A review of things you need to know before you sign off on Tuesday; minor rate changes ahead of the OCR review, net immigration loss, visitor growth modest, farmers glum, swaps waiting for RBNZ, 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
ICBC cut its 2-year fixed rate today. They were matched by the same change by China Construction Bank.

TERM DEPOSIT RATE CHANGES
Nothing here so far.

STILL LEAKING PEOPLE
There was a net permanent migration loss of -800 people in May (about the population of Kaitangata). For the year to May, the loss was -10,700 (about the population of Hāwera). The yearly shifts include +20,300 NZ citizens arriving permanently, -22,600 citizens leaving permanently, +27,100 non-citizens arriving, and -35,500 non-citizens departing permanently.

WHERE ARE THE WORKERS?
A recent survey of Auckland EMA members showed that 100% of responding employers with vacancies were struggling to fill them, with almost 40% of employers advertising for more than six months. The survey had 335 businesses respond, mostly from the manufacturing, transport, construction, health, and retail sectors, including 50 different sectors and industries. EMA members say there is a serious shortage of New Zealanders to fill vacancies, recruits are costing more, and staff poaching is on the rise.

ONLY A THIRD HAVE RETURNED SO FAR
In May 72,755 visitors arrived for a short stay, up from 54,300 in April, and up +26% from year-ago levels. But the May 2022 levels are still -146,000 lower than the May 2019 levels, so full recovery is a very long way off yet.

A POST-PANDEMIC LOW
Spiraling costs for a host of key farm inputs, including fuel, fertiliser, feed and labour, have driven a sharp drop in sentiment among the nation’s food producers, and farmer confidence is now at its lowest level since the start of the Covid-19 pandemic in early 2020, the latest Rabobank Rural Confidence Survey has found. The survey which was completed late last month found net farmer confidence was significantly lower from last quarter. The proportion of farmers expecting conditions in the agricultural economy to improve in the coming 12 months had fallen to +13% (down from +24% last quarter) while the percentage expecting conditions to worsen rose to -48% (up from -27%). A total of 38% were anticipating the agricultural economy to remain stable (down from 46% previously).

WHAT TO EXPECT
Tomorrow at 2pm the RBNZ will advise the results of its latest OCR review. A +50 bps is almost universally anticipated taking the OCR to 2.5%. If there is any 'surprise' it will be in the outlook. Westpac (Imre Spizer) notes that a “neutral” scenario (the least likely to disturb the market) comprises a +50 bps hike, and a statement signaling that the economy is evolving as expected. A dovish scenario comprises a +50 bps hike, and a statement which emphasises the downside risks to the global economy. The 2-yr swap rate could fall -15 bps in response. A hawkish scenario comprises a +50 bps hike, and a statement which emphasises its concerns about high inflation and that inflation expectations could remain elevated. The 2-yr swap rate could rise +15 bps in response.

CONFIDENCE SLIPS IN AUSTRALIA
The widely-watched NAB business confidence survey shows it fell to a below-average +1 index point in June, as global uncertainty, looming interest rate hikes and inflation continued to cloud the outlook in Australia. Fears over these impacts on Aussie household consumption were particularly evident with confidence in the retail sector taking a significant hit. This business confidence slip is mirrored in a Westpac consumer confidence survey also out today for June.

EARTH'S DEMOGRAPHIC DESTINY
The United Nations says the world population will hit 8 bln in November and grow to around 8.5 bln by 2030 and 9.7 bln by 2050, before reaching a peak of around 10.4 bln people during the 2080s. The population is expected to remain at that level until 2100. Two-thirds of the projected increase through 2050 will be driven by the momentum of past growth that is embedded in the youthful age structure of the current population. And part is from declining death rates - birth rates are falling too.

PROTEST PUT DOWN WITH VIOLENCE
Check this record of the Chinese bank protests, and the official response. The police didn't hold back. You have to be brave (or desperate?) to protest in China.

SWAP RATES HOLD
Wholesale swap rates may be on hold today. The 90 day bank bill rate was up +4 bps to 2.97% today as tomorrow's OCR review gets closer. The Australian 10 year bond yield is now at 3.43% and down -13 bps from this time yesterday. The China 10 year bond rate is now at 2.84% and down -1 bp. And the NZ Government 10 year bond rate is now at 3.71%, unchanged from this time yesterday and still just above the earlier RBNZ fix for this bond which was up +1 bp to 3.70%. The UST 10 year is now at 2.96% and down -13 bps from this time yesterday.

EQUITY PRICES MOSTLY LOWER AGAIN
The S&P500 ended its Monday session down -1.2%. Tokyo has started its Tuesday session down -1.7%. Hong Kong is down -1.3%. And Shanghai is down -0.6% in early trade. The ASX200 is up +0.2% in early afternoon trade. The NZX50 is down -0.2% in late trade.

GOLD DOWN
In early Asian trade, gold is down -US$6 from this time yesterday, now at US$1735/oz.

NZD LITTLE-CHANGED AGAIN
The Kiwi dollar is about -½ USc lower from this time yesterday at 61.2 USc. Against the AUD we are +-½ firmer at 90.9 AUc. Against the euro we firm at 61 euro cents. That means our TWI-5 is little-changed at 70.4.

BITCOIN SLIPS AGAIN
Bitcoin is now at US$19,931 and down -2.8% from this time yesterday. Volatility over the past 24 hours has been moderate at +/-2.4%.

This soil moisture chart is animated here.

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