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
None here either.
The new Government's first full Budget was out today. It brought no real surprises. You can read all the details and our reviews here. Of note is that the detail on who is paying tax, by tax bracket, has been dumped (it was the only place you could get this detail). The operating surplus is lower in the next year than the current one, and future rising surpluses all rely on a Trumpian +3% growth forecast. These strong forecasts give cover for sharp rises in spending, up +7.8% in next year to $102.3 bln. Health is up +10.2%, Social Welfare is up +6.0%, and Education is up +4.1%. The extra spending impulse is +$7.4 bln (about +2.8% of GDP) but of course will be larger as the multiplier effect gets going.
NO BIG PAYDOWN
Treasury papers show that Government debt will be paid down by $-3.2bln in the next budget year, but over the next four years there will be net new issuance of +$2.9 bln taking the level to $77.1 bln in the 2022 year.
PRODUCER PRICE RISES MELLOW
New Zealand producer prices rose less than expected in the year to March. Input prices were up +4.2% while output prices were up +3.5%.
ALMOST HALF IS TAX, AND THAT'S ABOUT TO RISE
Petrol prices, even discounted petrol prices, are now at their highest level since October 2014. The cost of crude oil has been given a boost recently, including by the falling NZ dollar. The proportion of taxes in the price you pay is now 45.0%. A year ago it was 49.0%, but the amount of tax per litre of U91 was changed from $0.917 then to $0.936 today. In some parts of the country this will be the lowest tax load we see in our lifetime.
Australia posted another small gain in labour force participation, taking it to 65.7% which for them is a "record high". (New Zealand's is 71.2%.) Unfortunately for them, this drawing of more workers into their labour force has resulted in a small rise in their jobless rate to 5.5%. The good news however is that 32,700 new full time jobs were added in April, while -10,000 part-time jobs were shed.
BENCHMARK INTEREST RATES JUMP FURTHER
Local swap rates rose strongly again. The two year is up +2 bps, the five year is up +3 bps, and the ten year is up +4 bps, the long end getting a push up following the Budget release. The UST 10yr yield rose in trading to 3.09%, then after Wall Street closed it rose to 3.10%, and more recently to 3.11%. The Aussie Govt 10 yr is now at 2.90% (up +3 bps). The China 10 yr is at 3.74%, up +2 bps. And the NZ Govt 10 yr is up +4 bps at 2.87%. The 90 day bank bill rate is down -1 bp to 2.00%.
The bitcoin price is at US$8,360 which is a +2.4 rise from this time yesterday.
NZ DOLLAR FIRMS
The NZD is now at 69.3 US rising a noticeable +30 bps after the release of the NZ 2018 Budget. We are a little higher against the Aussie at 91.8 AUc, and at 58.5 euro cents. That has the TWI-5 back at 72.
This chart is animated here. For previous users, the animation process has been updated and works better now.