A review of things you need to know before you sign off on Friday; retail rates rise & fall, PMI still contracting, tourist arrivals shift to India & China, inflation expectations reduce, swaps down, NZD eases, & more

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

MORTGAGE RATE CHANGES
ANZ has trimmed their 6 month and 1 year fixed rates by -4 bps and -9 bps respectively, taking their one year rate down to 6.74%.

TERM DEPOSIT/SAVINGS RATE CHANGES
TSB has launched a 6% one year TD offer. See here. Kiwibank has raised rates to nine months. It's new six month rate is 5.45%. and 5.50% for nine months. BNZ has raised most rates to 18 months but cut them from three years and longer. BNZ's six month rate is now 5.50% and their 1 year rate 5.70%.

UNDERWHELMING
The manufacturing sector experienced another decline in activity during April, according to the latest BNZ-BusinessNZ PMI. That is less-worse than in March and that is about the best you can say about this survey. But remember, the March services sector expanded at a good rate. The April services PSI will come out on early next week.

SLOWING? OR SEASONAL?
There was a significant decline in the number of people arriving in the country on work visas in April. The latest figures from MBIE show 15,873 people arrived in NZ on work visas in April, down by -22% compared to the 20,442 that arrived in March. That brought an end to the steady increase in overseas workers arriving since March last year.

EASING OFF?
The RBNZ's latest survey M14 showed that expectations for inflation over the next few years have dropped back as actual inflation has started to ease (See the note on petrol prices below.) More here.

SLASH REPORT COMPLETED
The Report of the Ministerial Inquiry into woody debris (including forestry slash) and sediment in Tairāwhiti/Gisborne and Wairoa has today been presented to the two lead ministers, David Parker and Peeni Henare. “The impact of slash on the East Coast communities has been devastating. More than 10,000 Tairāwhiti people petitioned for land use to be better managed. This report responds to that call,” Parker said. Federated Farmers wants the Government to move quickly to implement it, unlike the last report on the same matter.

MORE 5G ROLLOUT TO REGIONAL TOWNS
The Government has struck deals with the three major telecom network operators – Spark, 2Degrees and One New Zealand – which will deliver a faster roll-out of 5G services to around 55 rural and regional towns and provide mobile wireless coverage to further rural black spot areas.

SURVEY CONFIRMS SURVEYERS VIEWS
Lobby group Consumer NZ says a survey they ran found that trust in banks is dipping, with 39% of those surveyed stating they do not trust banks. This is the highest level of distrust since Consumer began tracking sentiment in June 2021. They also say banking customers are also expressing frustration with how much they are being charged in bank fees.

CHINA & INDIA TOURISTS START TO ARRIVE AGAIN
Foreign tourist arrivals rebounded to 69% of pre-pandemic (2019) levels in February, arresting the drop-off in the recovery over the past two months. The lift was supported by an improving recovery across selected Asian markets. Arrivals from India surged to 136% of pre-pandemic levels in March, and the recovery of arrivals from China lifted from 8% of pre-pandemic levels in February to 17% in March. Similarly, Hong Kong tourist arrivals lifted from 18% of pre-pandemic levels in February to 50%. The recovery in Australian tourist arrivals remained fairly stagnant, lifting one percentage point from February to 78% of pre-pandemic levels. H/T Infometrics

CARBON PRICE SINKS FURTHER
The NZ carbon price has sunk to $52.50/NZU today, its lowest since September 2021, a twenty month low.

BIG MOVEMENTS IN THE RBNZ SETTLEMENT ACCOUNTS
The April Settlement Accounts at the RBNZ show the the Crown balance halved in the month going from $35.8 bln to just $17.4 bln. But going the other way, the banks' accounts with the RBNZ rose from $45.8 bln in March to $54.7 bln in April. That is close to the record high balance of $56.4 bln in December 2022. These balances earn interest at the OCR of 5.25% pa. (But banks could choose to invest these balances elsewhere like the Sovereign bond market if they wished although it seems unlikely the interest yield earned would be quite as high.)

SAME AS FIVE YEARS AGO
The falling crude oil price is being broadly matched at the pump. Basically pump prices are now back to September 2021 levels, levels we first experienced in October 2018. The year-on-year fall in petrol prices is substantial and will help reduce the inflation rate.

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SWAP RATES SOFT AGAIN
Wholesale swap rates are probably a softer yet again today on international influences. However, the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is down -1 bp at 5.60% and 35 bps above the OCR. The Australian 10 year bond yield is now at 3.32% and down a chunky -10 bps from this time yesterday. The China 10 year bond rate is up +2 bps at 2.73%. And the NZ Government 10 year bond rate is now at 4.06% which is also down -10 bps from yesterday, and now lower than the earlier RBNZ fix at 4.08% which down -4 bps from yesterday. The UST 10 year yield is now at 3.38% and down another -5 bps from this time yesterday.

EQUITIES LOWER EXCEPT TOKYO
In New York, Wall Street ended down -0.2% on the S&P500 in its Thursday trade. Tokyo has opened up +0.8% in its Friday trade. Hong Kong is down -0.4% today in early trade. Shanghai has opened down -0.5% today. The ASX200 is down -0.2% in afternoon trade and that is matched by the NZX50 in late trade today.

GOLD DOWN
In early Asian trade, gold is down at US$2010/oz and down -US$22 from where we were this time yesterday. That is below the earlier New York close of US$2015/oz and below the earlier London close of US$2016/oz.

NZD FALLS BACK
The Kiwi dollar is down almost -1c from this time yesterday at 62.8 USc. Against the Aussie we are nearly -½c softer at 93.7 AUc. And against the euro we are down -½c at 57.5 euro cents. That means the TWI-5 is now down to 70.7 and back where it was a week ago.

BITCOIN DROPS
The bitcoin price is down sharply today, now at US$26,615 US$27,548 and down 3.4%. Volatility over the past 24 hours has been moderate at +/- 2.0%.

This soil moisture chart is animated here.

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