A review of things you need to know before you sign off on Friday; many floating rate rises, some TD hikes, factories contracting now, political poll update, China suffers huge momentum retreat, swaps unchanged, NZD firm, & 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
More floating rate changes came through today. The most interesting was from ANZ who only raised their by +40 bps, the lowest of all the main banks. Westpac added 45 bps. Cooperative Bank added +40 bps like ANZ but their resulting floating rate came in lower than any big bank except Kiwibank. Among the big banks, after these adjustments, the difference between all five is now down to 39 bps, from 44 bps previously. More here.

TERM DEPOSIT RATE CHANGES
Rabobank raised all its term deposit and savings account rates. Their one year offer is now 4.15% and the highest of any bank. ANZ, Westpac and the Cooperative Bank all raised savings account rates, but only Coop Bank's Step Saver went up +50 bps. Xceda Finance raised all their term deposit offers.

UNDERMINED
New Zealand's factories are now contracting. The June PMI recorded a shift from expansion to contraction. Worryingly, this was driven by retrenchments in new orders and production levels. The demand side of manufacturing is clearly losing momentum. Troublesome logistics and the unreliability of supply chains were much more commonly reported than the odd account of improvement.

JULY POLL SHIFTS
The July Taxpayers Union/Curia political poll shows National and Luxon slipping but still ahead, Labour and Ardern rising, Act at 10% and the Maori Party showing the biggest move up even if they are well below the 5% threshold.

MAJOR MOMENTUM FAIL
China has reported bad economic activity levels for the June quarter, worse than the poor ones expected. And remember, these are the official data. GDP fell -2.6% in the June quarter from the March quarter, and that undermined the year-on-year expansion to just +0.4%, well below the expected +1.0% and miles lower than the March level of +4.8%. China's goal of a 2022 expansion of "about 5½%" is now lost. The upcoming Party Congress is likely to be a dour affair with a dark economic shadow hanging over it (the date for this Congress hasn't been set yet).

RETAIL REBOUND
China's weak GDP result is after they reported a surprise rise in retail sales for June. the +3.1% year-on-year increase for June easily beat market estimates of a flat reading and shifting from a -6.7% drop in May. The latest figure marked the first increase in retail trade since February, as consumption recovered following a drop in pandemic lockdown restrictions.

COAL IS THEIR ANSWER
After sliding all year, China says its electricity production rose sharply in June, up +1.5% from year ago levels after May was down -3.3% on the same basis. June's coal production, used mainly to fire up electricity generators, was up +15%. China is said to be considering swallowing its pride and start buying Australian coal again - mainly because local production is unsustainable at current levels. China's climate goals are a massive case of greenwashing - ditto Australia.

SWAP RATES FLAT
Wholesale swap rates may gone sideways today. The 90 day bank bill rate was up +5 bps to 3.10%. A week ago it was 2.68% so a +42 bps rise. The Australian 10 year bond yield is now at 3.44% and down -4 bps from this time yesterday. The China 10 year bond rate is now at 2.82% and little-changed. And the NZ Government 10 year bond rate is now at 3.68%, down -2 bps from this time yesterday and now slightly below the earlier RBNZ fix for this bond which was down -1 bp to 3.69%. The UST 10 year is now at 2.95% and down -1 bp from this time yesterday.

EQUITIES SLIDE
The S&P500 ended its Thursday session down -0.3%. That's a -2.8% retreat so far this week. Tokyo has opened up +0.6% in late morning trade and if this holds it will end the week down -0.4%. Hong Kong has opened down -0.7% in their early Friday trade building to a -4.0% weekly loss. Shanghai is flat in early trade today and on the way to a -1.7% weekly fall. The ASX200 is down -1.0% in early afternoon trade heading for a -1.4% weekly. The NZX50 is down -0.5% in late trade wiping out all the prior weekly gains and heading for a -0.3% fall.

GOLD WEAK
In early Asian trade, gold is down -US$14 from this time yesterday, now at US$1716/oz. We should note that it closed in New York at US$1710/ox, and in London at just US$1701/oz, so this is something of an intra-day recovery.

NZD FIRM
The Kiwi dollar has had a minor +¼c rise from this time yesterday, now at 61.4 USc. Against the AUD we have risen a bit more to 90.8 AUc. Against the euro we up marginally at 61.2 euro cents. That means our TWI-5 is up +30 bps at 70.7.

BITCOIN FIRMS FURTHER
Bitcoin is now at US$20,691 and up +2.1% from this time yesterday. Volatility over the past 24 hours has been high at +/-3.2%.

This soil moisture chart is animated here.

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