A review of things you need to know before you sign off on Friday; some more home loan changes, rents up, confidence low, LVRs loosened, log prices sag, swaps hold, NZD dips, & 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
SBS Bank have raised their floating rate to 8.49%, a +25 bps increase. Their reverse equity rate however is raised by +50 bps to 9.50% (and matching Heartland Bank's existing reverse equity rate of 9.50% which hasn't been changed yet). NZCU Auckland raised its floating rate from 7.70% to 8.55%, a bit of catchup here.

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes at this time.

THE MAY RESIDENTIAL RENT REPORT
Median rents are up by +$15 a week in 12 months to March nationally, now at $565/week ($29,380/year). Auckland is unchanged from a year ago at $600/week ($31,200/year) while the median rent in Queenstown-Lakes is up by +$110/week for the year to $700/week or $36,400/year. The full Rent Report is here and it includes all cities, towns and provinces. The lowest median rents are in Timaru and Invercargill at $400/week ($20,800/year).

GRIM CONSUMERS SEE LESS INFLATION AHEAD
The latest ANZ-Roy Morgan consumer confidence poll for May was basically flat at 79.2 index points, an extremely low level. The proportion of people who believe it is a good time to buy a major household item, a key retail indicator, fell 3 points to ‑34 and while this is low, it is actually little-changed from November when it fell back to this general level. However, inflation expectations eased from 5.2% to 4.8%. That’s only the second time since mid-2021 that they’ve dipped under the 5% mark.

S&P DARK ON BNZ's PREF SHARE ISSUE
Ratings agency S&P don't particularly like the upcoming BNZ perpetual preference share issue. They rate them BBB which is five notches below BNZ's AA- long-term issuer credit rating. They say this reflects a one notch penalty for the subordinated status of the issue, another two notches for the risk of partial or untimely payment, and yet another two notches for their expectation that government is unlikely to support perpetual preference shares.

FEWER LVR RESTRICTIONS
The RBNZ has confirmed some loosening of low equity mortgage lending restrictions. Banks will be allowed to do a bit more high LVR lending from June 1.

NZME FINED FOR SELLING DANGEROUS TOYS
The Commerce Commission reported that NZME Advisory (which tradede as GrabOne) has been fined in the Auckland District Court yesterday for supplying unsafe magnetic puzzle toys, commonly known as buckyballs, which breached product safety laws and caused harm to a child in 2021. NZME sold GrabOne in October 2021.

LOG PRICES SAG
Log exports to China are quite soft and prices for logs are falling. Log demand in China has been steady, but market forecasts of an increase in construction activity have not eventuated and an increase is now less likely as China enters its hotter months of June-August when construction activity traditionally reduces.

AUSSIE RETAIL STRUGGLING
Australian retail sales didn't change in April from March and were +4.2% higher than year-ago levels. That means in volume terms they will be lower because Australian inflation is running at 6.3%. (Their April CPI will be released on Wednesday.)

BARRED FROM $0.5 BLN OF WORK
And staying in Australia, PwC's woes just get worse as more details are revealed about its behaviour relating to confidential tax advice and breaches. It is having international implications. They are now effectively shut out of future Australian government contracts, deals that have been hugely lucrative for them. PwC had secured more than AU$0.5 bln in Australian federal government contracts during the past two years. New rules that bar firms from bidding for work who have breached confidentiality means they will no longer be in that trough. (Although the partnership is separate in New Zealand, you have to wonder how that reputation dump will affect their work here.)

SOLAR POWER KNOCKS OIL INTO SECOND PLACE
The IEA says global investment in clean energy is on course to rise to US$1.7 tln in 2023, with solar generation set to eclipse oil production for the first time.

SWAP RATES TURN UP AGAIN
Wholesale swap rates are likely up only minorly. 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 unchanged at 5.69% and holding yesterday's huge downward correction. The Australian 10 year bond yield is now at 3.76% and up another +7 bps from this time yesterday. The China 10 year bond rate is little-changed at 2.73%. And the NZ Government 10 year bond rate is still at 4.45% and up only +1 bp, and still above the earlier RBNZ fix at 4.42% which is up +2 bps from yesterday. The UST 10 year yield is now at 3.82% and up another +7 bps from this time yesterday. A week ago it was at 3.65%. The US debt negotiation standoff is costing everyone real money.

EQUITIES MIXED
In New York, the S&P500 ended its day up +0.9% on Wall Street as markets are a deal is close on the debt limit. Tokyo has opened its Friday session up another +1.0%. But Hong Kong is closed for a public holiday. But Shanghai is down another -0.6% in early trade today, compounding the week's fall so far to just under -3%. The ASX200 is little-changed in afternoon trade today but might end the week -1.9% lower. The NZX50 is down -0.9% in late trade and heading for a weekly loss of -2.0%.

GOLD SLIDES AGAIN
In early Asian trade, gold is down to US$1946/oz and down another -US$11 from this time yesterday. Earlier the gold price closed at US$1941/oz in New York, and earlier still at US$1948/oz in London.

NZD DIPS FURTHER
The Kiwi dollar has dipped from this time yesterday to 60.7 USc. Against the Aussie we are off slightly at 93.2 AUc. And against the euro we are soft at 56.5 euro cents. That means the TWI-5 is down -20 bps at 69.7.

BITCOIN HOLDS
The bitcoin price is marginally firmer today, now at US$26,430 and recovering +1.3% from this time yesterday. Volatility over the past 24 hours has been low at just under +/- 1.0%.

This soil moisture chart is animated here.

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