three months to December 2016, up +$1 bln from the same period a year ago. Pushing this along hard was our demand for cars, which were up +9.0%. DIY stores were up +7.7%, pharmacies were up +8.8%, and restaurants were up +7.0%. These four categories accounted for two thirds of the gains. No category declined, but fuel retailing showed zero gains. (Just as an aside, non-housing household debt rose +4.1% in the same period.)

‘TRUST US’, SAY INSURERS
The Insurance Council of New Zealand has released data it says “makes evident that the public can have trust and confidence in their dealings” with the industry. Of the 1.12 mln claims general insurers received in the 2016 calendar year, they received 3,858 complaints. While most were dealt with in-house, 204 complaints were lodged with the Insurance and Financial Services Ombudsman and Financial Services Complaints Ltd. Fourteen of these were upheld. In spite of all the bad press Youi has received, the ICNZ says there were no “significant” breaches of its one-year-old Fair Insurance Code reported from the IFSO and FSCL.

NEW FINANCIAL ADVICE LAWS A STEP CLOSER
The Government has released a draft Bill for public consultation that amends the regulation of financial advice in New Zealand. The proposed new regime puts clients’ interests first, provides rules around robo-advice, ups disclosure requirements, does away with the existing AFA, RFA and QFE adviser categories and attempts to clean up the Financial Service Providers Register.

WHOLESALE RATES DOWN
Rates fell by -2 bps across the curve today. That means the curve steepness is unchanged at +93 bps for the 1-5 curve and +118 bps for the 2-10 curve. These are close to their recent highs which we last saw in December. Today’s 90 day bank bill rate is down -1 bps at 2.03%.

NZ DOLLAR HOLDS
Against the US dollar we are the gains we made yesterday, and now at 72.2 USc. On the cross rates we are also holding at 93.7 AUc, but a little lower at 67.7 euro cents. The TWI-5 index is now at 77.5. Check our real-time charts here.

You can now see an animation of this chart. Click on it, or click here.

Daily exchange rates

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for(i=0;i

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