A review of things you need to know before you go home on Tuesday; very low TD rates, huge cash burn, farmers feel more loved by banks, consumer spending stages a comeback, swaps up, NZD firm, & more

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

MORTGAGE RATE CHANGES
No home loan rate changes advised so far today. But we have reviewed the rate premiums that apply for borrowers who have less than 20% equity, here.

TERM DEPOSIT RATE CHANGES
ANZ, BNZ and Heartland all cut rates today. More here.The Wairarapa Building Society also made its own cuts.

UGLY RESULTS DUE
Our national airline says there's still too much uncertainty to forecast earnings for the financial year that ends in a month, but says it hasn't needed to draw on the $900 mln loan facility offered by the taxpayer yet. It has its cash burn down to $60 mln per month while waiting for redemption..

AN UNUSUALLY POSITIVE TRADE RESULT
We posted a +$1.3 trade surplus in April 2020 which is vastly better than the +$361 mln surplus in the same month a year ago. This is because although exports fell a modest -4%, imports crashed -22%. Basically, we did without 'stuff', especially things like cars.. Compared with many other countries, Covid-19 has made us a net gainer. Food exports have proven to be more resilient in a crisis.

POSITIVE CHANGE IN FED FARMERS BANK SURVEY
Federated Farmers says the number of farmers feeling satisfied with their banks has risen slightly, and the number feeling under pressure has dropped. Federated Farmers' May 2020 banking survey of 1,400 farmers shows respondents feeling satisfied or very satisfied with their banks rose to 69% from 68% over the past six months. Those feeling under pressure dropped to 19% from 23%. Satisfaction has slipped as a trend since the twice yearly survey started in August 2015 with this being the first positive change since then. Federated Farmers notes the Government and Reserve Bank have been encouraging banks to support lending during the COVID-19 crisis.

WHAT FARMERS PAY
Based on survey responses relating to nearly 3,000 on-farm positions, the 2020 Federated Farmers/Rabobank Farm Remuneration Report shows the average farm employee remuneration package for dairy farm workers rose by +9.7% to $57,125, across sheep/beef farm roles it was up by +7.6% to $55,568, across grain farms it was up by +3.1% to $58,800 and in ‘other’ specialist farm roles outside standard position descriptions, it was up by +16% to $61,288.

BOUNCEBACK TO NEAR 'NORMAL'
Paymark is reporting that consumer spending is recovering fast, and in the week ended May 24, it was down only -2.3% from the same period a year ago. At its depth (April 12) it was down -58%. Similarly, the two regions that had the largest year-on-year fall, Auckland and Otago, have experienced the strongest comeback, +16.2% and +16.9% week-on-week.

GOVT'S COVID-19 VACCINE STRATEGY
The Government is putting $37 mln towards a COVID-19 vaccine strategy. It says this will enable NZ scientists to contribute to global research efforts and explore the potential for vaccine manufacturing capability in NZ. It aims to secure a safe and effective vaccine in sufficient quantities at the earliest possible time. $10 mln will be used to support research in NZ, and $5 mln to support potential manufacturing capability. Up to $15 mln is for international research collaboration, and $7 mln for Gavi, which distributes vaccines to developing countries.

A DIM OUTLOOK
Westpac isn't positive about the future of the constructions sector. It may be springing back to life as the lockdown is lifted. However, they think the sector faces another significant downturn in 2021. Job losses, stretched balance sheets, and nervousness about the economic backdrop will result in home building falling -20% below preCovid levels over the year ahead, that say. Slower population growth will also dampen construction activity. Even so, many parts of the country will still be wrestling with a large shortage of houses for an extended period. Commercial construction is set to fall by -15%, weighed down by weakness in tenant demand and increased investor nervousness.

MORE ENERGY CONSUMED
In the past week, electricity demand has pushed up higher than for the same week a year ago. Hydro lakes are at normal levels, and inflows are normal for this time of year.

STILL AT CRISIS LEVELS
Our Auckland readers will know that winter rain has returned. That means +70% more than normal has flowed into the City's water storage reservoirs - for the week. But that still leave this storage at only 43% of capacity when it is normally 77% full at this time of year. The Queen City water crisis hasn't passed; in fact it hasn't even started to improve yet.

WATCH WE ARE WATCHING
We are keeping an eye on bankruptcies and no asset procedure levels. Through to March, they were unremarkable. In April, the numbers fell sharply, but that may have just been a processing anomaly. From here on out they may get 'interesting' one would think.

LOCAL UPDATE
There were zero cases again today, leaving the total at 1504 cases identified as either confirmed (1154) or probable (350). There is still only one person left in hospital with the disease, and they are not in ICU. Our recovery rate is now just over 97%, with only 22 people known to be still fighting the infection (-5).

AUSTRALIA UPDATE
In Australia, there are now 7126 cases (+12 since yesterday), 102 deaths (unchanged) and a recovery rate of just under 92%. 31 people are in hospital there (-5) with 5 in ICU (unchanged). There are now 484 active cases in Australia (-17). Just for comparison, the recent Aussie bushfire emergency cost 445 lives.

GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 5,494,300 and up +87,800 from this time yesterday. Now, just 30% of all cases globally are in the US, which is up +19,000 to 1,662,300. US deaths are now touching 100,000. Parts of the US are convulsed by stupid conspiracy theories. Global deaths now exceed 346,000. Deaths in the UK now exceed 37,000, the country with the second highest global total.

EQUITY MARKET UPDATES
Equity markets in Shanghai (+0.7%), Hong Kong (+1.6%) and Tokyo (+2.2%) have all opened today higher. And the ASX200 is up +1.8% so far today, while the NZX50 Capital Index is up +1.3%.

SWAP RATES UPDATE
Update: Swap rates moved higher today, with the two year up +2 bps, the five year up +5 bps and the ten year up +6 bps. We don't have wholesale swap rates movement details today yet but early suggestions are little-changed. 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 little-changed at 0.87%. The China Govt 10yr is up +2 bps at 2.67%. The NZ Govt 10 yr yield is up +4 bps at 0.65%. The UST 10yr is basically unchanged at 0.67% awaiting tomorrow's market opening in New York.

NZ DOLLAR FIRM
The Kiwi dollar has been in a firming trend all day, now just over 61.2 USc. Against the Aussie we are unchanged at 93.3 AUc. Against the euro we are also firm at 56.1 euro cents. That means the TWI-5 is up marginally to 67.1

BITCOIN FIRM
The price of Bitcoin is up by +1.1% since this time yesterday at US$8,875. 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 ».