A review of things you need to know before you go home on Wednesday; HNZ cuts rates, business confidence drops sharply, exports rise, power prices spike up, FHBs out in force, swap rates down, NZD drops

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

MORTGAGE RATE CHANGES
Housing NZ has reduced its one and two year fixed rates by -10 bps and -6 bps respectively.

TERM DEPOSIT RATE CHANGES
No changes to report here.

JUNE GLOOM
Businesses are not looking ahead positively. The Government can claim a bias, but this ANZ survey has gotten worse and worse as the year has gone on. When businesses were asked what they thought about business conditions in the year ahead, a net -39% of businesses were pessimistic, -12 points worse on one month and back at post-election lows. Even the "own activity" measure fell sharply, although it is still on the positive side. Retailers are the least positive, manufacturers the most.

MAY EXPORT HIGH
But on the trade front, Kiwi businesses are exporting more, especially those based on the rural economy. Exports were up +10% in May compared with the same month a year ago. Exports to China were up +27% on that basis. Dairy exports are our largest but these were up only +3%. Meat, logs, and fruit however all gained +17%, +26%, and +10% respectively on that year-on-year basis. All this delivered a larger trade balance in May than analysts were expecting of almost +$300 mln, three times the expectation and +50% more than in April.

POWER PRICE SPIKE
Wholesale electricity rates have spiked higher today, to their highest level since July 2017.

FIRST HOME BUYERS ARE OUT IN FORCE
For the first time since these records have been released by the RBNZ, first home buyers signed up to more than $1 bln in new commitments in May. That was +34% higher than in May 2017. Lending to investors is down -36% on the same basis. More here.

GREENWASHING MONEY
Auckland Council has successfully raised $200 mln in its first 'green bond'. Other than the funds raised will be for more trains, it is not entirely clear what a bond being 'green' really means. They will pay 3.17%. All that seems to have happened is the Auckland Council have paid a fee to the Climate Bond Initiative to be able to call them 'green'. Failure to meet its green credentials is specifically noted "is not an event of default". Greenwashing. Still I suppose if investors want that sort of superficial banding, why not take their money? Read the termsheet and see if you can see anything real about their greeness. An identical outcome would have resulted if this was a vanilla issue.

FRAUD INVESTIGATION STARTED
The RBNZ has issued a statement saying they and the Serious Fraud Office are investigating CBL Insurance."The Serious Fraud Office and Reserve Bank of New Zealand are each investigating matters relating to CBL Insurance and associated entities. The Reserve Bank is co-operating with the Serious Fraud Office investigation. The Reserve Bank is also co-operating with the Financial Markets Authority’s investigation relating to issues of market conduct and disclosure by CBL Corporation."

BETTER THAN FIRST CLASS
In England, details are emerging of "staggering spending" by top officials at the Bank of England. Staff parties cost £100,000. The travel costs of just three top managers, including the Governor, were £700,000 over two years.

BENCHMARK INTEREST RATES DOWN
Local swap rates are lower again today, with a -2 bps drop across the curve to five years, and a -1 bp drop for 10 years. The UST 10yr is now at 2.88%, down -1 bp. The Aussie Govt 10yr is at 2.64, up +1 bp, the China Govt 10yr is at 3.61% (unchanged), and the NZ Govt 10 yr is at 2.92%, down -1 bp. The 90 day bank bill rate is down -1 bp to 2.02%.

BITCOIN DOWN
The bitcoin price is now at US$6,078 which is -2.2% lower than at this time yesterday.

NZD LOWER
The NZD is still falling and now at 68.2 USc. That is a -¾c drop in one day. The poor business confidence data didn't help it. On the cross rate we are at 92.5 AUc and 58.5 euro cents, both lower too. That has dragged the TWI-5 down to 71.5, its lowest since November 20, 2017.

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