A review of things you need to know before you sign off on Thursday; again no retail rate changes, retail sales weak. NZGB tenders successful, alcohol consumption eases, swaps up again, NZD eases, & 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
None here again today,

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either.

BOUNCING ALONG THE BOTTOM
Q1-2-24 retail sales figures broke a run of eight consecutive quarterly falls, but overall retail volumes are still below those of last year. The Stats NZ figures show that retail sales volumes were down -2.4% on the volumes recorded for the same quarter in 2023. This as all consistent with recent retail card spending reports, and retail industry reports. Sadly there is little evidence that things are about to turn up.

MODERATELY SUCCESSFUL
Today's three NZGB tenders were moderately successful. $848 mln was bid in 65 bids for the $500 mln available that went to the 29 winning bids. Yields were generally lower that at the prior equivalent tenders.

BNZ TO GET $103M FIRSTCAPE BOOST
BNZ says the sale of BNZ Investment Services to FirstCape is expected to result in a pre-tax gain of about $103 million before transaction costs. The gain will be included in BNZ's September half-year financial results. The creation of FirstCape brings NAB's JBWere NZ and BNZ Investment Services businesses together with Jarden Wealth and Harbour Asset Management. FirstCape is owned by BNZ's parent NAB, Jarden and funds managed by private equity group Pacific Equity Partners.

WE STILL DRINK A LOT, BUT LESS
Updated data for Q1-2024 shows that we drink about 6¾ litres of alcoholic beverages per person per year (yes, a calculated average of everyone 1 day old to 101 years old). But that was -7.5% less in Q1 than the same period in 2023. For the year it is -5% less, and since its peak in early 2013 it is -13.5% less on the per capita basis.But it isn't the lowest; that was 6.4 liters per capita in 1998. So in effect, it has varied in a fairly tight range since the data started in 1985.

STRUGGLING FARMERS DON'T LIKE BANK PRESSURE
Farmers who borrowed from banks and are now finding their businesses are struggling to meet the borrowing terms or repayment schedules are unhappy that banks are calling them out. "Rural banking issues are nearing crisis point and farmers are quickly losing confidence," Federated Farmers says. Banks have not allowed borrowing exposures to rise (C5), but some borrowers (and FF) are demanding "more support". Satisfaction with banks is at its lowest point since these surveys began in 2015, but in fact 51% of those surveyed still say they are satisfied with the relationship.

JAPAN PMIs RISE
The internationally-benchmarked May S&P Global (Markit) PMI for Japan delivered its fastest expansion in nine months. Their previously shrinking factory sector rose to a minor expansion (50.5) while their service sector expansion slipped slightly (53.6).

MUSCLE FLEXING
China has suddenly launched surprise military drills surrounding Taiwan.

AUSTRALIA PMIs EASE
The internationally-benchmarked May S&P Global (Markit) PMI for Australia delivered another small contraction in the factory sector (49.6) but a good expansion in the service sector (53.1). But both levels were lower than March and April. New orders retreated in both sectors, but to be fair the reductions were slight and the least in the past three months.

OPINIONATED AI NEWS
OpenAI is paying NewsCorp for access to its right-wing news content (NZ$400 mln) so it can be used in its AI models. While the deal does not include FoxNews, it does include other out-there NewsCorp mastheads like The Australian, the New York Post, and the Sun (England), all highly curated for Fox-type news content. Strikingly these titles have had reporting integrity issues. Interestingly, the other content deal OpenAI has is with Reddit. That seems to be about it. Presumably it will purloin the content with others? (us, for example?) But perhaps some others are in the works?

SWAP RATES RISE & QUITE QUICKLY
Wholesale swap rates are likely to be firmer again today with the surprisingly hawkish RBNZ MPS motivating offshore investors to re-evaluate their positions. The US Fed minutes are also playing their part with the long end rising as well. Our chart below will record the final positions. The 90 day bank bill rate is still little-changed at 5.62%, a level it has hovered around for more than 70+ days. The Australian 10 year bond yield is up +2 bps to 4.31%. The China 10 year bond rate is now at 2.32% and little-changed. The NZ Government 10 year bond rate is up +7 bps to 4.80% from this time yesterday and the earlier RBNZ fix was at 4.75% and up +11 bps from yesterday, straddling the MPS. The UST 10yr yield is unchanged from yesterday at 4.42%. Their 2yr is now at 4.87%, so the curve has shifted out marginally to -45 bps inverted.

EQUITY MARKETS MIXED AGAIN
The NZX50 is ending today little-changed, up +0.1% after settling from yesterday's modest gain. The ASX200 is down -0.6% in afternoon trade. Tokyo is uop +0.8% in late morning trade. Hong Hong has retreated again after yesterday's bounce, now down -1.5% bounce and Shanghai is down -0.8% in early trade. Property woes still weigh. Singapore has opened up a minor +0.1%. Wall Street ended its Wednesday session down a modest -0.3%.

OIL FALLS
The oil price is -US$2 lower from this time yesterday, now just on US$77/bbl in the US, while now also now at just over US$81/bbl for the international Brent price.

GOLD RETREATS
In early Asian trade, gold has retreated -US$55 from where were yesterday, now at US$2368/oz.

NZD EASES
The Kiwi dollar has slipped -¼c to 61.1 USc today as things settle after yesterday's action. Against the Aussie we are firmer at 92.2 AUc. Against the euro we dipped to 56.4 euro cents. This all means the TWI-5 is now at 70.3.

BITCOIN EASES SLIGHTLY AGAIN
The bitcoin price has slipped slightly again, now to US$69,441 and down another -1.1% from this time yesterday. Volatility of the past 24 hours has remained modest at +/- 1.2%.

This soil moisture chart is animated here.

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