A review of things you need to know before you sign off on Tuesday; no retail rate changes, QSBO less pessimistic, eyes on dairy prices, eyes on RBA and Aussie mortgage stress, 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
No changes to report today.

TERM DEPOSIT/SAVINGS RATE CHANGES
None today here either.

SLIGHT IMPROVEMENT
The latest NZIER quarterly survey of business opinion shows a slight fall in pessimism, but there are still plenty of other things to worry about. BNZ said: "The RBNZ will be satisfied with the results ... In short it provides very strong evidence that inflationary pressures are abating and that we are heading towards maximum sustainable employment at an accelerating rate. All of this means talk of raising interest rates again should be extinguished (for now at least)." Kiwibank said: "The mood in the boardroom has improved. But a period of weak growth is on the horizon."

DOUR GDT RESULT EXPECTED
There is another dairy auction tomorrow morning. Analysts expect a -1% fall overall. At the WMP Pulse event last week, that key product continued to slide, recording an average price of US$3,055/tonne. That was down from the US$3,172/tonne at the prior GDT auction. So the prospects for tomorrow are not positive, especially as China's recovery seems to be misfiring.

XCEDA FINANCE ANNUAL PROFIT MORE THAN DOUBLES
March-year net profit after tax more than doubled for Xceda Finance, formerly Asset Finance, to $902,511 from $434,553. This came as total assets rose to $89.1 million from $58.9 million. Xceda's term deposits rose to $3.4 million from $2.3 million, and lending increased to $72.6 million from $51 million. Xceda's board now includes former ANZ NZ general manager of agri banking Ross Verry, and ex-Westpac NZ CFO Ian Hankins as independent directors.

SMALL BANK, HUGE PENALTY
Another small bank has been hit hard over CCCFA failings. The Commerce Commission has extracted an agreement from Kookmin Bank to refund more than $11 mln to affected borrowers in New Zealand because it "failed to ensure that it provided compliant initial disclosure about its home and personal loans between 2015 and 2021, breaching obligations under the Credit Contracts and Consumer Finance Act across nearly 500 contracts". That is an average refund of $22,000 per customer just because it didn't give the 'right' notice to its customers.

WHAT WILL THE RBA DO?
The RBA is expected to raise its 4.10% policy rate by +25 bps at 4:30 pm NZT today. But conviction levels for a rise aren't high given the RBA's penchant for not following through on its own public signals. Even if they don't raise rates, Aussie homeowners seem under increasing household budget stress. New research from Roy Morgan shows an estimated 1.43 million (28.8%) mortgage holders were ‘At Risk’ of ‘mortgage stress’ in the three months to May 2023. This period encompassed two interest rate increases of 0.25% taking official interest rates to 3.85% in May. This is the highest number of mortgage holders considered ‘At Risk’ since there were 1.46 million ‘At Risk’ in May 2008. The number of Australians ‘At Risk’ has increased by +627,000 over the last year as the RBA increased interest rates at twelve of the last thirteen-monthly meetings. Another increase today would surely pressure more households. Update: The RBA announced another pause, holding their cash rate target at 4.10%. More here.

CHINA READIES OWN GOAL
China said yesterday that it will impose new export restrictions on two materials crucial to making semiconductors and other electronic components after August 1, 2023, in an escalating technology trade standoff with the Americans. China is currently a key source for these materials, but not the only one. And actions like this play into the hands of those warning China is instinctively an unreliable trade partner. "De-risking" makes more sense when they do this sort of thing. Pressing one of the most innovative industries in the world just encourages innovation to be less reliant on China.

SWAPS ON HOLD
Wholesale swap rates are probably 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 down -1 bp to 5.69% and now +19 bps above the 5.50% OCR. The Australian 10 year bond yield is up +4 bps from this morning at 4.02% ahead of the RBA decision. The China 10 year bond rate is unchanged at 2.70%. And the NZ Government 10 year bond rate is now at 4.65%, also little-changed and which is still higher than the earlier RBNZ fix which fell -2 bps to 4.60%. The UST 10 year yield is now at 3.85% and marginally firmer than this time yesterday.

EQUITIES MIXED IN LOW VOLUMES
The S&P500 ended its shortened session on Watt Street before the holiday shutdown up a minor +0.1%. We won't hear from them again until Thursday our time. Tikyo has opened its Tuesday trade down a sharp -1.1%. Hong Kong is up +0.5%, and Shanghai is very little-changed. The ASX200 is down -0.1% in early afternoon trade. The NZX50 is up +0.1% in late trade.

GOLD FIRMS
In early Asian trade, gold is at US$1922/oz and yp +US$5 from yesterday. It closed earlier in New York also at US$1922/oz and earlier still in London at US$1929/oz.

NZD FIRMISH
The Kiwi dollar is up marginally from yesterday, now at 61.6 USc. Against the Aussie we are little-changed at 92.2 AUc. Against the euro we are minorly firmer at 56.5 euro cents. That means the TWI-5 is also up fractionally, now just touching 70.

BITCOIN RISES
The bitcoin price has risen again today and is now at US$31,257 which is up +1.7% from where we were this time yesterday. Volatility has remained modest at just on +/- 1.3%.

This soil moisture chart is animated here.

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