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
SBS Bank has followed others with some fixed rate increases. Kāinga Ora/HNZ has raised in a similar way. All current mortgage rates are here. And note, you can compare mortgage offers with our unique calculator that takes into account other costs and cashback incentives, here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Gold Band Finance raised its rate card for TD rates of 18 months and longer. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
'A WALL OF WORRY'
The April ANZ Business Outlook Survey shows confidence fell sharply from March to April but not quite as hard as was anticipated. Expected own activity fell with the construction sector reporting the biggest slowdown. Also not as bad as it could have been, inflation expectations rose from 3.1% to 3.8%, "but the RBNZ will be somewhat reassured by pricing intentions not rising any further", ANZ noted.
MUCH MORE MILK
Fonterra has reported that its New Zealand milk collections for March were 147.8 million kgMS, +9.6% above March last season. Season-to-date collections are 1,366 million kgMS, +3.7% above last season. Meanwhile Australian milk collections for March were 9.3 million kgMS, +7.0% above March last season. Season-to-date collections across the ditch are 87.7 million kgMS, +3.8% above last season.
HIGH VOLUME OF LOW EQUITY LENDING
New RBNZ data shows that low equity mortgage lending to first home buyers almost hit $1 billion in March, its highest ever.
MORTGAGES, THEN DAYLIGHT
Bank mortgage books rose +6.0% on March from a year ago, the fastest expansion since the pandemic bubble in June 2022, and prior to that, the fastest since the 2019 expansion. Banks are not getting that sort of growth from personal lending (+1.5%), business lending (+4.1%) or lending to the rural sector (+2.5%). Nothing can touch lending for housing. Mortgage loan books rose +$22 bln in the year to March. Everything else, combined, was only +$7 bln.
LESS INTERESTED IN LOCKING IT AWAY
Household deposits at banks rose +$2.7 bln in March from February, up +$1.7 bln in transaction accounts, up +$200 mln in savings accounts, up +$800 mln in term deposit accounts. Households are keeping their ready cash as liquid as possible at present. This is the biggest March shift apart from March 2020 and March 2021 since these records started in 2016.
A GIFT FOR THE BLACK ECONOMY
For all the work authorities put into anti-money laundering and tax evasion efforts, they are leaving a big, gaping hole with the availability of anonymous banknotes. New data out today shows the popularity of this loophole. It's a gift for those operating illegal commerce. As at March 2026 there were +10% more $10 notes in circulation from a year ago, for the $20 note is was +20 more, for the $50 note it was +12%, and for the $100 note (more visible for dodgy transactions) it was +7% more. These increases far outpace the the overall growth in electronic transactions.
NZX50 MARGINALLY FIRMER
As at 3pm, the overall NZX50 index is up +0.3% so far today. But it is heading for a -1.1% weekly dip. It is down -5.5% from six months ago. From a year ago it is up a net +7.6%. Market heavyweight F&P Healthcare is up +0.3% so far today. EBOS, Tower, Scales, and Genesis lead the index higher as the NZX, Channel Infrastructure, a2 Milk, and Mainfreight are the big decliners.
STRONG DEMAND, MARGINLLY HIGHER YIELDS
Almost $1.6 bln was bid in today's NZGB bond tenders in 135 bids. But only 27 were successful. The May 2023 yield rose slightly from the prior offer a week ago. The May 2035 yield was up almost +40 bps from its prior seven weeks ago. But the May 2041 yield was only up marginally from its last outing six weeks ago.
AGENTIC-READY
Visa has now included ANZ, ASB, BNZ and Kiwibank into its Visa Agentic Ready program, said to be an important step in preparing the local payment network for the next phase of agentic commerce. It enables these banks to test and validate agent‑initiated payments in controlled, production‑grade environments, "using the same trusted credentials, controls and protections that underpin the Visa network". "Agentic" means it is an autonomous robot; with the ability to act independently, proactively, and with purpose to achieve specific goals.
NATIONAL PARTY WANTS 'TRANSPARENCY'
The RBNZ is becoming more political, responding to farmer pressure on National Party ministers. The Finance Minister has extracted a change to have the Monetary Policy Committee have votes made public when consensus over Official Cash Rate decisions isn’t reached, with members encouraged to share individual views as a new charter comes into effect. Members are appointed by the Minister of Finance, inserting her preferences and requiring 'transparency' and therefore giving them a platform to beat up on the professionals when difficult decisions have to be taken.
NATIONAL PARTY DOES NOT WANT TRANSPARENCY
National is the only party to oppose Labour’s proposal for full disclosure of international money transfer fees. Pointedly, this is a proposal that would benefit transfers by low-income remitters to the Pacific Islands - at the expense of the big end of town financial firms.
CAN WE ACTUALLY IMPLEMENT AN EFFECTIVE RESPONSE TO F&M DISEASE?
MPI has announced a live practical field simulation to test operational response arrangements to a foot & mouth outbreak. The test will be in Taranaki on May 15 and will include initial veterinary inspections and testing, reporting, and quarantine. There may be visible activity in the field on the day; this is a practice exercise. New Zealand does not have foot and mouth disease and has never had a case. But this is a more rigorous trial run, building on existing MPI plans and reviews in case one breaks out.
GOOD JAPANESE DATA
Retail sales (+1.7% vs expectations of +0.8% year-on-year) and industrial production data (+2.3% vs +0.4% in February) out of Japan today for March was much stronger than any analyst was expecting. But it was only for March, and questions linger about their April data. Still it is better to lead into that with a good prior month.
MODEST SHIFTS
There were two factory PMI surveys out for China today. The official one has it expanding marginally slower and at a quite modest rate. The unofficial S&P Global version reported a slightly stronger expansion. The official services PMI showed a slightly larger contraction after the surprise tiny March expansion.
AI STARTS TO DELIVER ON ITS PROMISE
On Wall Street, Google (+81% rise in profits), Amazon (+56%) and Microsoft (+24%) delivered bonanza profit results today after their market close, crediting AI for these outsized results. Meta was up too (+61%), but held back by a misfiring AI strategy that will require huge new investment. The positive results will likely boost valuations every higher.
SWAP RATES FIRMER
Wholesale swap rates are likely firmer today, perhaps up +2 or +3 bps, in a halo effect from rising benchmark Aussie yields. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +3 bps at 2.65% on Wednesday. Today, the Australian 10 year bond yield is up +6 bps at 5.07%. The China 10 year bond rate is down -1 bp at 1.75%. The Japanese 10 year bond is up +6 bps at 2.52% today and a new modern record. The NZ Government 10 year bond rate is now at 4.77%, up +4 bps from this time yesterday. The RBNZ data is now 'prior day' with the Wednesday rate down -4 bps at 4.70%. The UST 10yr yield is up +7 bps from this time yesterday at 4.42%.
EQUITIES MIXED AGAIN
The local equity market is up +0.4% in Thursday day trade so far. The ASX200 is down -0.3% in afternoon trade. Tokyo is down -1.0% at its Thursday open. Hong Kong down -1.4% and Shanghai is up +0.1%. Singapore has risen 0.7% at its open. Wall Street ended its Wednesday trade with the S&P500 little-changed (but to be fair, that was before the Big Tech earnings reports).
OIL PRICES RISE AGAIN, ESPECIALLY IN THE US
American oil prices have risen +US$9 from yesterday with the WTI benchmark now just on US$108.50/bbl, while the international Brent price is up +US$1 at just on US$112/bbl. US pump prices have jumped today.
CARBON PRICE HOLDS
There has been active again today on the secondary market, and the price has held $50/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DROPS AGAIN
In early Asian trade, gold is lower at US$4562/oz, down another -US$31 from this time yesterday. Silver is now just over US$72.50/oz and down -US$1/oz.
NZD LOWER AGAIN
The Kiwi dollar is down -30 bps against the USD, now just on 58.3 USc. Against the Aussie we are little-changed at 81.9 AUc. Against the euro we are also down -10 bps at 50 euro cents. This all means the TWI-5 is now just under 61.8 and down -20 bps from yesterday at this time.
BITCOIN DIPS AGAIN
The bitcoin price is now at US$75,673 and down -1.1% from this time yesterday. Volatility has been moderate at just on +/- 2.0%.
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4 Comments
Paul Tudor Jones highlighted that a U.S. equity market cap at roughly 2.5x GDP, a 30-35% drawdown would transmit into the real economy primarily via fiscal, financial‑stability, and wealth‑effect channels in a way that is much more violent than past cycles.
So total U.S. stock market cap is about 252% of GDP today, versus ~65% in 1929, ~85-90% in 1987, and ~170% in 2000.
If valuations simply mean revert to the average PE of the last 25–30 years, he estimates a 30-35% equity decline from here.
A 35% drawdown on an equity market worth ~250% of GDP implies a wealth loss on the order of 80-90% of GDP (0.35 × 2.5).
Equity shock → tax‑revenue shock → deficit spike → bond‑market stress → tighter financial conditions → further equity and real‑economy weakness, amplified by high direct and indirect equity exposure.
https://www.interactivebrokers.com/campus/traders-insight/securities/st…
The faster you go, the bigger the mess.
I can't see how they could let the market (PE) revert to mean. The boomers wouldn't accept it.
If it did, I could easily see ratty at USD10K or lower.
The mighty Chris Joye says Aussie faces the prospect of a prolonged rate hiking cycle as government policy fuels higher inflation. Great read. If you can't bothered, few highlights.
With immigration and government spending acting as the primary engines of the economy, Joye warns that the private sector is actually shrinking, leaving Australia in a "per capita income recession." If the RBA is forced to push rates beyond 5% while the government simultaneously pulls the rug out from under population growth, the end result could be a recession unlike any we've seen before.
Risk Assets / Equities: The great disconnect
- The Verdict: Bearish on valuations, particularly in the US.
- The Rationale: There is a massive "dichotomy" between US equity highs and the reality of entrenched inflation.
- The Local View: Aussie bank shares are currently "55% overvalued" relative to bonds.
Residential Property: Expect a pullback
- The Verdict: Expect a national pullback, though select regions will defy the trend.
- The Rationale: Higher rates will force national prices to "pay back" the 9–10% gains seen in 2025. While Sydney and Melbourne are already cooling, Brisbane and Perth remain "gangbusters" thanks to infrastructure booms and business-friendly policies.
“I could see the cash rate going into the five - six per cent rate range, which would be terrible for house prices.”
https://www.livewiremarkets.com/wires/joye-rba-s-hot-economy-experiment…
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