A review of things you need to know before you go home on Thursday; Kiwibank cuts below 5%, GDP result scares economists, raw milk doesn't scare Govt, swap rates tumble, NZD falls

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

TODAY'S MORTGAGE RATE CHANGES
Housing NZ Corporation today cut its floating rate by -0.25%. Kiwibank has also announced fixed rate cuts, offering 4.99% for a two year term.

TODAY'S DEPOSIT RATE CHANGES
RaboDirect and HSBC both cut savings and term deposit rates today Rabo's cuts were all about -25 bps, whereas HSBC's key td rates were cut by -35 bps.

A BLIP? OR THE START OF THE END?
There was a moderate data earthquake today - 3.2 on the GDP scale. Markets were expecting +3.6% growth and +0.8% for the March quarter and have been seriously disappointed.  (Although ASB picked it.) Interest swap rates fell, as did the NZD. Economists reacted as a herd, racing out new bearish forecasts and expecting many more OCR cuts. The rural sector was the big drag, construction activity was positive, and the services sector was 'perky'. So whether the sudden lurch bearish is justified depends on the lens you look through.

MEASURING UNDERSUPPLY
New house construction is now nearly half the level it was twenty years ago. Residential investment's contribution to GDP reached a record $13.7 bln in the year to March 2015. But that is only 5.7% of GDP. Back in March 2005 it was 8.2% and March 1995 it was 9.5%. That lack of investment is causing the bubble in the 'values' of the built stock.

BOOMERS WIN AGAIN
The Government has decided to bend to the trendy suburban desire to 'buy raw milk from the farm' despite the known public health dangers. And the risk to New Zealand’s food safety reputation.

WELLINGTON OFFICE DEMAND
Office building owners and landlords in Wellington are to get an even tighter squeeze. 24 government agencies involving 8,700 staff have been identified as being able to be housed at lower cost, with projected cost reductions of at least $191 mln over the next 20 years. It won't only affect Wellington of course, but that is where the major impact will be felt. The drift of agencies to Auckland won't help either.

WHOLESALE RATES SOFT
Swap rates fell -6 to -8 bps today. And the 90 day bank bill rate was also lower another -3 bp today and is now at 3.25%. Bank economists seemed to react in unison predicting a new series of OCR rate cuts following the poor Q1 GDP data.

NZ DOLLAR UNCHANGED
The NZ dollar rose following the US Fed rate review early this morning. But that did not last - it gave up all those gains and a bit more after the Q1 GDP data was released. It is now at 69.1 USc, 89.4 AUc, 60.8 euro cents and the TWI-5 is now at 72.4. Check our real-time charts here.

You can now see an animation of this chart. Click on it, or click here.