Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
Heartland Bank cut its variable rate by -24 bps today. Nelson Building Society cut its variable rate, and its two year fixed rate. Update: ANZ has cut three key fixed rates. Details here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Rabobank trimmed its savings account rates by -25 bps. Heartland cut theirs by -25 bps or -30 bps. Update: ANZ has cut all its term deposit rates. Details here. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
THE DCS IS ALMOST HERE
We have a detailed explainer about the Deposit Compensation Scheme (DCS) with comes into force on July 1, 2025, just 80 days from today, and well within the expiry date of most term deposits.
RECENT UPTURN
There was a strong upturn in migration numbers in February, but the annual totals are still weaker. The February net migration gain of +29.3% year-on-year, contrasts with an annual loss of -44,055 NZ citizens leaving on a net basis.
HOLDING IT'S OWN
Visitors arrivals were little-changed in February from January, but that masked some notable changes in flows from both China and the US. The flows from China were affected by the timing of the Chinese New Year holiday with it coming in January this year vs February last year. That brought a -48% drop in February compared to a year ago, a decrease of -18,000 to 19,400. There were 63,729 tourism arrivals from the United States in February, the strongest month on record, and up +8,200 or +15%. Arrivals into the South Island were rising, but soft into the North Island even if by far the most visitors arrive via Auckland Airport still.
RETAIL WEAKER
Retail spending was much weaker than expected in March, falling by -0.8%. Analysts had expected a modest +0.2% rise, in line with earlier trends. March’s fall in retail spending was widespread across discretionary spending categories. Spending on durable items like household furnishings was down nearly -3% in March, hospitality was down -1%, and spending on apparel purchases fell -2%. The softness in spending was notable as fuel prices fell over the month, which should have helped to support spending in other areas.
SERVICE SECTOR SOFT
The local services sector is "stable but soft", still contracting. The toughest service sector conditions are in Auckland. New orders are the weakest part of this. New Zealand is a bit of an outlier, because most major economies are experiencing good services sector expansions.
BASIC OPTION
Westpac has launched a basic transactional bank account with limited functionality (still called a pilot) for those who need access to the banking system but find it hard to achieve because of their tough circumstances. This is part of a push by both the RBNZ for "financial inclusion", and a core recommendation of the Commerce Commission’s Market Study into Personal Banking Services.
MINIMAL COST PRESSURE
The pace of supplier cost increases to Foodstuffs supermarkets rose slightly in March, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index showing an average +2.0% increase in what suppliers charged in March, compared to a year earlier. In March 2024 this index rose +3.2%.
NZX UPDATE
As at 3pm, the overall NZX50 index is leading other markets up, gaining +1.2% so far today. That means it is up +3.3% for the past week, but down -6.9% since the start of the year, and up +2.0% from this time last year. Infratil, Ryman, The Warehouse and Investore lead the gainers to the start the week, offset by declines for Vista Group, Serko, Mainfreight, and Turner's
A DECISION AT LAST
The policy guiding future land use decisions has been approved by Auckland Council's Policy and Planning Committee. The 1,200 properties with high-risk homes exposed by the early 2023 storms are expected to be purchased by the end of 2025, making this one of the largest land acquisition programs undertaken in Auckland.
POLICY HOLD, BUT EXPANSION TARGET LOWER
Singapore reviewed its main monetary policy tool, the S$NEER, and eased them ever-so-slightly by slowing the rate of appreciation in its currency. It uses the exchange rate as its main policy tool rather than interest rates. At the same time, trade turmoil has seen them downgrade its 2025 growth forecast to 0-2% from a previous 1-3%.
FERTILISER COST THREAT
Although urea prices are up a third since mid 2024, they remain far lower than levels apoplying in 2021 and 2022. But the outlook is not especially bright for farmers who buy this natural-gas based fertiliser. Urea-based product accounted for about 30% of all fertiliser here. Rabobank analysts see looming supply shortages and expect outsized volatility in prices. Natural gas prices are up 80% over the past year and competition for supply as coal and oil users 'transition' to gas will keep demand very elevated.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed at the short end today. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged at 3.48% on Friday. The Australian 10 year bond yield is up +5 bps at 4.41%. The China 10 year bond rate is up +2 bps at 1.67%. The NZ Government 10 year bond rate is up +4 bps at 4.82% from this morning's pen while today's RBNZ fix was at 4.81% and up +8 bps from Friday. The UST 10yr yield is now just on 4.47% and down -3 bps from this morning. Their 2yr is down -3 bps at 3.94%, so that positive curve is now less at +53 bps.
EQUITIES RECOVER
The NZX50 is up +1.2% in late Monday trade but not quite making back Friday's fall. The ASX200 is up +1.4% in afternoon trade. Tokyo has opened up +1.6% in early Monday trade. Hong Kong is up +2.7%, while Shanghai is up +0.9% at its open. Singapore has opened up +2.0% to recover Frida's loss. On Wall Street, the S&P500 futures are indicating Monday will open up +1.5%.
OIL DIPS SLIGHTLY
The oil price is down --50 USc from this morning and now just over US$61/bbl in the US, and just on US$64.50/bbl for the international Brent price.
CARBON PRICE DIPS FURTHER
The carbon price is -50c lower today, now at NZ$54/NZU. The next official carbon auction is on Wednesday, June 18, with a $68 floor price. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD HOLDS HIGH
In early Asian trade, gold is down -US$2 from this time morning, now at US$3234/oz and still near its record high.
NZD FIRMS FURTHER
The Kiwi dollar is up +20 bps from this morning, now at 58.5 USc as the greenback eases further. Against the Aussie we are unchanged from this morning at 92.8 AUc. Against the euro we are up +10 bps at 51.4 euro cents. This all means the TWI-5 is up at 67 and a +10 bps rise from this morning's open.
BITCOIN HOLDS
The bitcoin price is up +0.6% from this this morning, now at US$85,272. Volatility of the past 24 hours has been modest at just on +/- 1.4%.
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