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
No changes so far today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
There are none to report today either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
THE FINTECH CROWD GROWS
Yet another fintech has launched today, trying to attract savings with promises of a higher interest rate - and an attractively designed app. Wedge Money is offering 4.0% in a call account, earned by them reinvesting in "professionally managed, low-risk investment funds". Their trust account is held at BNZ. The 4.0% they offer is higher than any of the other similar accounts from the fintechs we follow.
A FURTHER CONTRACTION, STILL UNDERWATER
The services sector again contracted slightly in the last month and is 'a long way from being back to full health', according to the BNZ-BusinessNZ PSI for April.
PRODUCER COSTS RISE FASTER THAN PRICES
Worse, there was a worrying is in Q1-2025 producer prices, evidence that inflation is stirring again. First, producer input costs were up +5.3% in 2025 from the same quarter in 2024. This was their fastest pace of increase since the GFC, apart from the pandemic disruption. Output costs rose +4.7% on the same basis. So that means producers were worse off by a net -0.6% overall.
SWINGS EQUAL ROUNDABOUTS
But on the farm, the net inflationary pressures are remaining very low, as they have done for more than a year now. For all farms, these costs are down -0.6% from a year ago. Some costs are rising fast still, like electricity which was up +6.8% in the year, freight was up +7.1%, and local and central government rates and fees by +10.0%. But they are all essentially offset by large fall in interest costs -14.9% and some others like fuel down -3.1% week & pest control -4.3%. For sheep & beef farms, the annual dip was -0.7% but for dairy farms they had a -1.4% decrease because the debt levels fell faster allowing an even larger fall in interest costs. Horticulture experienced a +0.8% increase.
TWELVE YEAR LOW
The price pressure on new capital goods remained low, up +1.6% in March from a year ago. And that was the smallest increase since the end of 2013.
NZX DIPS FURTHER
As at 3pm, the overall NZX50 index is lower again, so far today, down -0.7%. That means it is up just +0.2% for the past week, down -2.8% since the start of the year, and up +8.2% from this time last year. There are 38 gainers, led by NZX, Meridian, Mercury and Oceania. There are 48 decliners led by The Warehouse, Vulcan Steel, Fletcher and a2 Milk.
MORE FRAUD EXPOSED
An Auckland man who tried to fraudulently claim millions of dollars through the Covid-19 wage subsidy scheme (WSS) and other government support schemes has been found guilty following a trial on charges brought by the SFO. Hun Min Im faced 91 charges related to his attempts to claim $1.88 million from the WSS, as well as from the Small Business Cashflow Scheme, COVID-19 Support Payments and Resurgence Support Payments. In total he attempted to claim $2.3 million and received almost $624,000.
SOME CHINA DATA SHOWS RESILIENCE
China's retail sales increased by +5.1% in April from the same month a year ago, moderating from March's over 1-year high of +5.9% and missing market estimates of +5.5%. But is was one of the still-good data releases from China today, one that is in a rising trend and even better because they have virtually no inflation.
SOME CHINA DATA HARD TO BELIEVE
Another positive data release from China came from their industrial production which grew by a claimed +6.1% in April from a year ago and better than the expected +5.5% gain. However, the latest figure eased from the +7.7% growth recorded in March. Meanwhile, electricity production rose only +0.9% in April, hardly supporting the much stronger industrial output claim. It seems very unlikely they had that sort of sudden energy efficiency.
SOME CHINA DATA STILL VERY WEAK
Meanwhile their national real estate development investment fell sharply yet again, and the residential sector was down -9.6% from April last year. And prices for new, and previously-owned housing is still down sharply on a year-on-year basis even if there are small pockets of regional improvements.
SWAP RATES HOLD
Wholesale swap rates may be little-changed at the short end again today but the swap curve is steepening. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -2 bp at 3.34% on Friday. The Australian 10 year bond yield is up +5 bps at 4.56%. The China 10 year bond rate is up +2 bps at 1.68%. The NZ Government 10 year bond rate is up +9 bps at 4.70% and was up +7 bps to 4.56% in the earlier RBNZ fix today from yesterday. The UST 10yr yield is on 4.51%, up +7 bps.
EQUITIES EASE
The NZX50 is down -0.7% today, and the ASX200 is down -0.2% in afternoon trade. Tokyo is down -0.4 in early Monday trade. Hong Kong has dropped -0.4% while Shanghai is down -0.1%. Singapore has opened down -0.2%. The futures market suggests Wall Street will open -0.5% lower on the S&P500 tomorrow.
OIL UNCHANGED
The oil price is essentially unchanged just on US$62.50/bbl in the US, and just on US$65.50/bbl for the international Brent price.
CARBON PRICE HOLDS
The carbon price softened today but only slightly, down -20c to NZ$55.50/NZU on lowish volumes. The next official carbon auction is on Wednesday, June 18, with a $68 floor price. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD FIRMS
In early Asian trade, gold is higher, up +US$26/oz from this morning at US$3226/oz.
NZD HOLDS
The Kiwi dollar is up +10 bps from this morning, now at 58.9 USc. Against the Aussie we are up +10 bps at 91.9 AUc. Against the euro we are unchanged at 52.7 euro cents. This all means the TWI-5 is now at 67.5 and unchanged.
BITCOIN STILL IN A YOYO RISE
The bitcoin price is at US$104,617 and down -0.7% from this morning. Volatility has remained modest at +/- 1.7%.
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19 Comments
So there's a deal for hundreds of billions of dollars between the US and Saudi Arabia.
The best deal so far, and it's guns and fossil fuels, with one of the world's only autocratic monarchs.
GDP is up. Is that good?
The Saudis are killers. No doubt about that.But they are hardly a unique example of that in the region. Until in the interests of oil some lines were crayoned onto a map the various nomadic tribal forces ranged great distances with little thought to any boundary, to inflict vengeance arising from customs and vendettas dating back to well before the interference of the Crusades. Now travellers may transit by the daily thousands through such as Dubai, but underneath it all, that old history is not forgotten by the historical players. Trump obviously is not one to conduct matters here from a high horse and is following the money.
It's a Faustian bargain.
The House of Saud needs to supply cheap living to an ever-growing populace. Beyond fossil peak, they're in strife.
And he 'money' they got for their oil, is in stuff which won't be worth what it is, post oil. Alle same Norway, largely.
And the US needs - despite the rhetoric - the oil.
https://www.gem.wiki/Ghawar_Oil_and_Gas_Project_(Saudi_Arabia)
Go to the 'production yoy graph - it peaked in 1980, and the trend is inexorable. So the House of Saud is in trouble, as is the rest of the world because that was about the last 'swing producer'. That's why Trump was there, same as Bush Senior before him.
Generally agree FG, though the speed at which both Dubai and Abu Dhabi are maturing shouldn’t be underestimated. Saudi changing very rapidly now too, though has much further to go
To fall.
Modernity was temporary, courtesy of large dollops of once-off surplus energy.
Those cities are gone-burgers.
As Lord Curzon gloated post WW1 - we sailed to victory on a sea of oil. That totally did it. Up until then the regional interest was left to archeologists, anthropologists, adventurers and romantic poets such as Richard Burton. The transformation to today has been in only 100 years or so, a mere speck in the storied history of the Middle East and North Africa. Yes, as some American Airlines expressed to us in transit, Emirates can afford to fly an A380 into Chicago with only eighty passengers only because the government owns the fuel to fly the planes they too own. Easy come, easy go.
And Gertrude Bell.
Great book, less great movie.
And Seven Pillars, of course. \
And Adventure in Oil (Longhurst)
Got them all... the one I want is 'In Aleppo Once' - but it tends to be too expensive. Has an Arthur Ransome connection. And via that, an interesting Trotsky connection. Lanehead was an interesting place, once upon a time...
Blood Red, Snow White by Sedgwick is an interestingly readable piece of fiction based around Ransome and his adventures. Thought still had a copy but it ain’t been returned.
Agree with first part of your comment but have to correct the bit from American Airlines …Emirates do not receive subsidised fuel (though they do hedge privately). The reason they are the world’s most profitable airline is good management and excellent service which has led to consistently high load factors and highest revenue per available seat kilometer. The US carriers have tried for years to discredit them, but Emirates are simply a better airline. Having a great airport hub in a very strategic location between Asia, Africa and Europe helps too.
Over in Reddit land lol...
Why is everyone on Interest.co.nz so pessimistic about housing?
https://www.reddit.com/r/PersonalFinanceNZ/comments/1kp5g9a/why_is_ever…
It is sometimes amazing how people can maintain the same energy for years just honing in on that subject.
And, LOL:
One really fascinating case is Powerdownkiwi who will comment on nearly every single article with peak-oil doomer type commentary, no matter how unrelated it is to resource limits
Various mentions of the paywall killing off comments.
Its often enlightening to see ourselves as others see us...
Its not all bad though:
"Honestly I think interest.co.nz is the most realistic and balanced news source on property in NZ."
"More realistic and critically thinking individuals than the typical person who reads the NZ Herald / OneRoof puff pieces and assumes the market is still in 2021."
"I think the comments and articles just stand out amongst the mass of rose tinted and FOMO triggering content put out by real estate and bank interests. "
And now kiwikid you put a better spin on it. Must admit I didn't bother reading the link.
Its a long thread, I'm still reading it...& now wondering if PDK is 🤣
They are probably just an opposition opinion group, who cares.
I suggest everyone takes a look some balanced comments
Yeah I ended up having a look IT and fair enough. Just what one gets used to I suppose.
there is a lot more understanding of asset allocation displayed over there.
USA bonds really stretching the legs!
US30yr now past 5% and NZs also going North.
Time to lock in cheap borrowing rates now?? Before they head North at the retail end.
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