A review of things you need to know before you go home on Wednesday; more sharp retail rate cuts, RBNZ doubles QE, exports hold up, swaps fall, NZD falls, & more

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
The Bank of China has released some market-leading fixed mortgage rates; specifically their 2.79% one year and 2.89% 18 month fixed rate 'specials'. They cut all other rates including their floating rate which is now 4.35%.

TERM DEPOSIT RATE CHANGES
Westpac has follow-up yesterdays mortgage rate drops with across the card TD rate cuts. Nelson Building Society cut all its TD rates for 1 year and shorter. General Finance also cut rates.

DOUBLING UP
The RBNZ nearly doubles its quantitative easing program to $60 bln and reaffirms its forward guidance to keep OCR at 0.25%. However it also specifically says it's prepared to reduce the OCR further if that is needed.

HUGE BUT CONVENTIONAL
Tomorrow is Budget Day. It is expected to usher in a huge spending program, but not be 'transformative' or 'wellbeing'. The Prime Minister says it will focus on preserving jobs. Others have a view, here and here. We will have full coverage tomorrow.

'JUST GIVE US MONEY'
A May 4&5 poll by the Chartered Accountants trade group revealed that most households (55%) want 'helicopter money' help. Asked if they believed they would be better off in six months’ time, 40% of respondents said ‘no’. Around a third (32%) said ‘yes’ and 28% were unsure. In another question, 12% described impact on their personal finances as severe. Slightly more than half reported a moderate impact. Not surprisingly, employment emerges as the top issue among Kiwis for the Government to deal with in the Budget.

FROM BRICKS TO CLICKS, FAST
Clothing retailer Hallenstein/Glasson Holdings has reported a -30% fall in sales and a loss in the three month period to the end of April. They say they will reopen stores in both New Zealand and Australia but that their retail future has changed to online. "We believe that the significant increase in our online business most likely marks a permanent shift in consumer habits in New Zealand and Australia and we expect our online sales to represent a much larger share of our total sales in the future." This is a worrying signal for main street retail commercial property.

DELAYED UPDATE
The REINZ has pushed back its release of April results until 9:00 am Friday.

BNZ TO CULL CHEQUES
BNZ's to become the second major New Zealand bank to phase out cheques after Kiwibank did so in February. BNZ says it's phasing out cheque use by July 2021, with increased use of digital and online services over the lockdown hastening a fall in cheque use by customers over the last five years.

SELLING DOWN
The founder of the country's first peer-to-peer lender Harmoney has sold down his stake by offloading over 5 million shares. Companies Office records show that Neil Roberts, who once owned virtually all (98%) of Harmoney when it started in 2014, had sold the shares to Tasman-based Michael Lookman. No price is given. Roberts, who has moved back from managing the company, now owns 28.8% of Harmoney, down from 30.8%. And while his stake has been gradually getting diluted since 2014 this appears to be the first time he's actually sold any. Lookman, who first bought into the company towards the end of last year now owns 10.9%. Other big shareholders are: Kirwood Capital Partners (13.4%), Heartland Group (13.1%) and Trade Me (11.7%). Harmoney pulled out of the P2P market earlier this year. 

LIGHT RAIL PARKED
Auckland's light rail project is on hold while the Government’s full focus is on fighting Covid-19, Stuff reports citing Transport Minister Phil Twyford. 

FRAUDSTER SENTENCED
A former Auckland chartered accountant has been sentenced to 3 years and 9 months’ imprisonment for stealing approximately $1.01 mln from 245 clients from 2010 to 2016. Christopher George Wright spent the refunds on gambling, friends and family, school fees and loan repayments.

LESS RELIANCE ON THE DRAGON
Statistics NZ's weekly update of our export trade in goods from 1 February to 6 May shows it running at the same level as the same period a year ago, which is actually amazing. More amazing is that our trade with China is softer, down -6.7%. So that means our goods export trade is growing faster with other countries, and is more diversified.

LOCAL UPDATE
There are 1497 Covid-19 cases identified in New Zealand, with no new cases again yesterday, and the same as the prior day. Twenty-one people have died (unchanged). There are still only two people left in hospital with the disease (unchanged), and none are in ICU. Our recovery rate is now just over 93% with 95 people known to be infected (-12) and 73 of those are in 12 active clusters. That means 22 other cases are recovering in self isolation in the community (-1 from yesterday).

AUSTRALIA UPDATE
In Australia, there are now 6964 cases (+16 since yesterday), 97 deaths (unchanged) and an unchanged recovery rate of just under 89%. 47 people are in hospital there (-2) with 16 in ICU (unchanged). There are now 735 active cases in Australia (-34).

GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 4,259,300 and up +84,000 from this time yesterday, which is an unchanged level of growth. Now, just over 32% of all cases globally are in the US, which is up +22,000 since this time yesterday taking the total to 1,369,400 and the only country to exceed 1 mln cases. This is a slightly higher level of increase. US deaths have reached 82,400. Global deaths are about to exceed 292,000. The UK's spot as the second most infected country was brief. Infections are still rising at +4000/day (only hospitalised cases are counted there), but Russian infections are growing virulently now and have easily overtaken the UK (+12,000/day). Spain has seen a resurgence too also also topped the UK total.

BAD ACTORS ACTIVE
The Government Communications Security Bureau (GCSB), says they are aware of international reports that cyber "actors" have targeted systems and infrastructure central to the pandemic response in a number of countries. New Zealand has not been compromised yet, they say, but they want reports if any organisation notes suspicious activity here.

EQUITIES FALLING GLOBALLY
The S&P500 fell hard at the end of its New York session today, down -2.1%. That followed weakness in Europe. Today, Shanghai, Hong Kong and Tokyo have all opened lower. The ASX200 is down -0.7% and the NZX50 Capital Index is down-0.6% so far..

SWAP RATES UPDATE
Update: Wholesale swap rates fell hard today with the two year down -7 bps, the five year down -10 bps and the ten year down -13 bps. We don't have wholesale swap rates movement details today yet. We will update this later in the day if they show a significant movement. The 90-day bank bill rate is unchanged at 0.26%. The Aussie Govt 10yr is down -3 bps to 0.92%. The China Govt 10yr is unchanged at 2.66%. The NZ Govt 10 yr yield down -9 bps to 0.52%. The UST 10yr has slipped -3 bps today to 0.66%.

NZ DOLLAR FALLS
The Kiwi dollar took a small hit on the RBNZ MPS QE announcement, dropping about -½c to 60.2 USc. Against the Aussie we are down more than -1c to 93 AUc. Against the euro we are even lower at 55.5 euro cents. That means the TWI-5 is down to 66.2.

BITCOIN FIRM
The price of Bitcoin is firmer at US$8,915 and up +2.8% from this time on yesterday. 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.