A review of things you need to know before you go home Thursday; GDP underwhelms, OECD gives us advice, NZBA wants guidance, primary industries boom, NZGB tender strong, swap rates fall & flatten, NZD stable

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

MORTGAGE RATE CHANGES
Nothing to report today, either.

DEPOSIT RATE CHANGES
Nothing here either.

DISAPPOINTING NEARLY EVERYBODY
New Zealand's GDP result for the March 2017 quarter disappoint markets today. Most analysts were expecting a +0.7% quarterly gain, but it came in at +0.5%. The RBNZ had forecast a +0.9% rise. On an annual basis, the result was +2.5% rather than the expected +2.7%. Growth from the dairy sector manufacturing (but not exports) covered for a surprising fall in construction activity. Growth per capita was +1.8% pa.

THE OECD GIVES US ADVICE
The OECD has warned New Zealand on the vulnerabilities from Auckland house prices. It calls for housing densification and suggests a raft of measures to improve NZ's dire labour productivity. They want the RBNZ to have the DTI tool.

BANK GROUP SEEKS SUBMISSIONS ON CODE OF BANKING PRACTICE
Bank lobby group the New Zealand Bankers' Association is calling for public submissions on its review of the Code of Banking Practice. NZBA says it's proposing a new-look, principles-based Code to replace the current "quite prescriptive" Code that largely duplicates bank terms and conditions. Submissions are sought by July 26, with detail here. The five principles in the draft Code are that banks will:
- Treat customers fairly and reasonably
- Communicate with customers clearly and effectively
- Respect customers’ privacy and confidentiality and keep their banking systems as secure as they can
- Act responsibly when offering or providing customers with credit
- Deal effectively with customer concerns and complaints.

SERIOUS TRACTION
The official forecasts for export growth from our primary industries is very positive. The primary sector is forecast for a bumper year ahead after some challenging past seasons of wet conditions, earthquakes, cyclones, and volatile global commodity prices. Growth is expected to exceed +9% next year on top of this years +2.4%. Forestry is one strong contributor.

STRONG DEMAND, LOWER YIELD
The latest NZ Government bond tender has brought strong demand for their 2025 bonds with a coverage ratio of 4.3 times and weighted average yield of 2.62%. At the previous tender that yield was 2.70%, six months ago the equivalent yield was 3.13%.

AUSTRALIA IS MAKING GAINS
The Australian unemployment rate has fallen to its lowest level in four years after the biggest rise in a decade in the number of hours worked by Aussies. The data showed the strong jobs creation was all in full-time employment, with 52,100 full-time positions added to the economy while 10,100 part-time ones fell away. The AUD rose on the news.

WHOLESALE RATES FALL & FLATTEN
Following the signal from Wall Street, and reinforced by our own disappointing GDP result, wholesale swap rates have fallen and flattened today. The two year is down -3 bps, the five year is down -5 bps and the ten year is down -6 bps. In the perspective of the minimal changes over the past month, this represents a big market move. However, the 90 day bank bill rate is unchanged at 1.93%, which we should remind ourselves, is a record low.

NZ DOLLAR REMAINS STABLE
Despite the data disappointments, NZD is unchanged at 72.2 USc. On the cross rates, against the Aussie we are quite a lot lower at 94.9 AUc following the good employment report, and we are at 64.4 euro cents. The TWI-5 is stable at 76.3. To be fair, between this time yesterday and now, we have been a lot higher, but have now lost all those gains. And bitcoin has taken a hit as well and is now at US$2,509 which is US$2,789, which is -10% lower than at this time yesterday and its lowest two weeks.

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