A review of things you need to know before you go home on Tuesday; BNZ hikes some mortgage rates, Barfoots buoyant, CoreLogic sees softness, retail sales divergent, swaps soft, NZD stable, & more

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

MORTGAGE RATE CHANGES
BNZ has raised most but not all their fixed rates, and remain competitive. More here. Resimac has raised all their fixed rates by about +50 bps.

TERM DEPOSIT RATE CHANGES
None to advise today.

GOOD SEASON FINISH
Dominant Auckland realtor Barfoot & Thompson has reported a reasonably strong March sales volume, but also growing stock levels. The say "price increases are declining".

OTHERS SEE 'VALUES STARTING TO SLIP'
Meanwhile, CoreLogic says housing market shifting in favour of buyers as average values start to slide around much of NZ, with average dwelling values starting to slip in Hamilton, Rotorua, Wellington, Christchurch and Dunedin.

NZGBs NOW IN WGBI
New Zealand Government Bonds now qualify for the World Government Bond Index, and while they may be the smallest component of that index, they offer the highest yield for a AAA/AA rating. Inclusion is an important milestone.

DAIRY PRICE GAINS UNDER THREAT
There is another dairy auction tomorrow morning and the derivatives market is expecting a small rise in WMP prices. But the NZX dairy analysts cautions this auction holds a lot of uncertainty. The market is still trying to find a new trajectory, but China’s current covid induced issues may upset the apple cart. "So, my expectations are for a flat result, potentially a small decline."

ARE WE RIGHT NOW? CLEARING UP THE AIR NZ $1.2 BLN OFFER CONFUSION. HOPEFULLY. EVENTUALLY
If you are selling something it's generally better if the seller knows what they are selling and the buyer knows what they are buying. Chaos reigned on Monday when Air New Zealand listed the 'rights' to buy shares in its $1.2 billion capital raising on NZX. The confusion appeared to stem from what was actually being sold. Specifically, what quantities.  After a flurry of NZX announcements and trading halts (of the 'rights') on Monday the market operator's regulatory arm NZ RegCo clarified matters on Tuesday morning. In essence, if Air New Zealand shareholders don't want to take up the offer they can sell their 'rights'. In this instance a single 'right' entitles the holder of this 'right' to buy TWO shares in Air New Zealand. So, no, one 'right' doesn't equal buying one share, it equates to buying TWO shares and should be priced accordingly. That's er, right. Clear now? As if raising $1.2 billion was not complicated enough... (H/T DH)

HOSPO STILL MISSING OUT BIG-TIME
Data released by Worldline (Paymark) shows that spending through Hospitality merchants increased steadily over the last four weeks of March. However, the monthly total of nearly $700 mln was still down -16% on March last year, when lockdowns were not in effect and pandemic case numbers were low. Spending in the rest of the core retail sector reached $2.9 bln in March, which is up +2.5% on last year, and up +10% on pre-COVID levels.

FINAL CALL POPULAR
The Government's penalties on ICE vehicles due to start on April 1 has delivered a bonanza for car dealers in March. They sold 21,044 vehicles are the strongest for any month of the year ever, a massive +26% more than the previous strongest in October 2018. That included an extreme surge in tradie vehicles, up +82% year-on-year. Of the 11,203 cars sold, 1,777 were pure electric vehicles, 431 PHEV’s and 496 hybrid vehicles, taking this share to 24% (boosted by a big shipment of Teslas). Passenger car sales rose +10%. The surge applied to used imports as well. A check of our charts gives a good indication of the extremes involved. Extreme buying like this will show up in worse balance of payments data for Q1-2022. The sales in March alone probably exceeded $2 bln.

BIG DEFICITS, DESPITE RECORD TAX TAKE
All this comes at a time when Government spending is rising, and rising faster than even the tax-take on individuals. The eight-month Crown Accounts revealed they operated in deficit in February, the first in three months, and despite the tax take from individuals rising +17.8% from a year ago, a new record high of $50 bln in the year to February. The twelve month OBEGAL is now an $8.2 bln deficit. The full Operating Balance is now -$11.7 bln, the highest (excluding the pandemic) since the GFC.

ASIC GOES AFTER MACQUARIE
In Australia, regulator ASIC has commenced civil penalty proceedings in their Federal Court against Macquarie Bank for failing to adequately monitor and control transactions by third parties, such as financial advisers, on their customers’ cash management accounts.

TATTERED PLAYBOOK READY FOR ACTION AGAIN
In China, the local price for iron ore has surged today, and on outsized volumes. Markets are betting Chinese regulators  are about to unleash serious stimulus from the usual playbook.

INFLATION'S SPREAD
One of the puzzles this column has raise a few times now is why Australia and some Asian countries still have low CPI inflation. Well that situation is breaking up now, with South Korea reporting CPI at a 10 year high, and the Philippines also reporting higher CPI inflation, both now over 4%.

EYES ON THE RBA
The Reserve Bank of Australia makes its monthly assessment of monetary policy settings today. All eyes will be on how they react to the recent Aussie Budget - and how they see inflation moving from here.

GOLD FIRM
In early Asian trading, gold is up +US$9 from yesterday at just on US$1929/oz.

EQUITY UPDATES
Wall Street had a good positive day with the S&P500 up +0.8% at the Monday close and rising all session. Tokyo has opened flat. Hong Kong and Shanghai are closed for a public holiday. The ASX200 is up +0.7% in early afternoon trade. The NZX50 is up +0.3% near the close.

SWAPS LITTLE CHANGED
We don't have today's closing swap rates yet. They are likely to be little-changed. The 90 day bank bill rate is down -1 bp at 1.66%. The Australian Govt ten year benchmark bond rate is down -1 bp from this morning, now at 2.82%. The China Govt 10yr is unchanged at 2.82%. And the New Zealand Govt 10 year bond rate is now marginally lower at 3.30% (down -2 bps) and still above the earlier RBNZ fix for that 10yr rate at 3.25% (down -4 bps). The US Govt ten year is now at 2.40% and a -2 bps slip since this time yesterday.

NZ DOLLAR FIRMISH
The Kiwi dollar is now at 69.5 USc marginally higher today. Against the Aussie we are little-changed at 92.2 AUc. Against the euro we are up at 63.3 euro cents. That means the TWI-5 is now at 74.8.

BITCOIN FIRM
Bitcoin is up +1.6% today from this time yesterday to now be at US$46,636. Volatility in the past 24 hours has been modest at +/- 1.9%.

This soil moisture chart is animated here.

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