A review of things you need to know before you go home on Monday; mortgage and TD rate changes, commodity prices up, rents up, Auckland house sales down, dairy prices looking up, wholesale rates rise, NZD stable

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

MORTGAGE RATE CHANGES
TSB has now ended its 4.44% one year ‘special’ fixed mortgage rate. The reverted rate is 4.49%.

TERM DEPOSIT RATE CHANGES
Heartland Bank has raised its 4 and 5 year offer rates by +10 bps to 3.90%. Kiwibank has decreased its 1 and 2 year rates by -5 bps to 3.40% and 3.60% respectively. And the Police Credit Union has trimmed its nine month TD rate by -10 bps to 3.50%.

FRESH START
ANZ reported its Commodity Price Index rose +0.7% month-on-month in January, a welcome change in direction following a 3-month slide. (It’s +4.1% higher than in January 2017.) The lift was broad-based with meat, dairy, forestry and aluminium prices all lifting; the only fall was seen in milkfat products. The NZD continued to squeeze higher against major trading partners in January (NZD TWI up +1.8% m/m), pushing the NZD commodity price index down -2.9% m/m (but up +4.8% y/y). Only aluminium prices managed to increase in local currency terms.

RISING TIDE
Rents for three bedroom houses are holding at their record high $440/week nationally in January according to MBIE tenancy bond data. In Auckland they were down however to $620/week (but +3.3% above January 2017), in Wellington they are now a new record $600/week (and up +8.3% in the year), while in Christchurch they are now $420/week.

AUCKLAND REAL ESTATE STUMBLES
Major Auckland realtor Barfoot & Thompson have had their worst January sales since 2011 and the second-lowest of any month since then. They have started 2018 with lower sales, lower median prices, and inventory levels rising. Still, while all these levels are depressed they are nowhere near as bad as those we saw in 2011. In fact, their drop-out rate (listings that never sell) is in fact quite low at just 10.7% and the lowest since March 2015.

UPSIDE?
We have a dairy auction early on Wednesday morning and the futures pricing for WMP is signalling a +7.2% rise, and a +10.3% rise for SMP. If these eventuate, that will lift dairy industry spirits – and possibly hold the dairy payout levels forecast – even possibly give it some upside. But as regular readers know, those futures market signals are not always reliable.

CHINA SERVICE SECTOR TURNS UP
The Caixin China Services PMI rose +0.8 points to 54.7 in January, the joint-best reading since October 2010.

AUSSIE JOB ADS SURGE
In Australia, job ads surged by the most in a decade in January, pointing to still-healthy demand for labour despite months of rapid employment growth. The ANZ survey revealed a jump of +6.2% from December, when they fell -2.7%. That was the largest monthly rise since February 2010.

BIG ADJUSTMENT
Equities are taking a bath today. The ASX200 is down -1.6%, the Nikkei225 is down -2.5%, the NZX50 is down -1.4%, the Shanghai exchange is off -0.4% and the Hong Kong index is down -2.1%. These are all following Wall Street’ s -2.1% drop on Friday EST as bond prices tumbled and yields raced higher.

BENCHMARK INTEREST RATES RISING
Swap rates are rising again today. The two year is up +1 bp, the five year is up +3 bps and the ten year is up another +4 bps. Meanwhile the UST 10 yr has risen again this afternoon and is now at 2.86%, up +8 bps from this time om Friday (NZT). The Aussie 10 yr is at 2.89%, up +7 bps since Friday. The Chinese 10 yr is at 3.94% (-1 bp), and the Kiwi 10 yr bond is 3.005, up +1½ bps from Friday. The 90 day bank bill rate is unchanged.

BITCOIN BELOW US$8,000
Bitcoin is now at US$7,992 and under US$8,000 again (it dipped below on Saturday first). Other cryptocurrency prices are falling similarly.

NZ DOLLAR LITTLE CHANGED
After a run up over 74 USc on Friday the NZ dollar is now down at 73 USc. The Kiwi is now at 92.1 AUc, and at 58.6 euro cents. This puts the TWI-5 at 73.9.

Daily exchange rates

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End of day UTC
Source: CoinDesk

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