A review of things you need to know before you go home Wednesday; UDC investors say 'yes', no rate changes, dairy prices lower, petrol prices down, job ads up, rents go all directions, Aussies like us more, swaps slip, NZD holds

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

MORTGAGE RATE CHANGES
No changes today.

DEPOSIT RATE CHANGES
None here either. All quiet ahead to tomorrow's RBNZ OCR rate review.

LOWER DAIRY PRICES
A run of six consecutive gains ended at today's GlobalDairyTrade auction. Overall, prices were down -0.8% and that was lead by disappointing Whole Milk Powder prices with a -3.3% fall. Today, the derivates market for WMP took a bit of a beating, having signaled the auction result wrong.

UDC GIVEN GO-AHEAD TO PAY BACK INVESTORS EARLY
About 13,500 secured investors in UDC Finance have voted to approve early repayment of the $1.3 billion they are collectively owed assuming the proposed sale of UDC by current owners ANZ to a subsidiary of China's investment behemoth HNA goes ahead as planned. The measure was approved at a meeting that was not open to the media. In a brief statement, which gave no voting figures, UDC said the investors had passed the proposal, which would now allow UDC to wind up the existing debenture programme, expected to occur later this year. "When this happens investors will be able to choose whether their Secured Investments are converted into an equivalent product issued by ANZ Bank New Zealand Limited, repaid directly, or reinvested into a new UDC debenture programme, if available."

LOWER PETROL PRICES
The latest MBIE monitoring of pump prices for U91 petrol shows they are now at their lowest in six months with discounted prices averaging $1.7943/litre nationwide (what most people pay) and posted pump prices are averaging $1.9519/litre. The last time they were this low was in late November 2016. More than 90c in every litre purchased is tax of some sort. Diesel prices are falling too.

HIGH LEVERAGE, HIGH PROFITS
We now have all the data we need to complete our quarterly bank leverage review. That shows New Zealand's retail banks had $480 bln of assets (principally loans and advances to customers) and backed those assets with just $37.6 bln of shareholder capital. That means the industry is leveraged 12.6 times. The least leveraged bank is Rabobank (8.0x), followed by TSB Bank (11.6x). ANZ is the least leveraged main bank at 12.2 times. The most leveraged bank is Kiwibank at 17.5 times, followed by SBS Bank (15.6x). This data also shows that ASB has joined ANZ in earning tax-paid profits at an annual rate of more than $1 bln. That is a record high for ASB. Going the other way is BNZ. They were earning over $1 bln pa in mid 2015 but have slipped consistently since then to now be -15% lower now.

RENTS MOVE IN DIFFERENT DIRECTIONS
Trade Me data is showing housing rents up strongly in Wellington, flat in Auckland and declining in Christchurch.

NOT WHAT YOU MIGHT THINK
Job vacancies hit an all-time high level in May, according to the MBIE tracking of online job ads. In May, they were a remarkable +11.8% higher than in the same month a year ago. They track three internet job boards – SEEK, Trade Me Jobs and the Education Gazette. The reason for the strong demand can be found in two key industries - hospitality and construction, although seven of the eight industry groups in this survey report year-on-year gains (and interestingly, IT, accounting, and legal areas are the laggards). The very high demand is for semi-skilled and unskilled positions - again, demand for highly skilled workers is the laggard. And apart from Canterbury and Wellington, demand in every region shows double-digit growth on a year-on-year basis.

'BEST MATES'
Apparently we are the Aussies best friend. According to the 2017 Lowy Institute poll, New Zealand is Australia’s best friend in the world by a wide margin (53%, up 21 points since 2014), with the United States and the United Kingdom tied for second place (17% each). Only 8% say China is Australia’s best friend, 2% say Japan, and 1% Indonesia. Donald Trump has raised us up. And, a majority (53%) in Australia say the total number of migrants coming to their country each year is either ‘about right’ or ‘too low’ (down eight points since 2014). Four in ten (40%) say the number is too high.

MOST, BUT NOT ALL
The Commerce Commission has today released a study showing that 'nearly' 90% of the recent reductions in Chorus’ regulated wholesale broadband prices have flowed through to consumers.

PRICE FALLS
It is red ink across most stockmarkets today. The NZX50 is off with a -0.5% decline. Across the ditch the fall so far is -1.3%, led down by miners and banks. In Hong Kong they are down -0.5%, Singapore is down -0.9%, Shanghai is one rare market that is up +0.1%. Tokyo is also lower. All this follows the S&P500 which was down -0.7% last night.

WHOLESALE RATES REVERT
Yesterday's blip up has reversed today. We are now back to the same level we had on Monday. But the 90 day bank bill rate has stayed at 1.94%.

NZ DOLLAR UNCHANGED
Despite an earlier shift firmer, the NZD is now back to the same level it was at this time yesterday at 72.3 USc. On the cross rates, against the Aussie we are at 95.4 AUc, and we are at 64.9 euro cents. The TWI-5 is now at 76.8. And bitcoin is up another +3.3% on the day at US$2,770 today.

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