A review of things you need to know before you go home on Thursday; no rate changes; overseas trade; base erosion profit shifting; retail markets; bond tender; rates lower; bitcoin lower; NZD holds

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.

OVERSEAS TRADE
Overseas trade data, released today, showed a trade surplus of $263 mln, with $5.1 bln in exports and $4.8 in imports. Kiwifruit exports rose $197 mln or 82% on a year-on-year basis. The other main contributors to April’s export rise were meat and edible offal, up $94 million, and milk powder, butter, and cheese, up $68 million. Lamb, up $42 million, led the rise in meat exports, closely followed by beef, up $41 million. Butter led the rise in dairy exports. The leading contributor to the rise in imports was an increased value of petroleum and products, up $221 million or 56 percent. Vehicles, parts, and accessories, up $179 million, and mechanical machinery and equipment, up $108 million, were the other main contributors to imports rise.

BASE EROSION PROFIT SHIFTING
New legislation to improve the fairness of the tax system and prevent large multinationals from exploiting rules in order to shift their profits offshore has passed another step closer to becoming law. The Taxation (Neutralising Base Erosion and Profit Shifting) Bill passed through its second reading in Parliament. Detailed debate will continue when Parliament resumes in June. The changes will prevent multinationals from using BEPS strategies, including artificially high interest rates on loans from related parties to shift profits out of New Zealand, related-party transactions which are intended to shift profits to offshore group members in a manner that does not reflect the actual economic activities undertaken in New Zealand and offshore, hybrid mismatch arrangements that exploit differences between countries' tax rules to achieve an advantageous tax position, artificial arrangements to avoid having a taxable presence or a permanent establishment in New Zealand and tactics to stymie an Inland Revenue investigation, such as withholding relevant information that is held by an offshore group member.

RETAIL MARKETS
The latest Retail NZ Retail Radar report shows that 58% of retailers either hit or exceeded their targets in the March 2018 quarter. This means that 42% did not meet targets as a result of low consumer confidence in a highly competitive market. However, retailers are still confident and three-quarters expect to meet target in the coming quarter. The ‘liquor’ and ‘electrical and electronic goods’ category had the strongest growth, and declines were seen for ‘motor vehicles and parts’ and ‘recreational goods’. In terms of prices, a third of the retailers expect prices to rise due to higher wage costs in production and retail and higher freight costs due to higher fuel prices.

APRIL 2025'S BOND TENDER
The New Zealand Debt Management Office conducted a tender to $200 mln worth of April 2025 bonds. The bonds attracted 38 bids with a total value of $797 mln. Of these, 13 bids were successful in bidding for the bonds at a weighted average accepted yield of 2.56%. The lowest accepted yield was 2.5550% and the highest accepted yield was 2.5650%.

WESTPAC CONDUCT
The Federal Court in Australia has dismissed ASIC's case that Westpac manipulated one of the country's most important interest rates, but found the bank engaged in unconscionable conduct. Justice Jonathan Beach said there were four occasions where Westpac traders had acted with the dominant purpose of influencing the bank bill swap rate, which amounted to unconscionable conduct, but he was not convinced they had successfully manipulated the price in these instances.

CBA'S SUPERANNUATION STING
The Commonwealth Bank plans to slug superannuation and pension fund members with a hefty fee to fund the cost of regulatory compliance, in a move described as an "out-and-out gouge" by Financial Services Minister Kelly O'Dwyer. The bank this month wrote to members of its flagship superannuation fund Colonial First State, informing them they'll be charged a "regulatory reform fee" in June 2018.

TARIFFS ON CAR IMPORTS
The Trump administration is considering adding a 25% tax on imported cars in the US on the basis that vehicle and parts imports were threatening the industry's health and ability to research and develop new, advanced technologies.

BENCHMARK INTEREST RATES SLIP/FLATTEN AGAIN
Local swap rates are lower and flatter today, with the short end down -1 bps and the long end down -3 bps. The UST 10yr yield has also slipped -6 bps to 2.99% today. The Aussie Govt 10 yr is now at 2.80% (down -5 bps). The China 10 yr is at 3.68%, down -2 bps. And the NZ Govt 10 yr is down another -5 bp to 2.78%. The 90 day bank bill rate is down -2 bps, back to 1.98%.

BITCOIN LOWER
The bitcoin price is now at US$7,616 which is down -3.8% from this time yesterday.

NZ DOLLAR HOLDS
However, the NZD is also stable at 69.2 USc. We are little changed against the Aussie at 91.6 AUc, and up slightly against the euro at 59.1 euro cents. That has the TWI-5 now at 72.1.

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