Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes today.
TERM DEPOSIT RATE CHANGES
Kiwibank chopped between -1 bps and -20 bps from most of their term deposit rates yesterday. Today, HSBC made similar reductions on rates to 1 year, and Heartland Bank also did the same for rates out to 5 years.
A MARCH BONANZA
A bumper kiwifruit harvest and higher prices for milk powder and meat saw our exports reach $5.8 bln last month. So we went into the lockdown with a trade deficit for the year to March of -$3.456 bln, the lowest March year result since 2015. Imports for the year were unchanged at $64.1 bln (but up +61% in ten years), but the real star is exports which were up almost +4% to over $60 bln for the first time ever. Annual exports are up only +53% in ten years however.
MORTGAGE MONEY FLOWS STRONGLY INTO LOCKDOWN
New figures show the banks wrote out the biggest amount for mortgages in a March last month since 2016; first home buyers had a pre-lockdown surge.
MORE CHINA
That same trade data shows that the trade surplus with China rose from +$1.98 bln in the year to March 2019, to +$4.11 bln in the to March 2020. For Australia, our trade suplus shrank from +$1.7 bln to +$1.3 bln. For the USA, our trade deficit shrank from -$0.9 bln to under -$0.7 bln. And for Japan our trade deficit also shrank from -$1.1 bln to -$0.5 bln. Fonterra is reaping benefits from its China exposure.
MORE RURAL
Exports from our rural sector made up almost 73% of all goods exports in the year to March 2020, and that was higher than the just over 71% in the same year to 2019. With the demise of tourism, and the struggles of the education sector, rural exports are sure to become an even larger proportion of how New Zealand earns its way in the world.
TOUGH GOING, BUT NO DOWNGRADE
Credit rating agency S&P has been reviewing the prospects of the big Aussie banks. They see big credit losses, especially as they expect Aussie house prices to fall by -10% in 2020. But they also see these banks strong enough to not only survive, but also retain their existing credit ratings (AA-). Separately, ratings agency Fitch is warning that corporates in our region are under increasing liquidity stress.
BIG BILLS
The RBNZ has reported a very large rise in the number of banknotes in circulation as at the end of March. This was caused by an unprecedented demand for cash from system participants (banks, retailers, the public) in the days leading up to the COVID-19 pandemic lockdown on 25 March 2020. They expect a large portion of this increase will be returned to the Reserve Bank once the pandemic is over. The number of $50 notes in circulation rose +17% and the number of $100 notes rose +12%, both reversing atrophy in prior years. These two high-value denominations now represent 42% of all banknotes in circulation and 77% of the value of all banknotres in circulation.
BNZ BEEFS UP 'SUSTAINABLE FINANCE'
BNZ has appointed Louise Tong as General Manager Sustainable Finance, Corporate & Institutional Banking.
LOCAL UPDATE
There are 1474 Covid-19 cases identified in New Zealand, with +2 new cases today and less than yesterday's +3 increase. Nineteen people have died, unchanged from yesterday, all geriatric patients. There are now just 6 people in hospital with the disease, with now none in ICU. Our recovery rate is now up over 83% and rising.
AUSTRALIA UPDATE
In Australia, there are now 6731 cases (up +11), 83 deaths (+1) and a recovery rate of just under 84%, unchanged. 109 people are in hospital (-4) with 42 in ICU (-1). [Note that, like most countries, Australia only counts confirmed cases. New Zealand on the other hand counts both "confirmed and probable" cases which is why we sometimes get negative numbers - some 'probables' aren't and so get removed from out tally.]
GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 3,116,000 and up +78,400 from earlier today which is a faster rate of growth. Now, just under 33% of all cases globally are in the US, which is up +25,000 since this time yesterday taking the total to 1,012,500 and the first country to exceed 1 mln cases. This is a slower rate of increase however. US deaths now exceed 58,000. Global deaths are about to exceed 217,000. Russia (+6500 in a day) now has more cases than China. Brazil is another country getting a very fast rise in cases, up about +5000 today alone and it has been climbing steeply recently. More than 5000 people have died in Brazil so far. These numbers will undoubtedly be much higher because the President in Brazil is quite dismissive of the impact it is having on his population ("just the flu").
EQUITY UPDATE
The NZX50 Capital Index has lost some ground today after its recent strong showing, down -0.8% so far. Today, the ASX200 is up +0.8%. Overnight, the S&P500 fell -0.5% after European markets rose about +1.5%. At their opening today, Shanghai is up +0.4%, Hong Kong is up a minor +0.2%, while Tokyo is flat.
SWAP RATES UPDATE
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. There were huge falls yesterday in wholesale swap rates. The two year was down -11 bps, the five year was down -9 bps. And the ten year was down -5 bps. The 90-day bank bill rate is unchanged today at its record low 0.26%. The Aussie Govt 10yr is also unchanged at 0.92%. The China Govt 10yr is also unchanged at 2.52%. The NZ Govt 10 yr yield has reversed yesterday's very sharp, up +10 bps to 0.83%. The UST 10yr is down -3 bps from this time yesterday at 0.62%.
NZ DOLLAR GAINS
The Kiwi dollar has risen sharply today, back to 60.9 USc and in a volatile phase. Against the Aussie we have stopped falling and now at 93.4 AUc. Against the euro we are up at 56.2 euro cents. That means the TWI-5 is up to 66.8.
BITCOIN FIRMER
The price of Bitcoin is up +1.7% from this time yesterday to US$7,841. 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 ».
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