A review of things you need to know before you sign off on Tuesday; some more mortgage rate increases, jobs market confidence down, credit stress still low, new mortgage levels low, swaps and NZD stable, & 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 raised its 2 year fixed home loan rate by +10 bps to 6.59%. It raised its 6 mth rate by the same amount. Resimac raised all their fixed rate by +30 bps taking their two year standard <80% LVR rate to 8.29%. Other alt-doc and different LVR rates changed similarly but to different levels.

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here today

JOBS MARKET CONFIDENCE EASES
The Westpac-MM employment confidence survey found a slipping job market confidence by employees. It fell to its lowest level in two years. The biggest change was in perceptions about current availability of jobs. This measure often provides a useful lead on the direction of the unemployment rate. While the jobs market remains tight, the unemployment rate has risen from its record lows (3.0% in December 2021 to 3.4% in March 2023), and the return of migrant workers is helping to alleviate labour shortages. Confidence in earnings growth remains subdued, as wage growth continues to be eaten up by the rising cost of living, Westpac said

INDIGESTION
The volume of homes for sale is weighing heavily on the housing market. The relationship between the realestate.co.nz listing inventory and the REINZ sales levels is unusually wide at present.

TSB CEO RESIGNS SUDDENLY. KIWIBANK DIRECTORS RETIRE
TSB chief Donna Cooper is departing from the role less than a week after the bank reported a 48% drop in profits. Separately, Kiwibank today announced that Carol Campbell and Gregg Behrens will retire as directors of Kiwibank on Friday, 30 June 2023. Kiwibank has an eight-person board.

"IT'S NOT A BAILOUT"
An additional $128 mln will be "invested" into the tertiary sector to help keep staffing levels up to mitigate the current financial problems of low enrollments. See the table in the linked story for where the extra funding is headed.

NO REAL STRESS YET
Though May 2023, the number of personal bankruptcies and No Asset Procedures recorded at MBIE remained very low. But it does look like the long-term decline has bottomed out. Partly this will be because it didn't have much further to fall. But a rise is expected from here as employment growth slows and credit conditions tighten. You might have thought this 'stress metric' would have turned higher by now, but as will many other gauges, full employment has a very stick impact of most aspect of our economy and holds it together remarkably. Jobs growth is in the tens of thousands. Personal bankruptcies and No Asset Procedures are in the dozens. Even company insolvencies that run through the ITS systems remain very low.

UNIONS CAN CAMPAIGN WITH STAFF ON FPAs BUT EMPLOYERS MUST NOT
MBIE says Fair Pay Agreement bargaining has now been approved in five industries. The regulator warns employers that they must pass on all union materials to their employees and let the union campaign. But employers must "not influence your employees’ decisions about joining a union or voting on the proposed agreement." Employers must allow union delegates access to the workplace, and they must "allow your employees to attend two 2-hour meeting in relation to the proposed FPA. If the meeting is during time that your employee would be working, you must allow them to attend on ordinary pay." Employers may only work through the MBIE-approved representatives.

NEW MORTGAGE ACTIVITY VERY LOW
The value of new home loan commitments in May was the third lowest on record for a month of May, with only May 2014 and May 2020 (during the first pandemic lockdown) recording lower values. And these values are not inflation-adjusted. May 2023 was -34% less than May 2021. Records began in August 2013. First home buyers are still propping up this market. More here. But not every commentator thinks it is downhill from here for our housing market prices.

AUSSIE INFLATION STILL BITES
An Australian Chamber of Commerce survey sponsored by Westpac says business conditions there "are approaching a stalling speed". The survey reported broadly flat new orders and employment, a decline in overtime and a slowing in output growth. The proportion of firms reporting a rise in selling prices rose to 42%, the highest reading since 1988. But with selling price increases trailing the rise in average costs, manufacturers continue to experience significant margin squeeze. The RBA has work to do to rein that imbalance in. Meanwhile, Australian company insolvencies are rising; they have been running at 650/per month in the 2022/2023 year so far, up sharply from the less than 400/month in the prior equivalent period. And they are spreading well beyond their property sector now. (ITS data in NZ averages 20 per month in 2022/23, up from 10 in the prior year.)

SWAPS SLIP SLIGHTLY
Wholesale swap rates are again ending today little-changed. 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 +19 bps above the 5.50% OCR. The Australian 10 year bond yield is down -4 bps from this morning at 3.96%. The China 10 year bond rate is little-changed at 2.72%. And the NZ Government 10 year bond rate is at 4.53% and down -1 bp from yesterday, and that is still higher than the earlier RBNZ fix which was down -1 bp to 4.47%. The UST 10 year yield is now at 3.73% and unchanged from this time yesterday.

EQUITIES MIXED
Wall Street started its week with Monday trading on the S&P500 down -0.4% in a struggle to find any direction. Tokyo has opened its Tuesday session in a negative direction, down -0.9% in morning trade so far. Hong Kong has opened the other way, up +1.5% and recovering yesterday's drop plus +0.8% more. Shanghai has opened up +0.6% in early trade. The ASX200 is up +0.6% in afternoon trade, while the NZX50 is down -0.1% near the end of today's trade.

GOLD FIRMS
In early Asian trade, gold is at US$1929/oz and up +US$4 from yesterday. Earlier it closed in New York at US$1923/oz and earlier still it closed in London also at US$1923/oz.

NZD FIRMER
The Kiwi dollar is up again from this time yesterday and now at 61.8 USc. Against the Aussie we are marginally softer at 92.1 AUc. Against the euro we are firmer at 56.6 euro cents. But none of these moves are significant. That means the TWI-5 is up marginally to 70.2.

BITCOIN SLIGHTLY FIRMER
The bitcoin price has risen slightly today and is now at US$30,377 which is up +0.6% from where we opened this morning. Volatility has been modest at +/- 1.2%.

This soil moisture chart is animated here.

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