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
The variable rate cuts have flowed from the OCR rate cut and they are summarised here. ANZ cut their's by just -20 bps to 6.69%. ANZ only passed on -20 bps at the April -25 bps OCR cut too. The fixed rates cuts are here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
ANZ led the cuts to savings account rates. Details here. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
A CUT & GUIDANCE, BUT LESS THAN SOME HOPED FOR
The Reserve Bank cut the OCR by -25 bps to 3.25% as expected, but it also indicated that there may be one more cut this year. But bank economists may have expected and hoped for more trimming than indicated. The RBNZ move wasn't a unanimous decision with one of the six members voting against a cut at this time.
GLOOMY TURN
In April, the labour market takes gloomy a turn, with the 'economy struggling to cast off recessionary shackles'. Monthly filled jobs data shows a decline in April, while figures for the previous two months have also been revised down.
RENTAL YIELDS STAY VERY LOW
There has been a slight improvement in the rental yield and cash flow figures for residential investment properties in Q1-2025, but in the absence of capital gains the numbers are still pretty grim. Many residential property investors are likely facing negative cash flows even though mortgage rates are tumbling.
CO-OP BANK PROFIT HIT BY CCCFA PROVISION
The Co-operative Bank's March-year profit fell 44% to $7.158 million as expenses rose 9% and impairment losses increased. The bank will pay $1.5 million in rebates, down $1 million year-on-year. Co-op says its profitability was also hit by a $4.4 million provision relating to historic credit fees, set under the Credit Contracts and Consumer Finance Act (CCCFA). This comes after it reimbursed some $5 million to customers in relation to these fees in prior years. Co-op says it's working with the Commerce Commission to finalise this matter. The bank's mortgage book grew 6% to $3.2 billion.
PAYMARK PROFIT DROPS
Eftpos provider Paymark's 2024 calendar year profit fell almost $4.5 million, or 21%, to $16.684 million as revenue fell and expenses rose. Now owned by France's Worldline SA, Paymark paid $14 million in dividends, down from $21 million in 2023.
ACCREDITED
The first private issuer of building consents, Building Consents Approvals (BCA), has now been accredited with the MBIE. The Christchurch-based company will operate nationally and promises to issue building consents within 10 working days "for eligible residential projects".
MORE FINES & COMNPENSATION
El Cheapo Cars has been sentenced in the Porirua District Court for its failure to provide key information to borrowers about their loans. The Wellington-based motor vehicle trader and finance lender had pleaded guilty to seven charges the Commerce Commission filed under the Credit Contracts and Consumer Finance Act (CCCFA). El Cheapo Cars has now been fined $115,000 and ordered to pay $341,931.46 in compensation to hundreds of affected borrowers. ComCom opened its investigation into El Cheapo in October 2021, following a customer complaint. The Commission has also filed civil proceedings against Go Car Finance and Second Chance Finance in the High Court, with allegations that both lenders also breached the CCCFA when providing car finance to borrowers.
DAIRY PRICE UPDATE
The overnight dairy Pulse auction saw prices for both SMP and WMP slip although less than the futures market had suggested. The WMP was down -2.7% in USD from the prior week's full event, and a bit more in NZD. To be fair both prices had risen sharply since April. This pullback still leaves them in a rising trend despite today's adjustment.
NZX50 DROPS SHARPLY
As at 3pm, the overall NZX50 index is down -1.8% so far today. And it is down -2.7% for the past week, down -5.4% since the start of the year, but up +5.8% from this time last year. Investore, Kathmandu, Fletcher Building, and Kiwi Property lead the gains, as Infratil, Oceania, F&P Healthcare, and Sky Network are the main decliners.
A INVESTMENT BREATH OF FRESH AIR
F&P Healthcare announced full year results today. They are New Zealand's largest listed company, making sales of more than $2 bln (+16%) and earning more than $377 mln after tax (+30%). More than 22 mln people use their products worldwide. Their share price fell -2.3% on the news today, but is up +3.6% for the month, +29.6% for the year.
EXCHANGE RATE BUMPS
Data out from the RBNZ today (F5) shows their foreign currency intervention capacity fell by -$889 mln in April. This comes after a rise of +$854 mln in March. The new level is $25.8 bln. The recent changes are more likely just exchange rate impacts.
SWAP RATES FIRMISH
Wholesale swap rates may be slightly firmer following the OCR decision. 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 3.27% on Tuesday. The Australian 10 year bond yield is down -2 bps at 4.32%. The China 10 year bond rate is up +1 bp at 1.70%. The NZ Government 10 year bond rate is up +2 bps at 4.63% and was down -4 bps to 4.55% in the earlier RBNZ fix today from yesterday. The UST 10yr yield is on 4.47%, down -2 bps.
EQUITIES MIXED BETWEEN THE BIG NZX50 DROP, AND S&P500 RISE
The NZX50 is down -1.7% so far today in solid drop, but the ASX200 is up +0.1% in afternoon trade. Tokyo is up +0.5% in early Wednesday trade. Hong Kong has fallen -0.3% at its open while Shanghai is up +0.1%. Singapore has opened up +0.5%. Wall Street ended its Tuesday trade with a sharpish +2.0% gain on the S&P500.
OIL HOLDS
The oil price is little-changed at just under US$61.50/bbl in the US, and just on US$64.50/bbl for the international Brent price.
CARBON PRICE DIPS
The carbon price is slightly low, down -70c today at NZ$54.30/NZU with slightly more volume. 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 SLIPS AGAIN
In early Asian trade, gold is down -US$40/oz from this time yesterday at US$3302/oz.
NZD EASES
The Kiwi dollar is down -40 bps from this time yesterday, now at 59.5 USc. Against the Aussie we are up +10 bps at 92.5 AUc. Against the euro we are up +10 bps at 52.7 euro cents. This all means the TWI-5 is now at just over 66.3 and -20 bps softer from yesterday.
BITCOIN HOLDS
The bitcoin price is at US$108,663 and up just +0.3% from this time yesterday. Volatility has been modest again at +/-1.0%.
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