Here are the key things you need to know before you leave work today:
MORTGAGE RATE CHANGES
Kiwibank has reduced its one year fixed rate to 4.29% (-6 bps) and raised its two year fixed rate to 4.65% (+16 bps).
TERM DEPOSIT RATE CHANGES
Westpac has raised its eight month term deposit rate to 3.45% (+20 bps).
NEW PTA FINALISED
Finance Minister Grant Robertson and Reserve Bank of New Zealand Governor-designate Adrian Orr will sign a new Policy Targets Agreement (PTA) on Monday 26 March. The results of Phase 1 of the Review of the Reserve Bank Act 1989 will also be announced on Monday.
A TRUMP DUMP
It is red ink across nearly all the world’s equity markets today following the escalation of tariff hostilities. The S&P500 was down -2.5% earlier today, and now the NZX50 is down -1.2%, the ASX200 is down -2%, Hong Kong is down -3%, Shanghai is down -2.7% and Tokyo is down -3.6%. You may recall that the US President claimed personal kudos for markets reaching record highs – I wonder what he will twist out of this. This is how the Chinese are reacting to the US tariffs, with tit-for-tat responses. In a separate statement from the Chinese Embassy in Washington DC, they say they will “fight to the end” to win this tussle.
MUSICAL CHAIRS AMONG BNZ HIERARCHY
BNZ says acting CFO Peter MacGillivray has been appointed its permanent CFO after previous appointee Mandy Rutherford withdrew from taking on the role. MacGillivray’s appointment is subject to RBNZ approval. Additionally two other BNZ executives have resigned. They are director for transformation and enterprise performance Richard Griffiths, and director for strategy and planning David Moloney. BNZ says a new director (singular) of strategy and transformation will be announced soon. The changes come after Angela Mentis replaced Anthony Healy as CEO earlier this year.
INTER-ISLAND CHECK POINT
In an attempt to limit the spread of mycoplasma bovis, a cattle disease (but no threat to humans), the Government today announced an intensive program to track cattle movements across Cook Strait.
WET BUS TICKET
In Australia, the two director/owners of Storm Financial, which went bust taking down $800 miln of retirees savings during the GFC, are now facinging fines of $70,000 each for their role. (Not a typo.) They faced civil, not criminal proceedings, after enjoying a lavish lifestyle. The banks they used to fund their schemes have fronted, providing $360 mln in restitution, but the key originators who defrauded both their clients and the banks are to get away virtually scot-free.
BENCHMARK INTEREST RATES DROP
Wholesale swap rates have fallen again today, down -1 bp for all terms to 4 years, and -2 bps for longer terms except the 10 year which is down -3 bps. That shift has made the 2-10 rate curve its flattest since November 2016. The UST 10yr yield is sharply lower on the trade war worries (flight to ‘safety’), down -7 bps to 2.80%, an eight-week low. The Aussie Govt 10 yr is down -4 bps to 2.67%. The China 10 yr is down -5 bps at 3.76% and the NZ Govt 10 yr is down -3 bps at 2.84% in sympathy. The 90 day bank bill rate however is unchanged at 1.96%.
BITCOIN DOWN SHARPLY
The bitcoin price is down to US$8,411, a loss of -7% from this time yesterday.
NZ DOLLAR UNCHANGED
The NZD is little changed and now at 72.2 USc. On the cross rates we are still at 93.6 AUc and at 58.6 euro cents. That leaves the TWI-5 at 73.2. The risk-off, trade war reaction has not hit the currency markets, yet; only the bond and equity markets so far.
This chart is animated here. For previous users, the animation process has been updated and works better now.