A review of things you need to know before you sign off on Wednesday; some small retail changes, big population rise, more offices to be built, tough household spending patterns, swaps stable, NZD firm, & 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
Cooperative Bank has trimmed short fixed rates.

TERM DEPOSIT/SAVINGS RATE CHANGES
Cooperative Bank has also trimmed a couple of short TD rates. WBS has trimmed ist 9 month and 18 month rates, both back to 6.00%.

POPULATION STILL RISING FAST
Statistics NZ said today that our population grew by an outsized +2.5% in the year to March 2024, an increase of 130,700 (another Dunedin in one year). It is less than the 3.0% rise in December. That takes it to 5,338,900 with the median age of 38.0 years (females of 38.9 and males 37.1 years). Fast immigration is only able to cancel the rapid aging of existing residents. A median age of 38 years is near a record high, but since it was first achieved in March 2022, it has stopped rising. To avoid a long term budget crisis because of the load boomers will place on NZ Super and health care, we need this median age to retreat somehow. Otherwise something structural in our social bargain will have to give way. In 2014 the median age was 37.5 years. in 2004 it was 35.1 years. In 1994 it was 32.2 years. Immigration has kept it from blowing out quite effectively recently but public policy is an unstable base and if the taps are turned off that day of reckoning could come much faster.

STILL WANTING TO BUILD NEW OFFICES ...
The latest building consent activity shows there is plenty of commercial building work in the pipeline - apart from for retail space. Almost 100,000 m² of new office space was consented in the March 2024 quarter, but less than 26,000 m² of new retail space.

BUT A HEAVIER DEBT LOAD
But things don't look so rosy for our largest construction firm. After a Fletcher Building update with 'few redeeming features' analysts see a risk that the company's net debt 'moves up' in the first half of the next financial year.

"DOING UP THE HOUSE? THAT CAN WAIT"
ANZ has been inspecting the entrails of retail activity from their access to the gritty bank activity details in their system, mostly card use activity. Because they are our largest bank, this analysis is especially powerful. They note growth slowed to +2.5% nominal for the year to April, which continues the downward trend in place since the borders reopened and tourist dollars flooded the terminals. Durables and clothing continue to lag as pressure is mounting on consumers’ discretionary spending. They noted that the impetus from tourism-related spending is starting to wane. And you know things aren't great when the only category gaining momentum is "miscellaneous services".

SMALL CHANGE
In Australia, the rate of gain in their wage pay slipped to 4.1% in the March quarter. That is the first time that gain rate has fallen since Q4-2020 and it may suggest labour market pressures are starting to ease there.

BIG CUT
Argentina's central bank cut its benchmark interest rate -1000 bps to 40% from 50%, marking the sixth adjustment since December due to a slowing inflation rate, bringing the rates to the lowest since June 2022. The monthly inflation rate slowed for the fourth straight month to 8.8% in April from 11% in the previous month and below market forecasts of a 9% gain.

SWAP RATES ON HOLD
Wholesale swap rates are likely to be little-changed yet again today. Our chart below will record the final positions. The 90 day bank bill rate is up +1 bp at 5.64%, a level it has hovered around for more than 70 days. The Australian 10 year bond yield is essentially unchanged at 4.37%. The China 10 year bond rate is still at 2.30%. The NZ Government 10 year bond rate is down -4 bps to 4.72% and the earlier RBNZ fix was at 4.67% and down -4 bps from yesterday. The UST 10yr yield is down -5 bps from yesterday at 4.44%. Their 2yr is now at 4.82%, so the curve is little-changed at -38 bps inverted.

EQUITY MARKETS MIXED & ONLY MOVING MINOR AMOUNTS
The NZX50 is down another -0.5% in late trade today. The ASX200 is up +0.5% in afternoon trade. Tokyo has opened its Wednesday trade up +0.4%. Hong Kong is down -2% while Shanghai is down -0.3% in very early trade today. Singapore has opened down -0.5%. Wall Street ended its Tuesday session with the S&P500 up +0.5% from yesterday. 

OIL HOLDS
The oil price is little-changed from this time yesterday, still at just under US$78.50/bbl in the US, while now at just over US$82.50/bbl for the international Brent price.

GOLD RECOVERS
In early Asian trade, gold has recovered +US$17 from this time yesterday and back at US$2360/oz.

NZD RISES
The Kiwi dollar has risen nearly +½c from this time yesterday, now at 60.5 USc. Against the Aussie we are holding at 91.1 AUc. Against the euro we are also firm at 55.9 euro cents. This all means the TWI-5 is up at 69.7, and a +30 bps gain.

BITCOIN SLIPS BACK
The bitcoin price has slipped to US$61,741 and down -1.3% from this time yesterday. Volatility of the past 24 hours has been modest at +/- 1.6%.

This soil moisture chart is animated here.

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