A review of things you need to know before you go home on Wednesday; no rate changes, current account surplus, IIP stable, gold exports rise, farm sales slip, Asia stocks stabilise, swaps and NZD unchanged

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

No changes again today.

None here either.

Our "current account deficit for the March 2018 quarter was $3 billion", Stats NZ said today. Or so their headline shouts. But a closer look at the data, the actual data, shows a +$182 mln surplus (yes, surplus, not a typo). And that is a better result than markets were expecting. All very confusing. It turns out the -$3 bln deficit is the seasonally adjusted number, not the actual number. Still confused? I am too. To get rid of the issue of seasonal adjustment, the current account deficit in the year to March 2018 was -$7.9 bln and that is up from -$7.2 bln in the same year to March 2017. So yes, it is a deterioration but a relatively minor one. As a percent of GDP, the current account deficit has gone from -2.7% of GDP to -2.8%. Sorry Stats NZ, I'm going with the actual numbers and for the March quarter they actually look quite positive. A -$0.4 bln goods deficit, a +$3.1 bln services surplus, and a -$2.6 bln primary & secondary account balance. In addition the capital account balance was an inconsequential -$26 mln deficit. The Financial accounts were +$126 mln surplus with marginally more foreign investment in here (+$1.9 bln) than New Zealanders invested overseas (-$1.8 bln). None of this needed a headline of a -$3 bln deficit.

At the same time, Stats NZ released its International Investment Position (IIP) data. That shows we owe the rest of the world -$408.5 bln which is only $10.6 bln more than in March 2017 (up 2.7%). Meanwhile, New Zealand assets held offshore are $252.4 bln, and that is +$7.5 bln more than in March 2017 (up 3.1%). The net deterioration is a movement of only -$3.1 bln in a year, and a net liability of $156.1 bln. (And our net exposure to financial derivatives went positive in the year.)

Another snippet from the balance of payments data is the gold export data. In the year to March 2018, we exported $556 mln of gold and that was the most since 2013.

Consumer confidence is slipping. According to the latest Westpac-MM quarterly survey, (which mirrors the ANZ-Roy Morgan monthly survey), consumers are feeling less upbeat these days.

And reinforcing the slipping consumer confidence, MBIE's job ads survey slipped too. But to be fair it was at a record high in April, and is still +4% higher than May 2017.

Farm sales
were probably stronger in May than many were expecting. There were 159 sales in May and that is nowhere near the falloff that some in the rural real estate industry are claiming. (PGG Wrightson, Bayleys.) Still, the May 2018 volume is almost -8% lower than May 2017. Apart from in Otago and Southland, there is no evidence that dairy farm prices/ha are falling either.

After taking a thrashing yesterday, Asian stock market indexes have generally stopped falling, holding their lower levels. But Shanghai is down another -0.5% in early trade. Both the ASX and NZX are up today.

Australian households received, on average, AU$76 more a week in government benefits – both cash and in kind – than they paid in extra taxes in 2015-16, an Australian Bureau of Statistics report released today has found.

Local swap rates are essentially unchanged. Any movement so far today has been on the firm side - the 10 yr is up +1 bps. The UST 10yr is now at 2.90%, back up +2 bps. The Aussie Govt 10yr is at 2.64, up +1 bp, the China Govt 10yr is at 3.60% (down -4 bps), and the NZ Govt 10 yr is at 2.92%, up +4 bps. The 90 day bank bill rate is down -1 bp to 2.01%.

The bitcoin price is now at US$6,601 which is a bit more than -$100 lower or -1.7% lower than at this time yesterday.

The NZD is a little higher this afternoon than where we opened this morning, but down from this time yesterday at 69.1 USc. We are little changed against the Aussie at 93.5 AUc and at 59.7 euro cents. That has the TWI-5 still at 72.7.

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

Daily exchange rates

Select chart tabs »
The 'US$' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
End of day UTC
Source: CoinDesk

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.


Gold mining brings in $556million a year in export revenue. It would be interesting to compare land area used per $billion in export revenue and see how mining compares with immigration, tourism, dairy and so forth. I think we may have it all backward. Immigration and tourism may be the big destroyers of rural land and natural habitat and mining not so much as we feverishly imagine. Think of the energy wastage involved in ferrying a million tourists around the world.

Problem with digging things out of the ground and selling it is it pushes up the exchange rate and makes everything else less competitive. Look at Saudi Arabia. Tourism is no picnic either.

Yes, It’s a shame that we export our gold, rather than use it as reserves.We will come to regret this as the next GFC breaks out. The Kiwi peso is backed by nothing but promises that that we will pay our ever increasing Debt levels.

... we could back the Kiwi pesos with the new gold we've discovered ... the one that only ever goes up in price , never falls , stalls or palls .... Orc Land house prices .... guaranteed to never let you down , mate !

GDP numbers tomorrow... I'm so excited I doubt if I'll sleep tonight.

Shhhhhh. Don't mention gold mining. Keep it secret otherwise the govt may ban it.... Shhhhhh.

Something which I notice is lots of very, very narrow job adverts. They'll make stipulations like "Must have more than 10 years management experience working in the public sector..." and as less than 15% of the workforce is in the public sector at any given time it means there are perhaps only a handful of people that would meet this restriction. It's operating a closed shop.

Employers need to advertise a role before appointing a migrant to show they were unable to fill that role with a local candidate. The guy who owns the Indian restaurant in my locality told me that he puts his incorrect contact details on these ads so that he can just tick the box and hire an Asian migrant.
What a shame unskilled jobs have grown at 2x the rate of skilled jobs.

Or they hire a UK Civil Serpent who is an expert in creating complex regulation that strangles private enterprise slowly but inexorably.

Call me a conspiracist but I think China is systematically undermining Fonterra, it's demise is the only way that they can gain control of dairy production in this country. It is the last bastion of NZ ownership of any significance.

China can be stopped.
All it takes is the enforcement of strong New Zealanders.

... is your wife chucking the old china at you too ...

Duck if she picks up the Temuka ... those buggers are solid plates ... they hurt ....