A review of things you need to know before you sign off on Wednesday; ICBC launches hot mortgage rate with cashback incentive, Orr resigns, retail stays weak, commodity prices stay high, car sales weak, swaps little-changed, NZD firms, & more

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

MORTGAGE RATE CHANGES
ICBC has cut its one year fixed rate to 5.05%, the market-leading level at present. They are also offering up to $25,000 cashback as an incentive. The Cooperative Bank cut fixed rates too. All rates are here. And you can compare the non-rate incentives here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Only the Cooperative Bank trimmed TD rates today. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

RBNZ LEADERSHIP IN MAJOR CHANGE
Adrian Orr, the Governor of the RBNZ, has resigned. More here. The Government announcement of the change by both PM Luxon and Finance Minister Willis was a fiasco.

TOUGH RETAIL ENVIRONMENT CONTINUES
Payments network Worldline/Paymark said consumer spending nationally reverted to its slight downward trend in the last three weeks of February with the notable exception of Valentine’s Day. Spending through Core Retail merchants reached $3.67 bln in the month, which is down -4.8% on February 2024, and ranging from -7.0% in Auckland, to +1.0% in Whanganui.

DAIRY PRICES HOLD HIGH
First up, the overnight dairy auction came in a bit better than the futures market suggested it might. This event offered lower volumes at the back end of the current dairy season, and prices eased just -0.5% in USD terms from the last full event, but were up +1.0% in NZD terms. WMP eased -2.2% and that was as expected but butter and the cheeses made better gains than expected. Buying out of China was modest, but there was raised interest from both Europe and the Middle East. In the circumstances this was a solid overall result.

WEAK CAR SALES
As is usual, the sales on new passenger cars fell in February from January, but they did end up +17% higher than the stunted level a year ago. Despite that they came in -5.7% lower than the prior ten year average. February imports of used cars were especially weak, and -23% less than year ago levels. In fact, used imports have been running lower than new car sales for the past six months, which is unusual. In the ten years to 2022 that was never the case; now it has become normalised. February EV sales were very low, only 548. Notable was the even lower levels of Tesla's, taking only a 10% share of this shrinking segment, just 57 sold in the month. That is a huge retreat.

THE BIG GAINS CONTINUE
The ANZ World Commodity Price Index rose +3.0% in February from January, up +14% from a year ago. All sectors lifted during the month, except horticulture, which is taking a well-earned off-season break. In NZD terms, these prices are up +23% from a year ago.

NZX UPDATE
The NZX50 has dropped -0.9% so far today but nothing more after the Orr resignation. Oceania & Precinct lead the gains. Fletcher & Auckland Airport lead the falls.

ANOTHER MODEST EXPANSION
In China, the private Caixin services PMI survey basically held its small expansion, and this was better than the slight slippage expected in February from January. The February level is mid-range compared to the past nine months. It was also reporting a better expansion than the official services PMI.

RISING OPTIMISM
In Japan, their service sector saw rising activity in February. It was a fourth monthly rise in a row, with the rate of growth reaching the strongest since August.

MODEST BUT IMPROVING GROWTH
The Australian Q4-2024 economic activity was +1.3% higher in inflation-adjusted terms than the same quarter in 2023, boosted by a better than expected Q4 expansion over Q3.

MODEST, BUT THAT CAN BE EXPLAINED AWAY
And staying in Australia, they reported a small rise in retail sales in January from December, but it may not have been quite what it seems. The data shows most of the monthly gain coming from basic food, which was affected by industrial action in December, with a sharp pull-back in household goods retailing as a ‘bargain hunting’ pull-forward unwound. Cafes and restaurants recorded a decent gain, boosted by major sports events. Sales fell -0.3% in NSW but rose across all other states. Nationally, sales turnover was up +4.1% from the same month a year ago, but only +2.6% in NSW.

SWAP RATES HOLD
Wholesale swap rates are probably little-changed today again, but keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -1 bp at 3.75% on Tuesday. The Australian 10 year bond yield is up +13 bps at 4.42%. The China 10 year bond rate is up +1 bp at 1.76%. The NZ Government 10 year bond rate is up +14 bps at 4.68% while today's RBNZ fix was at 4.57% and up +7 bps. The UST 10yr yield is now just on 4.26% and up +14 bps from yesterday. Their 2yr is up +8 bps at 3.99%, so that positive curve is steeper and more positive at +29 bps.

EQUITIES MOSTLY LOWER
The NZX50 is down -1.0% in late Wednesday trade. The ASX200 is down -1.1% in afternoon trade. Tokyo is up +0.2% in early Wednesday trade. Hong Kong is up +1.8%, but Shanghai is down -0.1% its open. Singapore has opened up +0.1%. Wall Street ended its Tuesday session down another sharp and pessimistic -1.2%..

OIL EASES
The oil price is now under, now just on US$68/bbl in the US, and just under US$71/bbl for the international Brent price, all on expectations a coming recession will limit demand.

CARBON PRICE DIPS IN RANGE
The carbon price is still within its range, but down -50 bps at NZ$62.50/NZU on extended light volumes. The next release of units at the official auction is on March 19, 2025. But that auction's floor price is $68/NZU, so it is heading for a failure. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD FIRMS AGAIN
In early Asian trade, gold is up +US$20, now at US$2908/oz.

NZD FIRMS
The Kiwi dollar is up +50 bps at 56.6 USc. Against the Aussie we are unchanged at 90.4 AUc. Against the euro we are down -20 bps at 53.3 euro cents. This all means the TWI-5 is just over 66.3 and up +30 bps from yesterday.

BITCOIN RECOVERS
The bitcoin price is up +5.2% from this time yesterday, now at US$87,715. The 'strategic reserve' fillip was very short lived. Volatility of the past 24 hours has again been very high at just on +/- 4.1%.

This soil moisture chart is animated here.

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