A review of things you need to know before you go home on Tuesday; 95% LVRs, TD rate changes, bigger Govt surplus, foreign student's big win, new Meridian bond, swaps up, NZD stable

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

MORTGAGE RATE CHANGES
No changes to report today. But NZCU Baywide has changed its lending policies to accept just a 5% deposit, and lend 95%. Its lending cap will rise to $600,000.

TERM DEPOSIT RATE CHANGES
FE Investments has trimmed its one year rate to 4.50%. General Finance has added a new nine month rate of 2.25%, and raised both its four and five year rates by +100 bps to 5.75%.

STATE WORKERS THE BIG WINNERS
The ten month financial results for the Government shows a OBEGAL surplus of +$3.4 bln and an operating surplus of +$6.5 bln. Income tax collected from idividuals is up +7.3% compared with the same ten months to April 2017, income tax collected from companies is up +6.3%. GST is up +5.3%. Road User Charges are up +6.9% but Fuel Excise is up +0%. That adds up to overall "sovereign revenue" rising +$4.1 bln. On the cost side, "transfer payments and subsidies" are up +3.4%, but state employee remuneration is up +6.3% on the same basis.

GATE OPENED WIDER
The new Government has rolled over to accept the education industry's key marketing pitch. Its new policy would triple the amount of no-strings work time degree-level students would enjoy in this country. One would imagine this will create coalition tension.

LIKELY SOURCE IDENTIFIED
New analysis by Keith Woodford shows that European semen is the likely source of the mycoplasma bovis cattle disease, and this helps explain its rapid spread.

ANOTHER CORPORATE BOND OFFER
Meridian Energy said it is likely to make an offer of up to NZ$200 mln of seven year unsecured, unsubordinated fixed rate bonds to institutional and New Zealand retail investors. You can see all secondary market details for New Zealand bonds here.

LITTLE AUCTION PRICE CHANGE EXPECTED, BUT ...
There is another dairy auction tomorrow morning and the futures market suggests prices will be unchanged in US dollars. However, since the last auction on May 16, the NZD has appreciated by +2.5%.

SMALLER DEFICIT
In Australia, their March quarter current account deficit shrank by +AU$4 bln to -US$10.5 bln. However, that was not quite as good as markets were expecting which was a -$9.9 bln quarterly deficit.  Stronger goods exports (minerals) were behind the improvement. The miss had virtually no impact on their currency.

ME TOO
Australian national carrier Qantas has rolled over to Chinese Orwellian demands that it not refer to Taiwan, Hong Kong or Tibet as 'countries'. Just about every other airline has too.

BENCHMARK INTEREST RATES RISE
Local swap rates are up by +1 bp for a two year duration, up +3 bps for five years, and up +4 bps for ten years today. The UST 10yr yield is holding from this mornings level at 2.94%. The Aussie Govt 10 yr is now at 2.76%, up +7 bps from Friday. The China 10 yr is at 3.69%, up +4 bps. And the NZ Govt 10 yr is also up +4 bps to 2.81%. The 90 day bank bill rate is down -1 bp to 2.00%.

BITCOIN HOLDS
The bitcoin price is now at US$7,464, unchanged from this time on Friday.

NZ DOLLAR UP
The NZD is up to 70.4 USc. However we are slightly lower against the Aussie at 92.1 AUc, but up against the euro at 60.2 euro cents. That has the TWI-5 now at 73.2.

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