A review of things you need to know before you sign off on Tuesday; BNZ falls into line, housing data 'cold', retail slump extends, population mix changes fast, passports issued slow, swaps & NZD on hold, & 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/LOAN RATE CHANGES
BNZ joined the others today and cut short home loan fixed rates. We looked at what future rates would have to fall to, to make a one year rate option better than the current three year option. Details here. SBS Bank has also trimmed its one year fixed rate to 7.14%, and shifted its FirstHome Combo one year fixed rate down to 6.14%.

TERM DEPOSIT/SAVINGS RATE CHANGES
NBS/Nelson Building Society trimmed some rates today.

A COLD WINTER
REINZ figures show house prices declining in most parts of the country in April. Their HPI dropped in 10 out of 12 regions last month. The stock of properties for sale reached a new eight-year high in March and edged up further in April. Some observers think the multi-decade high in population growth and policy changes to support investor demand will put a floor under the falls. But that also assumes home loan interest rates will retreat in a way that relieves household budgets. You are on your own with that assumption.

COLD WINTER CONFIRMED
QV says average housing values have started declining, not just for those coming to market. High interest rates, a difficult economy and a surplus of listings spell trouble for the housing market over winter, they say.

RETAIL SLUMP INTENSIFIES
The retail spending slump intensified in April, with total retail spending -3.8% down on last year's figures, and that is before accounting for 4.0% inflation in the same period. The figures show that retail card spending fell for the third consecutive month on a seasonally adjusted basis in April.

'MIXED MESSAGES'
ANZ's truckometer tracking isn't showing any new risks in April. And it may be slightly more positive than you might have assumed. They say the demand indicators based on light traffic volumes are still very mildly upward sloping despite strong population growth of around 3%, and the decline in per capita terms is stabilising. Heavy traffic data (mostly trucks) tends to provide a good steer on production GDP in real time, as it captures both goods production (including agriculture) and freight associated with both wholesale and retail trade. It suggests positive GDP growth in Q1. The heavy traffic index is 3.3% higher than a year ago(using a 3-month average to smooth out volatility), while light traffic is up 2.2%.

POPULATION MIX CHANGES FAST
In the year to March, +238,964 migrants arrived in the country (Auckland's North Shore, or Wellington City ?), with -78,000 citizens leaving permanently (Rotorua ?). Overall the period saw a net migration gain of +111,000 in the year (Lower Hutt ?).  (For perspective, the net annual migration gain in 2023 was just under +1 mln in the USA, a country 64 times larger than ours.)

AI IS DEVELOPING AT WARP-SPEED
OpenAI has launched an all-singing and talking, but not yet all-dancing, GPT-4o. It's a large language model featuring blindingly fast new text, audio and image capabilities.

ALLOW TEN WEEKS, PLUS DELIVERY
The Passport Office/DIA says allow ten weeks "plus delivery" to get a new passport at this time. That is because it has installed a "new system" that promised "increased efficiency". It claims the new system is improving although the transition is way more problematic than expected. They see improvement in three months. "We are targeting over 90% being issued within two weeks by the end of August." (Maybe emigration would be higher if it was easier to get a passport? Just asking for a friend.)

UP, BUT NOT BY MUCH
Japanese producer prices are shifting higher but only marginally. They were up +0.9% April from a year ago as was expected. It was their 39th straight month of increase and the highest producer inflation since last October. But that only reinforces how tame the pressure really is.

BETTER THAN EXPECTED
All eyes are on the Australian Federal Budget today where a +AU$9 bln surplus is expected to be unveiled. In last year's budget they foresaw at 2023/24 +AU$4.2 bln surplus, so this will be good improvement. (see page 7.) Future deficits forecasts keep getting reduced, so they are in an unusual period of doing better than forecast. The actual release is at 9;30pm NZT.

SWAP RATES ON HOLD
Wholesale swap rates are likely to be little-changed today. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 5.63%, a level it has hovered around for more than 70 days. The Australian 10 year bond yield is unchanged at 4.38%. The China 10 year bond rate is down -1 bp at 2.30%. The NZ Government 10 year bond rate is down -5 bps to 4.76% and the earlier RBNZ fix was at 4.71% and down -4 bps from yesterday. The UST 10yr yield is unchanged from yesterday at 4.49%. Their 2yr is now at 4.86%, so the curve is little-changed at -37 bps inverted.

EQUITY MARKETS TIMID
The NZX50 is down another -0.3% in later trade today. The ASX200 is also down -0.3% in afternoon trade. Tokyo has opened its Tuesday trade up +0.2%. Hong Kong is up +0.3% while Shanghai is down -0.2% in very early trade today. Singapore has opened unchanged. Wall Street ended its Monday session with the S&P500 also essentially unchanged from its Friday close. Markets seem to be in abeyance awaiting the US CPI data on Thursday morning (NZT) but analysts don't expect much change with the April headline rate to be 3.4% (vs 3.5% in March).

OIL MOVES UP
The oil price is +US$1 higher that at this time yesterday, at just over US$78.50/bbl in the US, while now at just on US$83/bbl for the international Brent price.

GOLD DROOPS
In early Asian trade, gold is down -US$17 from this time yesterday at US$2343/oz.

NZD HOLDS
The Kiwi dollar has hardly changed from this time yesterday, still at just at 60.1 USc. Against the Aussie we are holding at 91.1 AUc. Against the euro we are also unchanged at 55.8 euro cents. This all means the TWI-5 is still about 69.4, and of course unchanged as well.

BITCOIN RISES
The bitcoin price has risen to US$62,583 and up +2.0% from this time yesterday. Volatility of the past 24 hours has been moderate at on +/- 2.2%.

This soil moisture chart is animated here.

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