A review of things you need to know before you go home on Tuesday; PPI weak, farm expenses fall, inflation expectations don't fall, swap rates rise, NZD falls then jumps on RBNZ survey

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

TODAY'S MORTGAGE RATE CHANGES
There are no changes to report today.

TODAY'S DEPOSIT RATE CHANGES
NZCU Baywide raised their 15 month term deposit offer from 4.90% to 5.00% today.

PPI WEAK
Producer input and output prices sank -1.1% and -0.9% respectively over the March quarter as prices fell across most of the agricultural sector, and oil production prices were at a decade long low. These results were pretty much as markets were expecting, pushed down by petrol prices. Looking ahead, the outlook for price growth in the dairy sector remains weak, but petroleum prices are once again on the rise. However, with limited price growth across all other sub-sectors, producer price inflation is likely to remain weak throughout 2015.

FARM EXPENSE PRESSURE LOW
Nested within the PPI data is data on farm expenses. Excluding livestock, lower petrol and fertiliser costs mean that farm expenses are actually falling, for all types of farms.

THE WAREHOUSE PRICES BOND ISSUE
The Warehouse says an issue of five-year unsecured, unsubordinated, fixed rate bonds will pay investors an annual interest rate of 5.30%. That's the bottom of an indicative range of 5.30% to 5.55% the company had provided. The offer is expected to raise up to $125 million.

RELIEF RALLY
The RBNZ survey of inflation expectations saw rising data, although not by much. Markets however were concerned the data would show a fall in expectations and when they found the data went the other way, that had an immediate impact on the currency markets. The survey data rose from 1.80% to 1.85% from last quarter to this in the measure of inflation expectations in 2 years.

AUCKLAND A
ANZ reported today that job advertising data shows demand for labour remains steady, but Auckland is the only main centre in which job ads are still lifting. Total job advertising fell -0.2% in April. The trend in their job ads index has been quite flat of late. Taking a 3-month average to smooth through noise, total job ads are up +0.6% q/q and +3.5% y/y. Nationwide internet job advertising fell -0.9% in April. Newspaper job advertising lifted +5.5%, but remains below the levels prevailing at the end of last year. 

COMPETITION REVIEW
The Dairy Industry Restructuring Act, allowed for the merger of our largest dairy co-operatives to form Fonterra in 2001. The DIRA contains provisions to ensure competition in New Zealand’s farm gate and factory gate markets. These provisions are intended to expire when there is workable competition in the domestic dairy market and a review is underway to test this.

GREAT RETURNS
The NZ Super Fund is now at $29.32 bln, up +$1.78 bln since the start of 2015, according to their April report. Returns in April were +1.23% after tax, their second highest month result this year. And these results are after the Fund wrote off its dodgy Portuguese investment in March. If only KiwiSaver fund managers could do as well. The largest investment the Fund has is in Z Energy which accounts for 1.3% of the fund. This is the only investment over 1%.

WHOLESALE RATES RISE
Wholesale swap rates could not sustain yesterday's falls and rose back today following Wall Street's moves higher. There was also a steepening bias. Rates for one, two and three year terms were basically unchanged but were higher by +3 bps for 4 and 5 years, and higher by +5 bps for 7 and 10 year terms. Even the 90 day bank bill rate rose today, up by +2 bps to 3.50%. Yields on NZGBs in secondary markets fell about -4 bps however.

NZ DOLLAR YOYOS
The New Zealand dollar fell last night by more than 1c, but has regained almost all that today after being pushed higher by the release of the RBNZ inflation expectations data. As of late this afternoon it is at 74.2 USc, 92.8 AUc, 65.6 euro cents, and the TWI-5 is at 77.1, all levels these benchmarks were at at this time yesterday. Check our real-time charts here.

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