A review of things you need to know before you go home on Tuesday; both mortgage and TD rate changes, confidence rising, credit card use shifting, few new tractors, swaps rise and steepen, NZD hold, & more

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

MORTGAGE RATE CHANGES
The Chinese-owned ICBC Bank has cut its 12 and 18 month fixed rate to a very competitive 2.15%. It has raised its 3 and 4 years rates but both are still under 3%. Their new 'higher' five year rate is only 3.19%.

TERM DEPOSIT RATE CHANGES
ICBC has also raised its 9, 12 and 18 month TD rates to 1.10% pa (or 1.15% for a $50,000 deposit). The Treasury has raised the interest rate they pay on risk-free Kiwi Bonds. For the one year term, it has risen from 0.1% pa to 0.2% pa. (Not a typo.) For a four year term, it has risen from 0.4% pa to 0.6% pa. Anything other institutions offer above that is an indication of institutional risk.

MOST MORE CONFIDENT
Westpac is reporting that consumer confidence is on the rise, based on broader economic conditions and is expected to continue over the year ahead. While confidence among those aged over 30 is now back around average levels, confidence among younger New Zealanders remains low they say. Wellington and Southland are the most confident regions; Taranaki and Northland the least.

CREDIT CARD BALANCES NOT RECOVERING
Users owed $6.246 bln on their credit cards at the end of May, which incidentally was the same amount owed on them at the end of 2013. Most of the sharp COVID-induced drop in April 2020 hasn't really been recovered. Not only have these balances shrunk, but the proportion incurring interest is now down to 57%. The decline is accelerating but in fact it has been shrinking over the past 10 years (when it reached 70%). Unregulated Buy-Now/Pay-Later will have a lot to do with the atrophying of credit card debt. The losers here are banks who fund this debt (and pay taxes in New Zealand).

CREDIT CARDS STILL BEING USED MORE
We may have smaller credit card balances, but we are still using them more for transactions. We ran $3.67 bln of transactions through these cards in May. Obviously that was a huge jump from the pandemic-affected month a year ago. But it was also +3.6% higher than for May 2019. The main beneficiary of these transactions are Visa and Mastercard who clip each transaction - and shelter those earnings in tax havens like Singapore.

UPSKILLING THE CONSTRUCTION INDUSTRY
The Construction Sector Accord is funding the development of a benchmarking scheme to improve business performance for construction specialist trades, as part of its work to lift business performance in the construction and infrastructure sector.

FEW NEW TRACTORS
For a third month in a row, the number of new tractors added to the farming fleet is again close to zero. In March, there were only 23, April only 13, and May also only 13. In 2019 for those three months was 627. Lack of shipping space is undoubtedly inhibiting this trade.

SCOTT ST JOHN JOINS ANZ NZ BOARD
Scott St John, the former First NZ Capital CEO, has been appointed to ANZ New Zealand's board of directors, subject to a non-objection from the Reserve Bank. St John replaces Tony Carter who retires from the board in August. St John is chairman of Fisher and Paykel Healthcare, and a director of Fonterra and Mercury Energy. ANZ NZ's board is chaired by ex-prime minister John Key.

INDONESIA NOW HAS 2 MLN CASES
Indonesia is another country fighting a surge in COVID, made worse by the Delta variant.

SYDNEY ON KNIFE-EDGE
In Sydney, the case numbers keep going up, but NSW Health authorities still say their Delta outbreak is still basically under control. The travel bubble with NSW is still operating.

GOLD FIRMS
Compared to where it ended yesterday, the gold price is up another +US$16 and now at US$1788/oz in early Asian trading.

EQUITY MARKETS RECOVER
The S&P500 ended the earlier Wall Street session up +1.4%. Tokyo has opened up +2.9% and making back much of yesterday's -3.3% dive. Hong Kong has opened up +0.1% while Shanghai is up +0.7% in very early trade. The ASX200 is up +1.5% in early afternoon trade while the NZX50 Capital Index is up +0.2% in late trade. ATM (#10), FPH (#1) and SPK (#3) are the large gainers today. TPW (#41), MCY (#12) and CNU (#14) are the primary decliners today.

SWAP & BONDS YIELDS TURN STEEPER AGAIN
Swap rates are rising again today, and steepening. The 2 year is up another +3 bps, the three year is also up +3 bps, the 5 year up +4 bps and the ten year up +6 bps. The 90 day bank bill rate is up +1 bp at 0.34%. The Australian Govt ten year benchmark rate is up +2 bps at 1.53%. The China Govt ten year bond is down -1 bp at 3.12%. The New Zealand Govt ten year is up +6 bps at 1.82% and still above the earlier RBNZ fix of 1.80% (+5 bps). The US Govt ten year is up +6 bps to 1.48% and reversing much of yesterday's drop.

NZ DOLLAR HOLDING LOW
The Kiwi dollar is little-changed from this time yesterday at 69.7 USc although it did rise to 70 USc at one point in between. Against the Aussie we are still at 92.7 AUc. Against the euro we are still at 58.6 euro cents. That means the TWI-5 is now almost unchanged at 72.3.

BITCOIN SINKS
The bitcoin price is now at US$32,853 and down -6.2% from where we were at this time yesterday. It had got down to US$31,179 at one point and close to where we started 2021. Volatility in the past 24 hours has been extreme at +/- 6.9%.

This soil moisture chart is animated here.

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