What happened on Monday | interest.co.nz

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

MORTGAGE RATE CHANGES
Kiwibank and BNZ both raised their floating rate today, complementing the response from major mortgage lenders. Kiwibank also raised fixed rates. Late Friday, the Cooperative Bank also raised rates. More here. The Credit Union Police also assesses its rates.

CHANGES IN TERM DEPOSIT RATES
Kiwibank raised savings account rates and term deposit rates. The Cooperative Bank also raised time deposit rates, as did Rabobank which also raised savings account rates.

CONFIDENCE IN BRIEF, INFLATION RISE OUTDOOR
According to ANZ Business Confidence Survey, confidence plunged in early 2022. In addition to the resurgence of Omicron infections, companies are grappling with a series of headwinds, including staff and equipment shortages, as well as rising costs. These conditions compress profitability. If there is anything “positive” about this survey, it is that views on personal activity are less problematic.

LESS MORTGAGE DEBT
January mortgage debt increased by +$1.7 billion in January compared to the previous month and increased by +$30.2 billion year-on-year. But that year-over-year rise is actually the smallest in ten months. It’s still a 10% increase. The monthly increases are the lowest for a month of January since 2019.

APPETITE FOR BUSINESS LOANS IS IMPROVING
Meanwhile, appetite for corporate debt is increasing. It rose +6.1% year-on-year, a two-year high, to $123.8 billion.

CAN’T KEEP IT
After increasing by +1.8 billion in December compared to November, these same household term deposits only increased by $191 million in January. Perhaps the recent resurgence in term deposits will be short-lived?

SBS BANK PRESENTS A BOND ISSUE
SBS Bank is seeking to borrow up to $150 million through a five-year, unsecured, fixed rate senior bond offering to retail and institutional investors.

AFFIRMATIVE DIVERSITY IS IN
There was the appointment of three new members of the college of the Autorité des marchés financiers, as well as the renewal of a current director. Tokens are now important. “A range of factors, including ethnicity and age, were taken into account, with [Kendell] Flutey’s strong ties to Maori and young New Zealanders, as well as geography and knowledge, with [Steven] Bardy and [Mark] Weenink has both international experience and extensive industry knowledge. With the new board members, the gender balance on the FMA board will be five men and four women.”

PRODUCER POWER
Fonterra is noting that milk production is all major global exporting regions was down in January. For New Zealand the decline is -6.1%, Australia -1.2%, EU -0.8% and US -1.6%. This should solidify the floor when Wednesday’s dairy auction begins. Moreover, the EU and the United States export much less. (They also noted that monthly imports from China are down.)

MARKET LOSS
Fonterra suspended new sales to Russia, a market that absorbs about 1% of its product. Presumably, getting paid now is a problem.

LOW OPERATOR
Last week, the market capitalization of the NZX50 fell -1.8% to now be down -1.5% from this time a year ago. Fisher & Paykel Healthcare (FPH, #1) fell -4.1% over the week. In fact, only seven companies did not fall into this NZX50 set. The largest drop was recorded by the market operator (NZX) himself, down -16.1%, dropping him five places in the standings to 45th place. Other notable falls were by Pacific Edge (PEB#35) down -9.6%, and Kathmandu (KMD, #31), down -6.5%. The overall capitalization of the NZX50 is now $121 billion, or 35% of New Zealand’s GDP. A year ago, it was 38% of GDP.

AUSSIE RETAIL HOLDS ON
an australia, retail sales increased +1.8% in January compared to December and +6.4% more than a year ago. But these changes are “current prices”, so inflation will explain much of the rise. Online and department store activity increased the most.

EXTREME FINANCIAL STRESS
the Russian ruble just opened its doors this week. It instantly dropped -30% on top of last week’s -30% dump. It is now approaching 120 to the dollar. It is hard to imagine Russia selling its hard assets to protect the value of its currency. Why would they give up real assets for their own faltering currency?

GOLD UP
At the start of Asian trading, gold is now at US$1,909 and up +US$20 from the open this morning.

MIXED ACTIONS
The NZX50 is up a minor +0.5% in late afternoon trading. The ASX200 is up +0.7 in early afternoon trading. Tokyo opened +0.2% higher, Hong Kong was down -0.3% and Shanghai was flat. S&P500 futures suggest Wall Street will open -2.4% from its close late last week.

SWAPS ARE SLIDING TODAY
We don’t have today closing swap rate again. They are likely to have declined somewhat today across the board. The 90-day bank bill rate rose by +2 bps to 1.26%. The benchmark 10-year Australian government bond rate is down -5 basis points since this morning at 2.19%. The China Govt 10yr remains unchanged at 2.80%. The New Zealand 10-year government bond rate is now at 2.77% (down -4 basis points from this morning) and identical to the previous RBNZ patch for this 10-year rate at 2, 77% (down -4 basis points). The US government 10-year is now at 1.92%, down -5 basis points from its opening level this morning.

NZ DOLLAR DOWN
The Kiwi Dollar is down -½c from its open this morning and is back level this time on Friday, now at 66.9 USc. Against the Aussie, we are lower at 93.2 AUc. Against the euro, we are changing little at 59.8 euro cents. This means that the TWI-5 is below 71.7.


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BITCOIN LOWER
Bitcoin retreated today, now at US$37,785 and down -3.3% from the US$39,092 it opened this morning. Volatility over the past 24 hours has been high at just +/- 3.8%.

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