Here are the key things you need to know before you leave work today:
MORTGAGE RATE CHANGES
Kiwibank has reduced its 2 yr special rate from 4.65% to match BNZ’s offer of 4.49%. This makes it a joint market leader amongst the major banks.
TERM DEPOSIT RATE CHANGES
No changes here today.
Minister for Trade and Export Growth David Parker has signed the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) in Santiago, Chile. The Agreement brings together 11 countries whose combined economies make up 13.5 percent of world GDP – worth a combined US$10 trillion. The agreement, Parker says, gives New Zealand new opportunities in markets like Japan and protects the Government’s right to regulate in public interest. In addition to the CPTPP, New Zealand also joined Chile and Canada in issuing a Joint Declaration on fostering progressive and inclusive trade. New Zealand has also signed agreements to exclude compulsory investor-state dispute settlement (ISDS) between them and Australia, Brunei Darussalam, Malaysia, Peru and Viet Nam. The investor-state dispute settlement mechanism had been one of New Zealand’s main concerns about the agreement.
ELECTRONIC CARD TRANSACTIONS
The electronic card transactions data released today showed that in February 2018 total retail spending grew by $157 mln or +3.3% year-on-year. Core retail spending was up $174 mln or +4.3% over the same period. Total card spending, including non-retail sales, was up by $245 mln or +3.8% year-on-year. Retail spending growth was led by the hospitality and the consumables sectors, up +7.4% and +4.3% respectively. Spending on vehicles was up +7.2% but spending on fuel was down -4.6%.
TRADE ME DECLINED
Commerce commission declined TradeMe’s application to acquire Motorcentral, a Christchurch based provider of Dealer Management Software (DMS). DMS softare is used by motor vehicle dealers to manage their businesses and may include functionality such as keeping track of inventory, customer relationship management and uploading vehicle listings to online advertisers. TradeMe operates a similar software called DealerBase. The Commission considered the effects of the merger on competition in the DMS products market and the supply of online classified advertising to motor vehicle dealers. Chairman Dr Mark Berry said the Commission could not be satisfied that the merger would not be likely to substantially lessen competition in the relevant markets.
CANADA AND MEXICO EXEMPTED
President Donald Trump has signed the tariff order for the 25% tariff on steel and 10% tariff on aluminium. “If you don’t want to pay tax, bring your plant to the USA,” Trump said. However, he has backtracked on his earlier statement that imports from all countries would attract the tariff – Mexico and Canada have been exempted as Trump believes they treat the US fairly on trade. US stocks and Treasury bond yields were up on the announcement.
The Chinese CPI numbers released today had strongly surprised to the upside, with the CPI reading at 2.9% – a level last seen near November 2013. The CPI reading for January was 1.5%, which was left unchanged, and the consensus forecast for the February reading was 2.4%.
Sheep farmers in Australia are unable to capitalise on wool prices reaching record highs of AU$18.30/kg as they cannot find enough shearers to process the sheep. The lack of shearers is so pronounced that wool suppliers in Australia, which provides around 90% of the world’s exported fine wool, are struggling to meet demand. This has forced garment manufacturers to either sell at a loss or cut their wool content.
BENCHMARK INTEREST RATES LOWER
Wholesale swap rates are lower today with the 2 yr to 7 yr rates down -1 bp and the 10 yr rate down -2 bps. The UST 10yr is down to 2.88% today (-1 bps). The Aussie Govt 10 yr is down -2 bps to 2.81%. The China 10 yr is also flat at 3.89% while the NZ Govt 10 yr is down -7 bps to 2.97%. The 90 day bank bill rate is also unchanged at 1.90%.
The bitcoin price is down to US$9,348.
NZ DOLLAR STABLE
The has traded a tight range today to currently trade at 72.6 USc. On the cross rates we are at 93.3 AUc and at 59.0 euro cents. That puts the TWI-5 at 73.8.
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