Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes here today.
TERM DEPOSIT RATE CHANGES
TSB has cut a range of term deposit rates out to 12 months, some by as much as -25 bps.
INFLATION IS DEAD
At least, inflation expectations are, according to the RBNZ survey of consumers who now only see an annual rate of 0.7% in one year from now, and just 1.2% in two years from now. These are huge retreats since the last quarterly survey and are record lows for this survey.
PRIVATE DEBT DEMAND DIVES
Consumer credit demand fell by up to -70% and commercial credit demand dropped by up to -63% during the Covid-19 Alert Level 4 lockdown, credit bureau Equifax reported.
BACK TO THE FUTURE
According to information released by the Finance Minister, next week's Budget is to focus on strengthening the public sector, providing increasingly targeted support for households and businesses and rebuilding 'a new-look economy'.
GETTING THERE IN SMALLER STEPS?
The Prime Minister has signaled the the move down from L3 could be phased in. All mass gatherings will be limited to 100 people. Domestic travel will be allowed. Retail, hospitality and beauty businesses can open under new restrictions.
PUBLIC DEBT DEMAND LEAPS, $2.2 BLN MISSED OUT
The Treasury today tendered another $1.05 bln of new Government Bonds. There were three tranches. The April 2025 bond was for $500 mln and achieved an average yield of just 0.28%. The April 2027 bond was for $350 mln and achieved an average yield of 0.48%. The April 2033 bond was for $200 mln and achieved an average yield of 0.90%. All up, $3.257 bln was bid for the $1.05 bln offered.
PLANNING CASH FLOWS
The government’s small business support service has launched a new tool to help New Zealand’s small businesses forecast their cash flow and plan for the future. It is a very basic tool unlikely to address the varying needs of most businesses. It sort of 'proves' Government departments have a very superficial and simplistic understanding of small businesses.
THE RBNZ IS HIRING
It is looking for a 'leader' for a new section to manage "all things Money and Cash, past and future, physical and digital".
AUCKLAND GETS WATER RESTRICTIONS
New Zealand's largest city is going on water restrictions, effective Saturday, May 16. 2020 has been the driest in Auckland's history, with water storage lake levels falling below 50% for the first time in 25 years. They are currently at 46%. Recent rain has alleviated nothing.
HIGHER COMMODITY PRICES
Iron ore and coking coal prices are both moving higher based on Chinese demand. Earlier in the march quarter, shipments of these commodities to China has delivered a record trade surplus for them of AU$10.6 bln in March alone. Ans 7,000 square kilometres of land will be released for coal and gas exploration as part of a raft of measures to ensure the survival of the resources sector through the coronavirus pandemic, the Queensland Labor Government has announced.
LOCAL UPDATE
There are 1489 Covid-19 cases identified in New Zealand, with one new case today, down from two yesterday. Twenty-one people have died, unchanged yesterday, almost all geriatric patients. There are just two people left in hospital with the disease (unchanged), and none are in ICU. Our recovery rate is now up over 89% and still rising.
AUSTRALIA UPDATE
In Australia, there are now 6875 cases (+26 since yesterday), 97 deaths (+1) and a stable recovery rate of just on 87%. 62 people are in hospital there (-4) with 27 in ICU (unchanged).
GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 3,753,800 and up +92,600 from this time yesterday which is a rising level of growth. Now, just under 33% of all cases globally are in the US, which is up +24,300 since this time yesterday taking the total to 1,228,200 and the only country to exceed 1 mln cases. This is a stable level of increase. US deaths now exceed 73,000. Global deaths are about to exceed 264,000. The infection accelerations in Russia, Brazil and India are looking very grim indeed.
EQUITY UPDATE
The NZX50 Capital Index is up again today, up a modest +0.4% so far. But almost every other bourse we follow is either flat or lower today, although none of the falls exceed -1%. The S&P500 fell -0.7% earlier, sinking quite fast at the close after the terrible ADP Employment report was released. The ASX200 is also lower despite that record high trade surplus in March.
SWAP RATES UPDATE
Yesterday, wholesale swap rates firmed again in a minor way. 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 is unchanged at a record low 0.26%. The Aussie Govt 10yr is up +3 bps to 0.93%. The China Govt 10yr is up +1 bp to 2.56%. The NZ Govt 10 yr yield has turned back down, down -4 bps to 0.63%. The UST 10yr has firmed slightly today to 0.69%, another +3 bps rise.
NZ DOLLAR SLIPS
The Kiwi dollar has stayed down after last night's small fall and is now at 60.2 USc. Against the Aussie we are also down, to 93.8 AUc. Against the euro we are holding at 55.7 euro cents. That means the TWI-5 is softer at 66.3.
BITCOIN FIRM
The price of Bitcoin is up another +3.8% from this time yesterday to US$9,339. 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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