A review of things you need to know before you sign off on Tuesday; TD rates fall again, home loan affordability becalmed, Govt pushes austerity, house borrowers pay back more, Canada rejects Trump, swaps stable still, NZD too, & 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
There are no changes to report today. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Heartland Bank trimmed rates slightly today. AMP followed. Xceda Finance has also trimmed their rates, and sharply as risk premiums close up. Some big influences on where these rates are headed are discussed here. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

PEAK UNEMPLOYMENT?
The latest monthly filled jobs data for March has so far not shown any declines this year, which indicates the jobless level may have peaked or be close to it. If there are any gains, they are tending to be in the rural sector.

AFFORDABILITY BECALMED
Our home loan affordability report update says affordability is becalmed on a sea of economic uncertainty. Improvements in mortgage affordability for first home buyers ground to a halt in March as the market waits to see what happens next.

INCREASED FIREPOWER
Latest figures show the RBNZ now has $26.7 bln worth of cash for intervening if necessary in foreign exchange markets. It's still chump change to take on the big market-makers, but enough to start a nudge operation in the right situation. It is good to see this capacity still growing.

KEEN ON AUSTERITY, DESPITE THE RISKS
The Coalition government says it plans to reduce Budget 2025 spending by as much a -$1.1 bln. This comes after Treasury warned them Trump’s tariffs will slow our economic recovery and reduce government revenue

ACT BILL TARGETS 'BANKING WOKERY'
ACT Party rural communities spokesman Mark Cameron is peddling a members' bill that would remove the mandatory requirement for banks to make climate-related disclosures.This follows the introduction of a bill from NZ First in February that would require banks to lend to fossil-fuel sectors as the coalition partners battle for the affections of Federated Farmers.

PAYING MORE INTEREST, & PAYING DOWN MORE THAN REQUIRED
In the year to March, home loan borrowers paid $22.6 bln in interest, an +18% increase from the same period to March 2024. In the same year more than $16.5 bln was paid in repayments over and above the loan scheduled requirements (and excluding those who paid off their loan in full). This was +5% more than in the prior year.

BANK SWITCHING RISING
RBNZ data of March new lending for housing shows a sharp +41% rise from the same month a year ago to $8.1 bln. Even more impressive, 'new' lending that was just borrowers switch institutions was up +65% on the same basis. The average value of a mortgage being switched is an impressive $675,000 and while that is not a record high, it is near that series benchmark. But there were 3122 borrowers who switched in March, the most ever. The average value of a new purchase loan is $584,000.

CLOSING
Fonterra has announced that it will close its Hamilton "Canpac" facility. The site currently packs up to 4000 metric ton of powders per year, less than one per cent of the Co-op’s total product volume. Around 120 people currently work at the facility.

RECORD WITHDRAWALS
KiwiSaver early withdrawals reached a record monthly high $225 mln in March as more savers tapped funds for first homes and financial hardship.

NZX UPDATE
As at 3pm, the overall NZX50 index is down -0.3% so far today. That means it is down -0.4% for the past week, and down -7.7% since the start of the year, and up +1.2% from this time last year. Oceania, Skellerup, PFI and Precinct are rising today, but Argos, Summerset, Kathmandu and Heartland lead the decliners

TWO DIFFERING TRACKS. WMP OUT OF FAVOUR, SMP IN FAVOUR
The next full dairy auction is not until May 7 (NZT), so in between the last one and the next are two Pulse events, the next one tomorrow morning. Futures trading suggests the SMP price will hold (+0.5%?) and the best for 2025, but that we will see quite a big drop in the key WMP price, back under US$4000 and back to levels prevailing at the start of the year. This WMP signal means tomorrow's event will be closely watched.

FINTECHS IN REGULATORY SANDBOX
The FMA has chosen six fintech firms who will be testing their innovative products, services or business models in the FMA’s pilot regulatory sandbox. They are ECDD Holdings, Emerge Group, Homeshare, IndigiShare, Invest in Farming Co-op, Tandym. The FMA said, "We offered this pilot sandbox to spur innovation for both startups and established licensed financial institutions. We received 24 applications to be part of the sandbox and went through a thorough review process to determine which of the firms would be chosen to be part of the pilot."

CANADA WATCH
In Canada, polls have closed in the Maritime east, and in the big population states of Quebec and Ontario. Counting has started, and results will start to come in at 9pm EST (2pm NZT) but result trends will lag that. Early projections are that the incumbent Liberals will win but with an uncertain majority. That is an historic four-in-a-row. A few months ago this result was "unthinkable". But down-ticket, worth watching is the Greens vote. In 2019 they won 16.6% of the vote. In 2021 only 2.3%. This year in very early counting, it is under 1%. Long way to go, however.

DO YOU EVER WONDER ...
... why our 'leaders' all seem so foolish? All organisations tend to have a recurring problem: "Power attracts pathological personalities. It is not that power corrupts but that it is magnetic to the corruptible.” said Frank Herbert. Watch this for a reasoned insight. Voters themselves are attracted to people with easy, simple solutions. Repeated assertions of certainty ticks psychological biases among voters. Those who argue nuance, complexity and uncertainty end up like Socrates.

SWAP RATES STILL ON HOLD
Wholesale swap rates might be just a tad firmer at the short end today and rising across the longer durations. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -2 bps at 3.43% on Monday. The Australian 10 year bond yield is up +3 bps from yesterday at 4.19%. The China 10 year bond rate is down -2 bps at 1.64%. The NZ Government 10 year bond rate is up +1 bp at 4.52% while today's RBNZ fix was at 4.45% and down -3 bps from Monday. The UST 10yr yield is now just on 4.22% and down -2 bps from yesterday at this time. Their 2yr is down -7 bps at 3.69%, so that positive curve has risen to +53 bps.

EQUITIES FIRMER LOCALLY WEAKER REGIONALLY
The NZX50 is down -0.2% in late Tuesday trade. The ASX200 however is up another +0.8% in afternoon trade. Tokyo has opened up +0.4% in early Tuesday trade. Hong Kong is up +0.5% at its open, while Shanghai is down -0.1% at its open. Singapore has opened up +0.4%. On Wall Street, the S&P500 was up an insignificant +0.1% at the end although that was a recovery from an almost -1% earlier retreat.

OIL LOWER
The oil price is down -US$1.50 from yesterday at just over US$61.50/bbl in the US, and just on US$65.50/bbl for the international Brent price.

CARBON PRICE DROPS AGAIN
The carbon price is has fallen again today, down -$3 to NZ$45/NZU but on quite low volumes. That is its lowest since early June 2024. The next official carbon auction is on Wednesday, June 18, with a $68 floor price. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint. (We have fixed the charting error.)

GOLD FIRMS
In early Asian trade, gold is up +US$40from this time yesterday, now at US$3320/oz.

NZD HOLDS
The Kiwi dollar is up +20 bps from this time yesterday, now at 59.7 USc. Against the Aussie we are down -40 bps at 92.9 AUc. Against the euro we are down -10 bps at 52.3 euro cents. This all means the TWI-5 is still just under 68, little-changed from this time yesterday.

BITCOIN FIRMISH
The bitcoin price is up +1.1% from this time yesterday, now at US$94,657. Volatility of the past 24 hours has been modest at just on +/- 1.1%.

APOLOGIES
We are still fighting the commenting gremlin. As of writing we are still not sure what is causing it. We have tried many things, but it is still there. We are working our way through methodically. Hopefully sorted 'soon', despite the earlier optimism.

This soil moisture chart is animated here.

Keep abreast of upcoming events by 8ollowing our Economic Calendar here ».