A review of things you need to know before you sign off on Friday; ASB cuts too, traffic slow, retail weak, more FLP draws, NZ & AU talk more usefully, swaps firm, NZD unchanged, & 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
ASB cut its 1 and 2 year fixed rates. More here. Kāinga Ora/HNZ raised its floating rate by +42 bps to 5.85%, and their 1, 3 and 5 years fixed rates

TERM DEPOSIT RATE CHANGES
WBS (Wairarapa Building Society) raised all its TD rates from 3 months to 2 years.

QV SEES THE RETREAT TOO
According to QV, the average value of homes is down more than -$50,000 nationally since January. Auckland values are down by almost -$100,000. Auckland, Wellington and Palmerston North are experiencing the biggest fall in value.

TRAFFIC WEAKNESS WEIGHTS ON Q2 GDP
ANZ's Truckomer traffic monitoring shows the Light Traffic Index (cars) fell -3.4% in June, while Heavy Traffic (trucks) fell -2.7%. The new public holiday may have caused a bit of noise in the data. Q2 data is now complete; ANZ says the Heavy Traffic Index suggests it’s a line ball call whether GDP managed to grow at all in the quarter. To then that suggests a chance of a technical recession, given the economy shrank 0.2% in Q1. But there are lots more GDP indicators to come.

A MAJOR FOOT TRAFFIC PROBLEM
Retailers say rising operating costs like wages and freight, staff shortages and lack of foot traffic were the key pressure points on retailers in the June quarter. On average, across the sector, prices increased by around +6% in the last quarter with a similar outlook for Q3-2022. More than 70% of retailers increased prices in the last quarter at an average of 6%. Looking ahead more than +80% of retailers will be increasing prices in the next quarter – again at an average increase of +6%. This suggests that high inflation will likely continue through the rest of the year.

UPDATED
We have updated our rent charts with the latest MBIE data to the end of May, here, here and here.

'A MORE ENDURING SOCIAL & ECONOMIC INTEGRATION'
The NZ and AU Governments are talking about our mateship. Apparently the prime ministers discussed changes to the situation of New Zealanders in Australia including ways to streamline New Zealanders access to Australian citizenship, with agreement to identify options by ANZAC Day 2023.

IN LINE
Federated Farmers President Andrew Hoggard has been re-elected unopposed. But they have a new vice-president, Golden Bay dairy farmer Wayne Langford. The VP position is where Fed Farmers find their next President.

FROM 'ACTING' TO PERMANENT
The FMA has confirmed the appointment of Margot Gatland as its new Head of Enforcement, a role she has been in on an acting basis.

GUILTY PLEA
The Serious Fraud Office has got a guilty plea from an Auckland property investor charged with fraudulently obtaining millions of dollars in home loans. They alleged Viki Cotter and three others deceived banks into providing them with loans for the purchase of residential properties. All four originally plead not guilty. The case against the other three proceeds.

STILL DRAWING ON THE FLiP
Another [unknown] bank drew another $350 mln on their FLP (Funding for Lending) credit line at the RBNZ (currently priced at 2% and likely to rise to 2.5% next week). This latest draw takes the total funds lent in the FLP to $12.7 bln, a long way below the $28 bln the RBNZ allocated. But the FLP was an emergency facility, and you could [easily] argue there is no financial or funding emergency any more.

MORE GLOBALLY IMPORTANT STIMULUS
Reports that Chinese officials are working on a NZ$360 bln stimulus package "with unprecedented bond sales" that has boosted sentiment and sparked a recovery in raw materials - especially coal.

ABE SHOT
If you haven't heard, the former Japanese Prime Minister has been shot campaigning. The assailant was detained almost immediately. Abe probably won't survive the assault. The yen fell. Gun crime is extremely rare in Japan.

SWAP RATES FIRM
Wholesale swap rates have risen slightly again today, maybe by about +3 bps, and well below offshore moves in bond rates. The 90 day bank bill rate was up a chunky +5 bps to 2.90% today as the OCR review gets closer. The Australian 10 year bond yield is now at 3.50% and up +7 bps from this time yesterday. The China 10 year bond rate is now at 2.86% and unchanged. And the NZ Government 10 year bond rate is now at 3.66%, up +2 bps from this time yesterday and now just below the earlier RBNZ fix for this bond which was down -2 bps to 3.67%. The UST 10 year is now at 2.98% and up +8 bps from this time yesterday, although in between it did get as high a 3.02%.

EQUITY PRICES MOSTLY FIRM
The NZX50 is ending Friday up +0.5% on the day, up an unusual +3.9% for the week. The ASX200 is heading for a daily rise of +0.5% as well, and a weekly rise of +2.1%, which itself isn't bad. Tokyo is up +1.4% in Friday morning trade, heading for a +3.0% weekly gain. Hong Kong is up +0.3% in early trade and if that holds it will close the week flat. Shanghai is flat in early Friday trade, heading for a -0.5% retreat for the week. The S&P500 ended its Thursday session up +1.5%, and for the three trading days this short week is up +2.0% so far.

GOLD SETTLES
In early Asian trade, gold is up +US$2 from this time yesterday at US$1742/oz. Earlier it closed in New York at US$1740.oz and earlier again in London at US$1748/oz.

NZD LITTLE-CHANGED
The Kiwi dollar is little-changed from this time yesterday, still at 61.8 USc. Against the AUD we are -½c lower at 90.3 AUc. Against the euro we up +20 bps firmer at 60.8 euro cents. That means our TWI-5 is little-changed at 70.5.

BITCOIN RISING
Bitcoin is now at US$21,989 and up +7.2% from this time yesterday. Volatility over the past 24 hours has been extreme at +/-5.4%.

This soil moisture chart is animated here.

Keep ahead of upcoming events by following our Economic Calendar here ».