A review of things you need to know before you go home on Wednesday; many TD cuts, dairy prices hold, smaller current account deficit, debt load rises, job levels held, swaps firm, NZD lower, & more

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

MORTGAGE RATE CHANGES
No changes announced so far today.

TERM DEPOSIT RATE CHANGES
Heartland Bank, Co-operative Bank, SBS Bank and BNZ all cut term deposit rates.

DAIRY PRICES HOLD
There was another dairy auction and this one was positive, up +1.8% in US dollars from the prior auction and the most since the start of the year. In New Zealand dollars, prices are virtually unchanged. Volumes sold are rising. WMP (+2.2%) and SMP (+3.1%) led the way. But this auction's positive outcome is unlikely to change any farm gate milk price forecast.

SMALLER DEFICIT
The country's annual current account deficit for the year to March was -$8.5 bln, less than the -$10.8 bln the year before. That was -2.7% of GDP (down from -3.6% last year and -3% as at the December quarter), and in line with economists' forecasts. Weaker import levels and much lower international travel is behind the improvement.

ASSESSING OUR OVERSEAS DEBT LOAD
The level of gross indebtedness to the rest of the world, and measured by the liabilities in our International Investment Position (IIP), is now $487.5 bln which is 11% more than a year ago, largely boosted by the falling exchange rate which devalued -11% in the same period. On a per capita basis, we owe $97,800 for every person and this indebtedness represents 143% of GDP. But is you net these gross liabilities off against our overseas assets, the picture is far more sanguine. Our net IIP is -$182 bln or $36,520 per capita and less than 60% of GDP. Ten years ago it was 80% on a net IIP basis, 158% on a gross liabilities basis.

RECORD PUBLIC DEBT
The RBNZ is reporting that the level of gross Government debt was $100.8 bln as at the end of May. This is the first time ever it has exceeded $100 bln. But separate monitoring shows it has subsequently risen to $101.1 bln as at today or 32.5% of GDP.

LOWER RETAIL SALES MOVED ONLINE DRAMATICALLY
The Marketview report on online sales in May shows dramatic changes. It was another huge month, up +50.1% year-on-year. For domestic purchases it was up +93% while international transactions were down -9% on that basis. These shifts happened while overall retail spending fell -13%.

JOB TRACKING
From employer IRD filings (and so one month in arrears), Stats NZ reports that in the week before the alert level 4 lockdown began and non-essential businesses closed, there were over 2.216 million paid jobs. This fell to 2.108 million in the last week of alert level 4, before rising back to almost 2.199 million jobs in the week ending 17 May 2020. That all suggests so far few Kiwis have actually lost their employment - at least while the subsidies are in place. (It does not measure pay levels.)

AUSTRALIA UPDATE
Infections are rising in Australia too. In Australia, there have been 7370 cases (+23 since this time yesterday), 102 deaths (unchanged) and a recovery rate of just over 93% (up). Cases seem to be rising faster than the officials can update their data. A fourth Victorian school has ben locked down.

GLOBAL UPDATE
The latest compilation of Covid-19 data is here. The global tally is now 8,153,200 and up another +138,000 from this time yesterday. This is still rising at a faster pace than recently. (And a reminder, when this tally exceeds 10 mln, we plan to give up reporting the number daily.) American cases rose by +23,000 since yesterday to 2,136,000. They are just not getting on top of their outbreak. US deaths now exceed 117,000 rising by 1000 per day. Global deaths now exceed 441,000, rising by about 4000 per day. Beijing is closing schools again too.

CONCLUSION JUMP
China has banned imports of fresh salmon.

TRADE PULLBACK
Japanese exports fell -28% in May from a year ago, imports were down -26%, both all-time record declines.

EQUITY MARKET UPDATES
Last night equity markets were energised by promises of more very large stimulus. European markets rose for than +3%, Wall Street was up +1.9%. It is kind of like a feeding frenzy. But today, Shanghai isn't buying; it is down -0.3% at the open. Hong Kong and Tokyo are also lower as well. The ASX200 started today up, but is now falling. The NZX50 Capital Index however didn't get the local memo, it has followed Europe up and is heading for a +2.3% gain today.

SWAP RATES UPDATE
Swap rates probably rose again at the long end today, but unlikely at the short end. We don't have wholesale swap rates movement details yet but we will update this later in the day if they show a significant movement. The 90-day bank bill rate is still at 0.27%. The Aussie Govt 10yr has dipped -2 bps to 0.91%. The China Govt 10yr is little-changed at 2.87%. The NZ Govt 10yr yield is  firmer, up +2 bps at 0.85% in a rising trend. The UST 10yr is down -4 bps since this time yesterday at 0.73%.

NZ DOLLAR LOWER
The Kiwi dollar is lower that at this time yesterday to 64.4 USc. Against the Aussie we are firmer at 93.8 AUc. Against the euro we are softer at 57.1 euro cents. That means the TWI-5 has slipped to 69.2.

BITCOIN STABLE
The price of Bitcoin is unchanged today at US$9,444. 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 ».