A review of things you need to know before you sign off on Wednesday; flood of retail rate cuts, tractor drought, earnings downgrades, dairy prices suffer from USD pricing, ANZ changes its tune, swaps stable, NZD holds, & more

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

MORTGAGE RATE CHANGES
Late yesterday, Kiwibank basically matched the ANZ cuts. BNZ did so too today, but dipped their 18 month rate lower to 4.95%, the lowest rate for any term from any bank. Details here. The Cooperative Bank cut all its fixed rates too. As did Westpac. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Kiwibank has cut all its term deposit rates. ASB's cuts to savings rates became effective today. Heartland Bank cut all its rates and the Cooperative Bank cut all its TD rates as well. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

THE DCS IS ALMOST HERE
We have a detailed explainer about the Deposit Compensation Scheme (DCS) with comes into force on July 1, 2025, just 75 days from today, and well within the expiry date of most term deposits.

CAPITAL GAINS VANISH
We are near the end of the 2024/2025 real estate selling seasons and it hasn't been very favourable with lower asking prices, lower selling prices, high inventory available, and only slightly more sales volumes. And all this happened despite mortgage interest rates falling sharply. The number of properties withdrawn from sale has been high. More here.

POPULATION DATA UPDATE
Stats NZ released an updated population count as at December 2024, now incorporating estimates based on the 2023 Census for the first time. They say there were 5,311,100 people resident in the country then. More than 4 mln are in the North Island, although the South Island population is expanding a bit faster now. More than 20,000 people identified as something other than 'male' or 'female'. And the previously 'famous' man drought is almost over (and would have been but for more males emigrating in 2024 than usual).

TRACTOR DROUGHT
Farmers are buying fewer and fewer new tractors. There were only 136 sold in the month of March, the lowest for a march month in 25 years, and even lower than during either the pandemic, or the GFC.

THE LAW ON PUBLIC HOLIDAYS
MBIE is pointing out that Easter Sunday is not a public holiday. If you open, you can pay your staff their normal wage. They are not owed an alternative paid holiday. But Friday and Monday are public holidays. You can only require an employee to work on a public holiday if it’s written into their employment agreement and it’s a day they would usually work. Otherwise, you can ask an employee to work on a public holiday, but they don’t have to agree. If an employee works on a public holiday, they must get paid at least time and a half. If the public holiday falls on what is a normal working day for them, they must also get a paid day off at a later date.

TATS IN FOCUS
About a quarter of all Kiwi adults now have a tattoo. The EPA has opened an investigation into some of the chemistry in the tattoo inks because concerns have been raised about potential long term health effects of some.

NZX UPDATE
As at 3pm, the overall NZX50 index is up +0.6% today. That means it is up +3.2% for the past week, but down -7.6% since the start of the year, and up +2.3% from this time last year. Heartland, Infratil, Contact, and Channel Infrastructure lead the gains with Meridian, Serko, Freightways, and Hallenstein the main decliners

DOWNGRADE I
Air New Zealand has warned its profits may drop by as much as a third. The national airline is now forecasting pre-tax profits of between $150 mln and $190 mln for the current financial year.

DOWNGRADE II
Gentailer Mercury has cut its earnings guidance by -$40 mln. They say this is due to an expected 150GWh decrease in full year hydro generation to 3,400GWh owing to continued dry weather in the Taupō catchment, and projected below mean hydro inflows and lake level through to 30 June 2025. They say their dividend guidance remains unchanged at 24.0 cents per share and core capital expenditure guidance remains unchanged at $150 mln.

DAIRY PRICES 'RISE' OR 'FALL' DEPENDING FROM WHERE YOU VIEW THEM
The latest full dairy auction brought an overall rise of +1.6% in USD. However, the fall and fall of the USD has completely undermined this result, with prices in NZD falling -2.1%. In USD all categories except SMP rose, and demand was strong from "North Asia" (ie China). Milk fats were in demand, while global milk supply is waning in the major producers, underpinning the demand. Pity about the currency effect.

EYES ON CPI
Join us tomorrow for full coverage of the March quarter CPI result, one key factor for the May 29 RBNZ OCR review. It was 2.2% in the December quarter, and market expect little-change at 2.3%. But the recent impetus will also be closely watched.

ANZ NOT OPTIMISTIC
ANZ economists are thinking about the rest of 2025 and have changed their view and now see the RBNZ making additional rate cuts, taking it down to 2.5% by year's end. Then they see it rising back to a 'neutral' 3.0% in 2026. They also see weak house price changes.

'ALL IS WELL'
China claimed its economy grew at a +5.4% rate in Q1-2025 (real), the same rate as for Q4-2024. They said retail sales were up +5.9% (nominal) in March from a year ago, better than the +4.0% in February and the best rise since December 2023 which benefited from a low base. They also said industrial production was up +7.7% (nominal) in March, far better than the +5.6% expected and far better than the +5.9% February gain. Electricity production was only up +1.8% (real) year on year in March, so either they are making spectacular energy efficiency gains, or something other than electricity powers their industry, or something doesn't add up. Anecdotal reports from many regions don't paint quite the picture these official stats paint.

HOUSING NOT CONTRIBUTING
Meanwhile, Chinese new home prices in March edged lower from February, but there are range of changes in the 70 top Chinese cities. Still only Shanghai shows a year-on-year gain. Among the same cities, none show any gain for resales of existing houses and some declines are now as much as -11% (Jinhua, 7 mln population, and Tangshan, 7.7 mln).

JAM TODAY, NOT TOMORROW
Japan's February machinery orders rebounded sharply, rising well above market expectations for a modest +0.8% increase to its highest level in a year. Manufacturing orders rose +3%, while non-manufacturing orders jumped +11.4%. This rise matches the separate machine tool order data for March which was also up sharply. And these first see prosperity ahead; The Reuters Tankan sentiment index rose sharply in April. But the same firms surveyed were gloomy for the months further out in 2025.

SWAP RATES STILL ON HOLD
Wholesale swap rates are probably little-changed at the short end today again. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged at 3.49% on Tuesday. The Australian 10 year bond yield is up +2 bps at 4.34%. The China 10 year bond rate is down -2 bps at 1.64%. The NZ Government 10 year bond rate is down -1 bp at 4.66% from this time yesterday while today's RBNZ fix was also at 4.62% and down -5 bps from yesterday. The UST 10yr yield is now just on 4.33% and down -2 bps from this time yesterday. Their 2yr is down -2 bps at 3.82%, so that positive curve is still at +51 bps.

EQUITIES MIXED
The NZX50 is up +0.5% in late Wednesday trade. The ASX200 is up +0.3% in afternoon trade. Tokyo has opened down -0.7% in early Wednesday trade. Hong Kong is down -1.9%, while Shanghai is down -0.6% at its open. Singapore has opened up +0.4% in a further recovery. On Wall Street, the S&P500 ended its Tuesday down -0.2% in uninspiring trade.

OIL DIPS SLIGHTLY
The oil price is down -50 USc from yesterday and now just over US$61/bbl in the US, and just under US$64.50/bbl for the international Brent price.

CARBON PRICE DROPS
The carbon price is a sharp -$3 lower today, now at NZ$50/NZU. That is its lowest since August 2024. The next official carbon auction is on Wednesday, June 18, with a $68 floor price. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD HITS ANOTHER HIGH
In early Asian trade, gold is up +US$46 from this time morning, now at US$3266/oz, a new high.

NZD STOPS RISING
The Kiwi dollar is down -10 bps from this time yesterday, now at 59 USc. Against the Aussie we are unchanged from yesterday at 93.1 AUc. Against the euro we are also unchanged at 52.1 euro cents. This all means the TWI-5 is still at 67.6, unchanged from this time yesterday.

BITCOIN SOFTISH
The bitcoin price is down -1.2% from this time yesterday, now at US$83,927. Volatility of the past 24 hours has been moderate at just under +/- 2.0%.

This soil moisture chart is animated here.

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