A review of things you need to know before you go home on Thursday; no rate changes, eating out splurge, China visitors dominate, NZGB popular, AC sells, swap rates up, NZD higher

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
Nothing to report today.

EATING OUT IS HOT
Spending using electronic cards was up +4.9% in March from a year ago. But this masks even larger rises in core retail spending (which doesn't include vehicle related stuff) which was up +7.4% with the hospitality category up +9.9%. These are unusually high gains, the more so when you consider March 2018 had one retail-free day on Good Friday whereas March 2017 didn't have that. And in a sign of the times, the per unit values of transactions continues its slide into smaller and smaller transaction being put on cards. Visa and MasterCard (who sanitise their profits though tax avoiding Singapore arrangements) are both smiling.

CHINESE NEW YEAR BOOST
International guest nights rose +6.6% in February 2018 from February 2017, surpassing domestic guest nights for the first time in eight years. The numbers were boosted by international guests visiting over Chinese New Year, which was in mid-February this year, compared with late January in 2017. Overall and including domestic guest nights the data was up +2.1%. Occupancy rates stayed near the record highs posted in January.

HOT DEMAND, LOWER YIELD
The Government offered $200 mln in their latest tender for NZGB 2025s and bidders bid $603 mln. This demand pushed the yield down to 2.62% the lowest in 2018 (December 2017 was 2.56% for the same bond).

SELLING ASSETS
Auckland Council has signaled that it intends to sell seven properties it currently owns. The objective is "a more efficient property network", apparently. Obviously it doesn't collect rates on the properties it owns, but clearly will on these same properties if it sells them. They provided no indication of the value in that, or the expected cash that will be generated from the sale. Auckland Council is under debt and budget pressure.

NEW HOUSING FINANCE STILL RISING
In Australia, data out today shows that loan for the purchase of housing (dwellings) where up +4.3% in the year to February 2018 over the same year to February 2017. But refinancing existing dwellings was down -8% over the same timeframes. It is those buying newly build properties (houses and apartments) that are incurring most the new debt, which overall rose by +AU$10.3 bln to AU$253 bln.

MY GUESS WAS WRONG
I jumped the gun, it seems. (See yesterday's 'prediction'.)

BENCHMARK INTEREST RATES RISE
Local swap rates jumped for terms of 1 to 3 years, rising +3 bps for 1 year, +4 bps for two years, and +2 bps for three years. For longer duration, there was little change. The UST 10yr yield is now at 2.78%, down -1 bp. The Aussie Govt 10 yr is now at 2.69% (down -1 bp). The China 10 yr is also down -1 bp to 3.74% and the NZ Govt 10 yr is down -1 bp at 2.81%. But the 90 day bank bill rate is still going higher, up +2 bp, hitting 2.03% for the first time since February 2017.

BITCOIN UP
The bitcoin price is at US$6,930 which is a gain of +1.3% since this time yesterday. In Australia, cryptocurrency exchanges operating there will now come under the scrutiny of Australia's financial intelligence agency, AUSTRAC, and be monitored for money-laundering and terrorism funding activities. The new law gives AUSTRAC the powers to police digital currency exchanges trading in a variety of crypto currencies including bitcoin, Ethereum and Ripple.

NZ DOLLAR INCHES HIGHER
The NZD is up slightly at 73.7 USc. Ditto on the cross rates where we are almost touching 95 AUc again and at 59.6 euro cents. That puts the TWI-5 at 74.7.

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