A review of things you need to know before you go home on Thursday; no rate changes, inflation timid, fewer beneficiaries, NZGB 2039s yield 3.39%, soil loss perspectives, wholesale rates rise, NZD slips

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

MORTGAGE RATE CHANGES
Nothing to report today.

TERM DEPOSIT RATE CHANGES
Nothing to report here either.

WORKING AGAINST EACH OTHER
The fiscal authorities have undermined the monetary authority's work to get inflation up the middle of the 1-3% band. Inflation fell to the bottom of the Reserve Bank’s inflation target in the March 2018 quarter, as the Government’s fees-free education policy drags on overall price gains. Inflation was up +0.5% in the quarter, but just up +1.1% over the year.

BENEFIT LOAD REDUCES
There are now just over two working adults for every person on a public benefit. That is the highest number in twelve years. In 1999 it was 2.2x, but after a brief improvement, it sank to just 1.7x in 2009 where it stayed until revised public policy managed to reverse the trend. It has been rising since 2011. Some beneficiaries are in work (WfF), but the largest beneficiary group are those on NZ Super (748,000), followed by those receiving the WfF tax credits (280,000), then JobSeeker Support (119,000), those on Supported Living payments (92,000), Sole Parent Support (58,000), and others (like student support, 3,300 but highly seasonal). Fortunately, the numbers of people employed in the workforce has grown quickly and now numbers 2,620,000. All numbers as at March 2018.

THE 2037's ARE BACK
The amount offered in the latest tender of the April 2037 Government Bond was higher than usual, at $200 mln. This tender drew bids of $529 mln, an average coverage ratio, and achieved a yield of 3.39% pa. That was +11 bps higher than the previous equivalent issue for this maturity nine months ago.

AN AUSSIE RECORD, BUT HO-HUM BY NZ STANDARDS
Labour force data out in Australia for March is being greeted positively with the news that their participation rate is at an all-time high at 66.3%. The rate for males is 71.1% (and miles below the record high of 80.1% achieved in 40 years ago) while the rate for females is a record 60.8%. While these are good levels, the equivalent data in New Zealand when it is released on May 2 are likely to be near the December levels of 71.3%, 76.7% and 66.2% (All, male, female) and far higher than for our cousins. The Aussie economy has added +1 mln new jobs in the past five years. (In the same time, New Zealand added +450,000, and a far higher proportionate level.)

KEEPING THINGS IN PERSPECTIVE
A key finding in today's MofE andStatsNZ report, Our Land 2018, is that 192 mln tonnes of soil are lost every year from erosion – 44% of this is from pasture. That is a lot even if most of the erosion happening is not from farmland. But the tyranny of big numbers is involved here; the annual loss from farmland is equivalent to just 6.6% of the volume of Rangitoto Island, a small if iconic Hauraki Gulf island. The annual loss from public parks and forests is 8.5% of Rangitoto. It would take almost 7 years for the equivalent of the annual loss of soils in New Zealand to equal the volume of Rangitoto - and that means the rest of the country remained untouched. For farmland erosion, it would take more than 15 years to equal one small Hauraki Gulf island. This is not to minimise the issue, but rather keep it in perspective. Most normal map features in New Zealand will be many times larger than Rangitoto. But the headline "192 million tonnes lost per year" sounds enormous without perspective. The world is big; New Zealand is big; the North Island is big; Great Barrier Island is enormous compared to Rangitoto (almost 100 times larger). Erosion happens. (For those interested in the numbers, we used a density of 1.6g/cm³ to convert tonnes of soil into m³ of land. Or a density of 0.625. It's a wobbly average.)

BENCHMARK INTEREST RATES RISE
Local swap rates are marginally higher today with the two year up +1 bp, the five year up +2 bps, and the ten year up +3 bps. The UST 10yr yield is now at 2.86%, (+3 bps). The Aussie Govt 10 yr is now at 2.77% (up +3 bps). The China 10 yr is down sharply again, this time by another -8 bps to 3.56%. This is something to watch as the China 10yr was 3.85% at the beginning of March and 3.78% at the beginning of April. The NZ Govt 10 yr is up +1 bp at 2.85%. And the 90 day bank bill rate is up another +1 bp to 2.06% today and steadily rising still.

BITCOIN RISES
The bitcoin price is now at US$8,180 which is +3.3% higher today.

NZ DOLLAR STILL INCHING DOWN
Apart from a brief push up after the CPI data was released, the NZD has resumed its softening trend. It is now at 73.1 USc. Ditto on the cross rates where we at 94.1 AUc and at 59.1 euro cents. That puts the TWI-5 at 74.2 and again just slightly lower than this time yesterday.

This chart is animated here. For previous users, the animation process has been updated and works better now.