A review of things you need to know before you sign off on Wednesday; only minor retail rate changes, dairy prices better than officially indicated, HWEN recommendations revealed, Dalio the DGM, swaps up, NZD stable & more

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

MORTGAGE RATE CHANGES
NBS (Nelson Building Society) raised its variable rate by +50 bps to 6.45%. The Police Credit Union raised their by +39 bps to 5.44%. Heretaunga Building Society raised their floating rate to 6.10% along with their fixed rates.

TERM DEPOSIT & SAVINGS RATE CHANGES
Hastings-based Heretaunga Building Society also raised their TD rates by +10 bps.

BETTER THAN REPORTED
This morning's dairy auction was probably stronger than originally reported. The dominant WMP price rose from US$3934/t at the auction two weeks ago to US$4158/t this time, a +5.7% rise and one suggested by the derivatives market. That is a +5.7% rise, and far above the one the GDT people reported of -0.3% which was caused by "a drop-off of index prices in contracts three through five" (in other words, an historical adjustment). The real gain is the +5.7% change. And all this was done with Chinese buyers notable in their absence. When they return, they will add demand into a supply-constrained situation.

LOST ITS WAY?
Fonterra has launched a buy-back offer for their shares as its share price languishes. It will fund up to $50 mln for buying back its own shares to combat a market 'undervaluing' its shares. Companies that do this type of thing are signaling they have lost their way, and have few answers to enhance their value - other than a buy-back.

FARMERS MAKE THEIR RECOMMENDATION
The Primary Sector Climate Action Partnership (HWEN) has sent to the Government their plan to control and reduce agricultural greenhouse gases, backed up by overwhelming farmer support. The dairy industry in New Zealand is in an odd situation compared with all its international rivals; it is a dominant sector here so its emissions are large for us. But those rivals have the same or 'worse' emissions in their dairy industry but that industry is dwarfed by much bigger industrial and population emissions so the dairy 'share' there is tiny and tends to be a second- or third-level issue attracting far less scrutiny. But if NZ can nail it, we could end up with the best of both worlds. The Government now needs to consider these recommendations and will make a final decision in December 2022.

SURPLUS 'COMMITTED'
The Finance Minister says he's 'committed' to achieving a Budget surplus by 2025. He says he is 'confident about the resilience' of our economy, but warns supply chain issues could persist into next year.

ADMITTING FAILURE
The Ports of Auckland says it will write off $65 mln it has spent on an automation plan, a six year effort in its container terminal that has now been judged won't deliver the planned improvements. Meanwhile the world's top ports are automating successfully. The World Bank has been surveying the efficiency of 370 of the world's major container ports, and the results are not good for New Zealand. Among others, Tauranga ranks about 325th and Auckland ranks about 350th. Even just among "Oceania", Auckland is the worst-ranking facility. No New Zealand port looks efficient in this survey, the best being Wellington ranked #151 and still near the bottom half.

CENTRAL BANKS TO REVERSE COURSE IN 2 YEARS?
In an interview with The Australian Financial Review, billionaire Bridgewater founder Ray Dalio and overseer of more than US$1 tln of funds, said stagflation – low growth and high prices – will force central banks to cut rates again in 2024.

SWAP RATES STEEPEN
We don't have today's closing swap rates yet but they have probably firmed. The 90 day bank bill rate is unchanged today at 2.52%. The Australian 10 year bond yield is now at 3.51% and unchanged. The China 10 year bond rate is now at 2.82% and down -1 bp. The NZ Government 10 year bond rate is now at 3.76%, and up another +4 bps from this time yesterday and matching the earlier RBNZ fix for this bond which was up +6 bps and also at 3.76%. The UST 10 year is now at 2.99% and and down -6 bps from this time yesterday, but it has risen from this morning.

EQUITIES RISE
On Wall Street they finished with a flourish, with the S&P500 up +1.0% at the end of their Tuesday trade. Tokyo has opened today also up almost +1.0% and approaching its 2022 highs. Hong Hong is up +2.0% in their early Wednesday trade. Shanghai is up +0.6% in early trade. The ASX200 is up +0.8% in early afternoon trade. The NZX50 is up a lesser +0.3% in late Wednesday trade.

GOLD RECOVERS
In early Asian trade, gold up +US$9 from this time yesterday to US$1849/oz. But it has been higher in between. Gold's cheerleaders weren't so upbeat in May.

NZD HOLDS LOWER
The Kiwi dollar has moved up a little, now at 64.8 USc. Against the AUD we are still at 89.7 AUc after the RBA-induced adjustment. Against the euro we are holding at 60.6 euro cents. That all means our TWI-5 is still lower at 71.8.

BITCOIN BOUNCES
Bitcoin is now at US$31,066 and up +6.2% from where we were this time yesterday. A yo-yoing pattern around US$30,000 is developing. Volatility over the past 24 hours has been high at +/- 3.5%.

This soil moisture chart is animated here.

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