A review of things you need to know before you go home on Tuesday; data disappoints anti-foreign buyer lobby, English says watch FSR, Crown surplus up, retail spending up, swaps retreat again, NZD lower

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

TODAY'S MORTGAGE RATE CHANGES
There were no changes announced today.

TODAY'S DEPOSIT RATE CHANGES
NZCU Baywide today cut some term deposit rates.

ONLY 3% ?
LINZ says 3% of home, farm and business buyers nationally were foreign tax residents in March quarter, while the same data set shows that 4% of buyers in Auckland were overseas tax residents. But these figures may be understated because of the portion of students and temporary workers who said they were NZ tax residents.

A HEADS UP
Bill English today offered a strong hint that tomorrow the RBNZ will use its lending control tools and place new restrictions on residential lending in an attempt to control a run-away housing market, especially in Auckland - all in the name of Financial Stability.

HEADING UP
For the nine months to March, Treasury reported the Government had a NZ$167 mln OBEGAL surplus. That is NZ$334 mln better than forecast. Core Crown tax revenue has been NZ$702 million better than forecast. The stronger performance owes to both higher-than-forecast revenue growth and spending coming in below expectations, a trend which is expected to continue through until the end of the fiscal year in June. If that happens, that will be two consecutive years of small surpluses.

CHUGGING ALONG FINE
ANZ's Truckometer survey for April shows the Heavy Traffic Index fell -2.4% (+1.1% 3m/3m) in April, while the Light Traffic Index, which leads growth in the economy by six months, was unchanged (+2.3% 3m/3m). The Heavy Traffic Index indicates that quarterly GDP growth was perhaps not as strong in Q1 as it was in Q4, but is not suggesting anything alarming. The strong upward trend in the Light Traffic Index remains, suggesting good momentum across the economy.

RETAIL SPENDING HIGHER
Retail spending using electronic cards was $4.8 bln in April 2016, up $348 mln or +7.8% from April 2015, Statistics New Zealand said today. Spending rose in five of the six retail industries, while the consumables industry remained relatively unchanged. The largest movements in April 2016 were: hospitality, up $13 mln (+1.5%), fuel, up $10 mln (+1.8%), vehicles (excluding fuel), up $9.8 mln (+6.5%).

GST LAW FOR ONLINE SERVICES PASSED
Overseas purchases by New Zealand residents of services and other intangibles such as music bought through offshore providers, will be subject to GST from October 1, following the passing of the Taxation (Residential Land Withholding Tax, GST on Online Services and Student Loans) Bill in Parliament today.

UP FROM HERE?
ANZ's monthly inflation gauge for April was also out today. ANZ noted, "Annual inflation in the Gauge ticked up to +1.9%, the firmest rate of increase so far this year, but still one of the lowest we’ve seen overall. We can see some real – albeit tentative – evidence that we are past the trough in terms of the inflationary pulse, given pockets of inflation from housing. However, it’s early days, and we are wary of drawing strong conclusions. Housing is but one pocket of inflation, and our ex-housing gauge is weak to say the least."

DEFLATION RETREATS
Chinese consumer prices rose +2.3% pa in April, bang on what the market was expecting and that makes it three consecutive months that this key marker has been at this level. Deflation no longer seems to be stalking China. (If you believe their numbers, of course.)

EQUITIES GAIN OR HOLD
Most regional stock markets are up today, and that includes Shanghai which is back in the back, just. Tokyo is sharply higher. Sydney is higher too, despite the thrashing the big miners took overnight on the London market.

LANDLORD STRESS
In Australia, rents across the country fell -0.2% over the last year, continuing the headache for landlords as rental prices log their slowest increase in more than two decades. The CoreLogic data came amid a warning that the state of their property market means landlords won’t be able to lift rates and will possibly need to slash rental prices further to keep their tenants.

SWAP RATES RETREAT
The small bounce we saw yesterday was given back today with swap rates lower by -3 bps across the curve. NZ swap rates are here. The 90-day bank bill rate is lower too, down -1 bp to 2.35%.

NZ DOLLAR LOWER
The NZD fell last night as the USD rose and commodity-based currencies were marked down a little. In today's currency trades, little more was added to the markdown and it has been level-pegging in the local session. The Kiwi dollar is now at 67.5 USc, 92.1 AUc, 59.3 euro cents. The TWI-5 is now at 70.9. Check our real-time charts here.

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