A review of things you need to know before you sign off on Tuesday; more TD rate rises, local labour market still strong, CER celebrated but trade turns against us, swaps stop falling, NZD stable, & more

Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).

MORTGAGE RATE CHANGES
None to report today.

TERM DEPOSIT/SAVINGS RATE CHANGES
Investment-grade Liberty Finance (BBB-) has raised its TD offers, and that now includes 7.00% for one year and 6.50% for nine months. Heartland Bank raised most of their TD rates, but didn't change their 6% 12 month rate. They also raised a savings rate; Direct Call is now 4.10%. Bank of India raised rates.

LABOUR MARKET RETAINS IT STRENGTH
The February 'employment indicators' from the IRD's PAYE tax records aren't signaling any recession-signaling yet. Year-on-year employment is growing, and month-on-month it is growing faster than some analysts were assuming. But as they will remind you, employment is a lagging indicator. Interestingly, the extended and deepening real estate funk has not yet caused employment to drop, savings to fall, or even sentiment to fall faster. Those who thought we were linked to the housing market at-the-hip may have to re-think that assumption.

ANOTHER BOND OFFER
Christchurch City Holdings is in the market for up to $150 mln of 5 year, unsecured, unsubordinated, fixed rate bonds. The rate will be the 5 year swap rate on March 30, plus an indicative margin between 0.70% - 0.77%. If today's opening swap rate applied then, the yield would be something like 5% or just below. But swap rates have been falling sharply recently. This bond isn't being marketed with 'green' credentials. They will likely be rated AA. These funds will be used to repay bridging finance CCHL used to repay bonds which matured on December 6, 2022 (and had a yield of 3.58%).

APRA BOSS TALKS UP REGULATION OF BIG AUSTRALASIAN BANKS
John Lonsdale, Chairman of the Australian Prudential Regulation Authority (APRA), is talking up the strength of APRA's prudential regulation of Aussie banks, including the parents of NZ's big four, against the backdrop of the banking ructions in the US and Europe. Among other things Lonsdale says Australia is; "the only jurisdiction in the world that mandates banks carry capital to address the risk of rising interest rates as part of their core (pillar one) capital requirements. The significance of this measure in light of current events is hard to overstate," he says. "The differences between the regulatory requirements for Australian banks and many overseas jurisdictions give us confidence that the banking system here is among the best equipped in the world to handle a crisis."

CER CELEBRATED, BUT WE ARE A LOSER
Today is the 40th anniversary of our free trade agreement with Australia, the CER Agreement. The WTO has called it the world’s most comprehensive, effective and mutually compatible free trade agreement. Unfortunately for us, we now run a large trade deficit with Australia. According to the Stats NZ Trade Dashboard, in 2015 we ran a surplus of +NZ$1.6 bln (exports $13.04 bln, imports $11.42 bln for both goods and services). But by 2022 we were running a deficit if -$1.5 bln (exports $13.85 bln, imports $15.37 bln for both goods and services). For trade officials, it has to be somewhat distressing that our exports have languished over these seven years.

LIFESTYLE BLOCK SALES SLUMP HARDER
REINZ reported that there were 1023 sales of lifestyle properties in the 3 months to February. That is a massive -41% drop from the 1754 in the same period a year ago. It is also a drop from the 1115 in the January period.

FARM SALES SLUMP TOO
REINZ also reported that farm there were only 305 farm sales in the three months ended February 2023, compared to 460 farm sales for the three months ended February 2022. That means overall sales were a third lower. In January, the total was 359 farms sold. This year, grazing property sales levels held their own, but the slump in dairy, finishing and horticulture farms was significant.

RETAIL TRADE COOLS IN AUSTRALIA
Retail sales were up in a marginal way in February in Australia, barely beating the very lame expectations analysts had. Clearly this sector is cooling now.

SWAP RATES STOP FALLING
Wholesale swap rates have probably risen slightly today after the recent falls. However, the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is up +2 bps at 5.17% and still +42 bps above the current OCR. Markets are pricing in less than a +25 bps rise at the next RBNZ review on Wednesday, April 5, 2023. The Australian 10 year bond yield is now at 3.28% and up +9 bps from yesterday. The China 10 year bond rate is little-changed at 2.88%. And the NZ Government 10 year bond rate is now at 4.12%, up +2 bps and back to being above the earlier RBNZ fix at 4.10% which down -1 bps from yesterday. The UST 10 year yield is now at 3.52% and up a very sharp +14 bps from this time yesterday.

EQUITIES START POSITIVELY, EXCEPT IN CHINA
On Wall Street, the S&P500 ended up +0.2% in Monday trade. Tokyo has opened up +0.1% in early Tuesday trade. Hong Kong is recovering some up yesterdsay's very sharp -1.8% fall, up +0.7% in early trade today. Shanghai is up just +0.1% after their fall yesterday. The ASX200 is up +1.1% today and the NZX50 is up +0.7% in late trade.

GOLD IN MINOR SLIP
In early Asian trade, gold is down -US$9 from this time yesterday, now at US$1964/oz, although that is up from the New York close earlier in the day.

NZD HOLDS
The Kiwi dollar has risen today, now at 62.2 USc. Against the Aussie we are little-changed at 93.1 AUc. And against the euro we are holding at 57.5 euro cents. That means the TWI-5 is now at 70.1 and little-changed.

BITCOIN DOWN
The bitcoin price has fallen -3.4% from this time yesterday, now at US$26,915. The lawsuit American regulators have hit crypto giant Binance with, alleging "willful" dishonest dealing, money laundering and general bad-faith dealing is no doubt hurting. Binance's has a grip on the US$1+ tln crypto industry that has few parallels in traditional finance. Volatility has been moderate today at +/-2.7%.

This soil moisture chart is animated here.

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