A review of things you need to know before you sign off on Wednesday; BNZ trims mortgage rates, dairy prices soft, home loan affordability for April, fewer tractors, swaps higher, NZD holds & 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
BNZ has trimmed rates for fixed mortgage terms of 6 to 18 months. That aligns them with ANZ and Kiwibank.

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes to report here.

DAIRY PRICES EASE
Dairy commodity prices eased -0.9% at this week’s dairy auction. Results were mixed, with increases for WMP and butter, but falls for SMP, anhydrous milkfat and cheddar cheese. NZX analysts said: "While this result may have been a bit disappointing, it’s in line with the trend we have seen over recent months, and keeps dairy commodity prices bouncing around the levels that they have been for a while. It’s unlikely to have a material effect on milk price forecasts at this time of season."

HOME LOAN AFFORDABILITY
First home buyers benefited from rising incomes in a stalled property market in April - but only slightly. Rising incomes and not interest rates nor house prices,had the biggest impact on affordability for first home buyers last month. Only four provinces were 'affordable' in April (that is, the mortgage payment was less than 40% of take-home pay). Only five towns/cities met that criteria for first home buyers who had a 10% deposit. For FHBs with a 20% deposit, there were 17 towns/cities that were affordable, out of the 28 centers we cover.

FEWER NEW TRACTORS
There were 164 new tractors registered in April, an -18% drop from the same month a year ago. But to be fair this was the average level for an April in the ten years prior to the pandemic.

WORKERS FALL SHARPLY BEHIND
In Australia, wages rose +3.7% over the 12 months to March, and growth at this rate is approaching levels the RBA will find uncomfortable without higher productivity. But growth at this rate is far lower than their inflation rate of 7.0% in the same period. (For perspective, New Zealand total hourly earnings rose +7.6% in the year to March while inflation ran at +6.7% in the same period.)

CHINA'S YOUTH PROBLEM
In China, official April data put their jobless rate at 5.2% and for those 16-24 their unemployment rate was 20.4%. (For perspective, the March New Zealand jobless rate was 3.4% and the 16-24 jobless rate here was 10.4%.) That youth unemployment rate in China is a massive problem for them. And some in Beijing are suggesting graduates that can't find work should be sent to the countryside to work as farm labourers.

MINOR BUT BETTER
Japan's economy expanded more than expected in Q1-2023. However, it only grew by +0.4% over Q4-2022. That is a +1.6% expansion (real) over the past year and was the fastest pace since Q2-2022.

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SWAP RATES RISE FURTHER
Wholesale swap rates are probably a higher again today. 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 up +1 bp at 5.65% and 40 bps above the OCR. This is an unusually large daily rise. The Australian 10 year bond yield is now at 3.46% and up +2 bps from this time yesterday. The China 10 year bond rate is little-changed at 2.73%. But the NZ Government 10 year bond rate is now at 4.27% which is up +8 bps, and back above the earlier RBNZ fix at 4.16% which is up +4 bps from yesterday. The UST 10 year yield is now at 3.53% and up +4 bps from yesterday.

EQUITIES MIXED AGAIN
The NZX50 is unchanged again today near the close. Equity markets are still awaiting Thursday's Budget, although what for isn't clear. The ASX200 is down -0.5% in afternoon trade. Tokyo has opened its Wednesday session up another +0.7%. Hong Kong is down -0.5% at their open, but Shanghai is down -0.2%. On Wall Street, the S&P500 ended its Tuesday session down -0.6% with a sharp late fall right at the close.

GOLD HOLDS
In early Asian trade, gold is down at US$1992/oz and down -US25 from this time yesterday. It closed in New York earlier at US$1989/oz, and in London at US$2007/oz.

NZD HOLDS
The Kiwi dollar is unchanged from this time yesterday at 62.5 USc. Against the Aussie we are up +¼c at 93.7 AUc. And against the euro we are up too at 57.5 euro cents. That means the TWI-5 is holding at 72.1.

BITCOIN STALLS
The bitcoin price is little-changed today, now at US$27,073 compared with US$27,022 this time yesterday and up a mere +0.2%. Volatility over the past 24 hours has stayed modest at just under +/- 1.5%.

This soil moisture chart is animated here.

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