A review of things you need to know before you go home on Thursday; ANZ raises a key mortgage rate, some TD rises too, NZ economy growth slows, Aussie jobless rise, wildly popular bond issue, swaps slump, NZD rises

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

MORTGAGE RATE CHANGES
ANZ has increased its one year 'special' by +10 bps to 4.49%. This is still better than their key rivals which are all at 4.59% for a one year fixed term.

DEPOSIT RATE CHANGES
NZCU increased their 18 month rate by +10 bps. The Nelson Building Society raised rates for 1, 2 and 3 years.

AN UNPLEASANT SURPRISE
NZ's economy grew only +0.4% 'real' in December quarter and that was way below the market pick of +0.7% 'real' and even the RBNZ's forecast of +1.0% 'real'. Year-on-year the growth was down to +2.7% pa (from +3.3% in the year to September). Stats NZ says only half of 16 industry categories recorded growth. A key element: weak exports. Adding to the head-scratching of the professional observers was that those September figures were revised down sharply. (By the way, only BNZ's economists - those led by Stephen Toplis - picked this result.) (Also, for perspective, Australia grew +2.4% in the same period.) The takeaway for the RBNZ may be that inflation's return might be a bit later here than they thought.

NOT WHAT THEY NEED
And there were disappointments across the ditch as well. Today's release of jobs data showed a shrinkage of -6.4K jobs when a rise of +16.0K was expected. It was the drying up of part time jobs that led this; somewhat unexpcted was a rise in full-time jobs. Overall, their unemployment rate ticked up to 5.9% from 5.7%. Today's data has probably quelled any RBA rate hike plans for a while yet.

NO TO TRUMP (AND RUSSIA, AND TURKEY)
The results of the Dutch election are in. The anti-Islam populist Geert Wilders star has fizzled. Not because he won less seats - he actually won two more - but because those of a much more liberal persuasion won many more, up +19 seats. It seems Trump-ism doesn't work in Holland, despite the provocations of Turkey's President. The next test is in France, with election slated their in two rounds on April 23 and May 7.

WILDLY POPULAR INVESTOR RUSH FOR 3.15%
Today's NZ Govt bond tender #597 for 2025s was where everyone wanted to be today. The $100 mln on offer attracted more than $1.4 bln in bids a spectacular 7.1x coverage ratio. The average weighted accepted yield decreased slightly to 3.13% from 3.23%.

IN THE REST OF THE WORLD ...
Aussie energy policy just got even more political and nasty with South Australia and Canberra bickering over 'blame'. In the US a Federal Court (this one in Hawaii) has blocked the Trump Administration's latest visa ban just one day before it was due to come into force. And in Canada, their realtors reported that the average price is now C$519,500 (NZ$560,000) and continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canada's tightest, most active and expensive housing markets. And back in Australia, BNZ's owner, the Andrew Thorburn led NAB has hiked mortgage rates across its lending book, out of cycle to any official move, blaming “increasing regulation and elevated funding costs”. The bank’s variable rate for owner-occupier customers will rise from 5.25% to 5.32%. Investor loans will increase from 5.55% to 5.80%.

WHOLESALE RATES SLUMP
Locally we got sharp falls and a flattening of wholesale rates today, triggered by the 'disappointing' US Fed outlook with its rate hike decision. The two year is down -4 bps, the five year is down -8 bps and the ten year is down -9 bps. These are large movements. Even the 90 day bank bill rate is on hold at 1.97%. During today, the UST 10yr yield has slumped to 2.49% which is driving our wholesale rates down. In fact, we have just had the largest two day fall since September 2015 when markets also had a reaction to a Fed statement. The local mood has not been helped by the weaker-than-expected Q4-2016 GDP result.

NZ DOLLAR STRUGGLES TO MAKE SENSE OF THE DATA
The NZD rose +40 bps after the US Fed statement, and fell an equivalent amount after the NZ GDP announcement. Then it gained all that back, after settling a net +20 bps higher on the day. Now it is holding at 70.2 USc. On the cross rates we are at 91.2 AUc, and at 65.4 euro cents. The TWI-5 index is now at 75.3.

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