A review of things you need to know before you go home on Wednesday; no retail interest rate changes, business cost pressures build, HNZ bonds popular, swaps and NZD little-changed, & more

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

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
None here either.

SETTLED
The dairy auction earlier today brought no change in overall prices in US dollars, but a -1.7% dip in NZ dollars. This is the fourth consecutive event where prices have basically held on to the large March jump. Fonterra said today that it will give a business update next Wednesday, and that will be where it sets its 'final estimate' of the current season's milk price, a milk season that ends at the end of May. ASB said today that the 2021-22 milk price might be as high as $8.20/kgMS. Where each analysts stands with this year's and next year's payout forecasts, is here.

COST PRESSURES BUILD
Business input costs are starting to move up in New Zealand, mirroring what is happening in other countries. In the March quarter they rose +2.1% higher than the December quarter, to be +1.8% higher than a year ago after the pandemic suppression. Output prices aren't rising as fast, up just +1.2% from a year ago. That absorption can only go on for so long before there will need to be a catchup. Interestingly, electricity costs were one area where pressure was high, up +21% year-on-year. Transport costs were up almost +10% year-on-year, featuring a +28% jump for "rail, water, air" transport. Road transport costs rose only +1.1% on the same basis. Remember, this data release is for the March quarter and the real impetus has come after that.

CAPITAL GOODS PRICES UP TOO
The cost of 'capital goods' isn't rising very fast, up just +0.6% from December, and up +1.9% from a year ago. The main pressure here is coming in the house building industry, with those up +3.4% in a year, and land clearing siteworks up +2.6%.

BUT NOT ON THE FARM
Farm operating expenses remain very much under control, except perhaps on dairy farms where costs (excluding livestock) are moving up faster than +2% pa.

HNZ BONDS POPULAR
Kāinga Ora/Housing NZ offered two sets of $50 mln in bonds today. The June 2025 attracted $191 mln in bids and was done with a yield of 1.18% pa. The April 2030 one attracted bids of $155 mln for an average yield of 2.19% pa. Both of today's yields are higher than the equivalent previous results. These issues benefit from a scarcity of bond supply generally. HNZ will only issue another $100 mln before the end of June 2021.

GOLD HOLDS STEADY
The gold price is now at US$1867 in early Asian trading and very little different from this time on yesterday. And this is very similar to the New York close earlier today at US$1869; London closed at US$1867/oz.

EQUITIES SHARPLY LOWER
The S&P500 fell away right at the end of Wall Street trading today, ending down -0.9%. Tokyo has opened -1.3% lower. Hong Kong is closed for National Day. Shanghai has opened -0.5% lower. The ASX200 is down a chunky -1.9% in early afternoon trade. The NZX50 Capital Index is down -0.9% in late trade.

SWAPS & BONDS LITTLE CHANGED
We don't have today's closing swap rates yet. If there are significant movements today, we will note them here later when we get the data. The 90 day bank bill rate is down another -1 bp at 0.34%. That is a -4 bps fall in a week. The Australian Govt ten year benchmark rate is down -1 bp since this time yesterday at 1.72%. The China Govt ten year bond is little-changed at 3.16%. And the New Zealand Govt ten year is down -1 bp at 1.90% but still above the 1.89% in the earlier RBNZ fix (-1 bp). The US Govt ten year is down -1 bp at 1.64%.

NZ DOLLAR MIXED
The Kiwi dollar has dipped today slightly and is now at 72.3 USc. Against the Aussie we have firmed marginally since this time yesterday to 93 AUc. Against the euro we are softer at 59.2 euro cents. That means the TWI-5 is holding at 73.7.

BITCOIN FLIRTS WITH $40K ON WAY DOWN
The bitcoin price is now at US$40,210 and down another -9.6% from this time yesterday. It is back to levels first reached in early January 2021. Volatility in the past 24 hours is back at extreme levels of +/- 6.5%. Update: Yes, it now has fallen to US$39,544, at 4:29pm.

This soil moisture chart is animated here.

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