A review of things you need to know before you go home Thursday; number of working-aged beneficiaries drops, inflation up, rents rise, NZGBs popular, housing values stratospheric, swap rates rise

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

MORTGAGE RATE CHANGES
Housing NZ Corp. has raised its rates for floating mortgages, and for 1, 2 and 5 year fixed rates.

DEPOSIT RATE CHANGES
We have updated the rates listed for Aotearoa Credit Union today.

FEWEST IN AT LEAST SEVENTEEN YEARS
MSD today reported that the total number of working-aged people on a benefit as at the end of March was 278,236. This is the lowest absolute March number since 2008 and reflects declines in all categories, except a +1.9% rise in those on a Jobseeker Support benefit from March a year ago. There is now 7.4% of the working-aged population (that is, 15-64 year olds) on a benefit of some sort. This is the lowest proportion since this data series was started in 1998.

BACK IN THE POLICY RANGE
Is inflation returning? Today's data reveals that consumer prices are +2.2% higher in March 2017 that the same month a year ago. That was more than analysts were expecting (+2.0%) and far higher than the +1.3% in December.

RENTS RISE ON HOUSING SHORTAGES
One household cost element rising is rent. Median rents are up +$50 a week over last 12 months in parts of Auckland. Rents continuing to increase sharply when supply is also increasing suggests supply is still falling well short of demand. The situation is quite different in Christchurch however where ample supply is seeing rents fall slightly.

FIGHTING TO WIN A LOWER YIELD
Even though the coverage ratio for today's $150 mln NZGB nominal 2025 bond tender was lower (but still healthy at 4.5x), those bidders did so aggressively driving down the yield to 2.89% from 3.13% last time.

FUNNY MONEY
The RBNZ has revalued the national housing stock as at December 2016 at $1.013 tln. This is +16.1% higher than it was a year ago. This is why we say New Zealand's economy is really only a housing market, with a few other bits tacked on. While GDP grew by +$13.7 bln (nominal) in 2016, the growth in housing values was ten times that at $141 bln. That comparison is at the heart of the housing distortion. We all worked hard for the GDP growth; the housing values just fell from the sky.

BIG IRRIGATION SCHEME GROWS FURTHER
Stage 2 of the Canterbury 'Central Plains Water' irrigation scheme has begun construction, which claims economic benefits of up to $374 mln. and will double the 20,000 hectares of Stage 1. An additional 1,130 jobs are expected to be created. It brings alpine water to an area that has previously used ground water. The $6.5 mln Crown loan for stage one has been repaid. Stage two gets a $65 mln Crown loan. The full scheme is expected to cost $375 mln. A parallel project to recharge local aquifers is also underway. A recent report by NZIER found that irrigation contributes $2.2 bln to the national economy and this will rise with CPW-II.

CASHING IN
Japanese trade data out today reinforces recent reports that international trade is growing strongly again. Japanese exports in the March were up +12% from the same month a year ago, and imports were up +15.8% on the same basis. These are heady rises for the world's third largest economy. There merchandise trade surplus was lower on the data. Japan is far from the Western-perception of being a zombie economy.

WHOLESALE RATES RISE
Local swaps rates have risen today across the board. They are up +3 bps for two years, up +4 bps for five years and up +4 bps for ten years. The 90 day bank bill is down -1 bp to 1.96%

NZ DOLLAR HOLDS FIRM
The NZD rose strongly after the CPI data release, but actually only making back what it lost last night. We are back to 70.3 USc. Against the AUD, we have risen a bit more to 93.7 AUc. Against the EUR we are trading at the 65.6 euro cents level. The TWI-5 is now at 75.3.

You can now see an animation of this chart. Click on it, or click here.