A review of things you need to know before you go home on Wednesday; more rate cuts, business confidence ceases to exist, deals come unstuck, swaps steepen, NZD holds soft, & more

A review of things you need to know before you go home on Wednesday; more rate cuts, business confidence ceases to exist, deals come unstuck, swaps steepen, NZD holds soft, & more
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Here are the key things you need to know before you leave work today.

Non-bank lender Resimac has trimmed all its home loan interest rate levels.

Both the Co-operative Bank, and SBS Bank have each trimmed a small set of selected TD rates.

The ANZ Business Outlook preliminary April reading shows record lows across the board. Article here. Charts here.

Big ticket purchases like property, vehicles and home appliances are the most likely to be delayed with just 45% of consumers confident in their financial situation.

The Co-operative Bank says it won't be paying customer-members' rebates this year following RBNZ move to halt bank dividends in response to economic fallout from the COVID-19 pandemic.

In what could be a taste of things to come, an overseas buyer is seeking to walk away from an agreed deal to buy one of the country's largest retirement village operators.

S&P has downgraded Australia's sovereign credit rating outlook to 'negative' but left the rating itself unchanged at AAA. This is despite saying Australia is facing a steep recession. It will probably have very little impact on their ability to raise money internationally or the rate premium they pay. S&P will no doubt be assessing New Zealand's rating too. And bank ratings. But unlike Fitch, they haven't yet made any announcements. Expect S&P to follow Fitch however.

Electricity demand is still slipping, down -16% on a two-week change basis.

There are now 1210 Covid-19 cases identified in New Zealand, with another +50 new cases today and lower than the +54 increase yesterday. That is the lowest daily increase in two weeks. The number of clusters is 12. Only one person has died here. There are still only 12 people in hospital with the disease today, but four are now in ICU, two critical. 23% of all cases have recovered.

Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 1,430,000 and up +82,000 from the 1,348,000 we had this time yesterday. 28% of all cases globally are in the US and they are up +31,000 in one day to 399,000. The Americans are still claiming the disease is peaking there, but there is no real evidence of that yet. China's recovery rate is now up to 94%. Australia now has over 5900 cases, a peaking, and 50 deaths, a sharper rise. Global deaths now exceed 82,000. Death rates in some European countries are alarming. The UK's for example is 11%. Italy's is 12.6%.

Wall Street investors started today extending yesterday's very unusual rally. But by the end of the day the enthusiasm had vanished and the S&P500 ended lower. Still they held on to most of Monday's spectacular rise. Asian markets have all opened lower.

In China, more than 460,000 companies closed permanently in the first quarter of 2020 due to the economic effects of the coronavirus pandemic. More than half of them had operated for under three years, corporate registration data shows.

Yesterday, swaps held at the short end and rose at the long end, further steepening the curve. We don't have wholesale swap rates movement details today yet. We will update this later in the day if they show a significant change. The 90-day bank bill rate slipped -1 bp to 0.47%. The Aussie Govt 10yr is up +10 bps at 0.92%. The China Govt 10yr is unchanged at 2.52%. The NZ Govt 10 yr yield is down -2 bps at 1.07%. The UST 10yr is up +2 bps today to just under 0.71%.

The Kiwi dollar is unchanged from this time yesterday at 59.6 USc. Against the Aussie we are soft at 97.1 AUc. Against the euro we are also soft at 54.8 euro cents. That means the TWI-5 is now down to 66.3.

The price of Bitcoin is also unchanged today at US$7,266. The bitcoin price is charted in the currency set below.

This soil moisture chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Our exchange rate chart (including bitcoin) is here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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You should really add the samaritans hotline number after this article. We are in trouble.

I just had a whole ml of rain, all at once too. Suspect the Easter lamb trade has been called off. Winter getting closer.

I just drove to town for groceries. Couldn't believe the state of the pastures. We don't have much but do look nice and green and my best looks ok. Didn't see anything in a half hour drive that was even close to ok. Decidedly poor autumn to put it mildly. Due some rain tonight but we'll see.

It's probably too late, but perhaps a meme could be started extolling the Easter Lamb? For the religious, the Lamb of God is an obvious marketing hook, for the literary, Charles Lamb's 'Dissertation on Roast Pig' would appeal to the pun-savvy and have the side benefit of easing the Porker Surplus, and for the foodies, Rick Stein's Lahmacun (600g minced lamb) is just the ticket.

You must be closer to the ranges, Napier only a few drops to light drizzle.

my young grass paddock has gone back to powder, going to have to resow it with something like oats if we don't get some rain soon. That seed was expensive too.

No rain here :-(

I thought you had good rain a few weeks ago? I was amazed at my crop today, I scratched the surface and it really was just powder underneath. The moisture deficit must be enormous.

Good falls in waikato today but last week predicted rain didnt happen. Forecast wet easter sunday will be good

It's the back country that's really in trouble here. Coast got rain. My problem is getting feed before the frosts kick in. Also worried about the health of some farmers shut at home not getting out.

These sound like incredibly tough times. Sorry to hear you guys are facing this.

I hated going to town but I do realize that just driving down the road has a bit of a soothing effect, getting off the farm can be damn important.

if you need a laugh, the world is filling up with morons


In what could be a taste of things to come, an overseas buyer is seeking to walk away from an agreed deal to buy one of the country's largest retirement village operators.

How are we going to fund the current A/C deficit if deals like this are a thing of the past or will it disappear with the collapse of our standard of living?


Farming should become very profitable as the exchange rate goes down, as should mining (so anyone flying in, flying out, to Aussie mines should do nicely too). Fundamentally, NZ is a producer of basics for the big manufacturing countries, think food, forestry and mining. Oops, sorry, we killed that last one off.

Usually when times are hard there is an unexpected outbreak of sanity. We probably will finally get around to reforming the RMA and reducing unnecessary bureaucracy. We really should be an excellent mining province, like Sweden and Finland and Norway are, with clearly defined environmental protections and a pro mining culture. Then we can afford those nice electric cars like they can. We should be at the top of this list:

those 'big manufacturing countries' are in trouble themselves.


WRT mining - might be worth holding on to for a rainy day

I doubt the solution to our Dutch disease-riddled economy would be more commodity-fueled growth.

Those countries you mention also incorporate some of the midstream work on extracted commodities (ore refining, processing etc.) after digging up dirt and have an enviable industrial sectors of their own.

Unfortunately, under our current settings, we would more likely go down the Australian route with mining than Scandinavian.

Would love to see these things occur. Ideally, coupled with not treating property as a sacred cow into which all money and plenty more that doesn't exist yet must be funneled into subsequently. A bit of focus on exports and productivity coupled with reducing regulation would be an amazing change.

Speaking to a colleague on West coast they love mining to be back on agenda, places like fox and Franz are going to really struggle for next two years.

"In China, more than 460,000 companies closed permanently in the first quarter of 2020 due to the economic effects of the coronavirus pandemic. More than half of them had operated for under three years, corporate registration data shows."

Assuming a reporting lag this isnt really even half the picture given the demand contraction in the US, EU and wider. China is fkd squared. No good being the world's factory if Joe Public isnt buying anything.

There will be violent civil unrest. There. Here. Everywhere.

China courts everybody.

As China tourism grew the numbers going to Thailand went exponential to the point (like NZ bar Oz) Chinese are the No 1 tourist group. They are also the biggest market for the light industry (aircons etc) and the biggest market for Thai rice.

Over dependence is an understatement ~ a bit like our dairy and tourism industries.

Did Bernard Hickey get New Zealand's housing bubble ( everything is a bubble) wrong , not once but twice.

So why aren't we worried enough to start taking urgent action to head off a collapse?

If the RBNZ's policy actions to cut the OCR in half five times since July 2008 are not taking urgent action, what must that classification include?

Bollard claimed a 3.5% OCR was an emergency setting.


I am desperately looking for a happy economic ending for New Zealand, but truly are struggling, unless its an absolute reset. The Monty Python sketch of 'its only a flesh wound ' seems more appropriate , as New Zealand loses limbs as it grapples to maintain gargantuan housing wealth with all forms of financial wizardry..

Bringing back to Australasia more cruise passengers, this time Uruguay.

As Mr Chaston noted, S & P have followed in Fitch's footsteps and downgraded the big four banks.

There does seem to be two narratives running, essentially teddy bears versus grim reality. Stuff has a story about A Colmar Brunton poll showing 90% trust the govt (taken before David Clark’s transgressions, no doubt). Can anyone explain these paragraphs from the article, especially the last one:

“Most Kiwis (60 per cent) felt the Government had got it "about right" in its response to Covid-19, with 34 per cent wanting the Government to do more. Just 5 per cent thought it had gone too far.

The online poll was weighted to represent New Zealanders and was conducted mostly for public sector clients.“

That seems to imply there wasn’t an option to say they’d got it wrong, or if there was, no one ticked that box. And that there some sort of racism in the survey which was carried out on behalf of the government sector?

Sounds like timing to me. It's a poll of how they're managing the medical event. Folk aren't having to deal with economic after effects yet.

Blind kiwi patriotism

Yes, everyone is wrong apart from your guys? And no blindness here at all.

International Labour Organisation report, ILO Monitor 2nd Edition: Covid-19 and the world of work which was published yesterday. The ILO report is deftly succinct, “The COVID-19 crisis is expected to wipe out 6.7% of working hours globally in the second quarter of 2020 – equivalent to 195 million full-time workers. Large reductions are foreseen in the Arab States (8.1%, equivalent to 5 million full-time workers), Europe (7.8%, or 12 million full-time workers) and Asia and the Pacific (7.2%, 125 million full-time workers). Huge losses are expected across different income groups but especially in upper-middle-income countries (7.0%, 100 million full-time workers). This far exceeds the effects of the 2008-9 financial crisis.”

Commentary from Bands Financial. HK & Shanghai.

Two weeks in.
Should we expect changes in behaviours.?
Probably not.


"There also appears to be a massive disconnect with what the public is being told, and what is actually happening on the ground."
Ardern isn't being called out often enough over this disconnect but she should be... her statements on the border being closed, adequate PPE gear being available and her denial that the govt's arbitrary rules were responsible for Bauer's demise are outrageous distortions of the truth.
Yesterday, Sally Duggan, of the MPA, said what Ardern had claimed about Bauer not engaging with the govt were "untrue"... which is a polite way of putting it.