A review of things you need to know before you sign off on Friday; regional banking hubs fail, Rio pays up finally, lending growth limp, savers prioritise TDs, swaps ease back, NZD unchanged, & more

Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).

MORTGAGE/LOAN RATE CHANGES
None here today, so far. But some banks are offering juicy incentives rather than lower rates. You can stay up-to-date with these offers here.

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here either. But we should note that Liberty Financial has had their investment grade credit rating raised one notch to BBB. More here.

HOLIDAY SCHEDULE
We will be publishing normally each day this weekend, but will only have holiday service on Monday, a public holiday. Full service will resume Tuesday, June 4, 2024.

REGIONAL BANKING HUB TRIAL FAILS ON LOW DEMAND
The five largest banks said today they will extend their current commitment not to close regional branches for the next three years, as part of the conclusion of the regional banking hubs trial. That trial did not show much demand. In fact, demand for these physical services with hub usage was lower than many comparable regional branches or ATMs.

NO MORE RIO STANDOVER TACTICS
Rio Tinto strikes a 20-year deal to keep the Tiwai Point aluminium smelter running after signing an electricity supply agreement with Meridian Energy, Contact Energy and Mercury NZ. Those supplying companies claimed the price is materially higher than in the transitional agreement.

LOTS OF BIDS BUT MOST MISSED OUT
More than $1.1 bln was bid at today's two NZGB tenders for the $500 mln on offer. But only three bids were successful. One bidder scooped up all the May 2031 $275 mln at a yield of 4.67% pa. Two weeks ago the yield for this maturity was 4.46%. Just two bidders took the $175 mln May 2034 offer, at 4.81% pa. Two weeks ago the yield was 4.57%.

LENDING GROWTH LIMP
Prior to the pandemic, the five year average of home lending growth was +$1.2 bln in April from March. In April 2021 it was almost +$3 bln. In April 2022 it was +$1.4 bln. But in April 2024 it was only +$879 mln but at least this was better than the April 2023 +$577 mln. Lending growth to businesses and the rural sector also remain very limp.

MONETARY POLICY FIREPOWER RISES
We should especially note that more than 45% of the total home loan book is now scheduled to be rolled over within the next year (including floating). That's an eight year high. That is $163 bln of home loans that will get a prompt signal if home loan rates change (either way).

STILL PILING IN TO TDs
Household bank deposits grew +$956 mln in April from March. This is modest from an historical perspective. But household term deposit growth was +$1.5 bln in the same period. That extra was shifted from equally from transaction and savings accounts.

FANCY STADIUM WITHOUT RATEPAYER FUNDING (?)
Auckland Council has dumped out two of the "downtown stadium" project options, including the sunken Bledisloe Wharf option. This council is trying to achieve an endurable multi-purpose stadium option without having to commit any funding. The finalists are the Te Tōangaroa/Quay Park option (near Spark Arena), and an upgraded and covered Eden Park.

JAPAN DATA MIXED
Japanese retail sales made good gains in April, up +2.4% from a year earlier and above the +1.9% rise expected. But som eof this was catchup from the modest +1.1% rise in March. But Japanese industrial production was little-changed in April, a hesitation after their large +4.4% rise in March from February. Still, they have some more recovery required to peg back the prior declines.

CHINA PMIs STAY WEAK
After two months of small expansions, the official China factory PMI contracted in May. A small expansion was expected again in May, so this will be a disappointment. Meanwhile their official services PMI is still expanding, but at an unchanged and low rate.

SWAP RATES SOFTER
Wholesale swap rates are likely to be a bit lower today. Our chart below will record the final positions. The 90 day bank bill rate is still unchanged at 5.63%, a level it has hovered around for more than 70+ days. The Australian 10 year bond yield is down -6 bps to 4.45%. The China 10 year bond rate is now at 2.33% and up +2 bps. The NZ Government 10 year bond rate is down -8 bps at 4.88% from yesterday and the earlier RBNZ fix was at 4.82% and down -10 bps from yesterday. The UST 10yr yield is down -8 bps from yesterday at 4.54%. Their 2yr is now at 4.93%, so the curve has shifted to be more at -39 bps inverted.

EQUITIES LOOK AT A WEEKLY RETREAT
The NZX50 is up +1.1% in a late recovery today but is on track to end the week down -0.9%. The ASX200 is up +0.5% in afternoon trade, but if this holds it will also end its week down -0.9%. Tokyo has opened up a minor +0.2% and heading for a -1.7% weekly retreat. Hong Kong is up +1.1% in early trade which aims to end the week down -0.9%, while Shanghai is up +0.3% which would enable it to claim a +0.2% weekly gain. Singapore is up +0.3% at its open. Wall Street ended its Thursday trade down -0.6% with a late session fade.

OIL FALLS
The oil price is -US$1.50 lower from this time yesterday, now just on US$77.50/bbl in the US, and down a bit more at just on US$81.50/bbl for the international Brent price.

GOLD FIRM
In early Asian trade, gold has risen +US$13 from this time yesterday, now at US$2343/oz.

NZD UNCHANGED
The Kiwi dollar is little-changed from this time yesterday at 61.2 USc. Against the Aussie we are unchanged at 92.3 AUc. Against the euro we are unchanged at 56.6 euro cents. This all means the TWI-5 is still at 70.4.

BITCOIN FIRMS SLIGHTLY
The bitcoin price has firmed today, now at US$68,558 and up a bit less than +1% from this time yesterday. Volatility of the past 24 hours has been modest, at +/- 1.8%.

This soil moisture chart is animated here.

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