A review of things you need to know before you sign off on Monday; its all about the scorching inflation data, student & working visas rise, big drop in house values, swaps up sharply, NZD firms, & 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
Heretaunga Building Society raised its floating rate by +40 bps.

TERM DEPOSIT RATE CHANGES
TSB increased its 6 month TD rate by +30 bps to 3.05%, higher than any main bank, but still behind Heartland's 3.40% and Rabobank's 3.50% for the same term.

SORCHING INFLATION 'DEMANDS 3 MORE +50 BPS HIKES'
The latest inflation figures have come in even hotter than economists and the Reserve Bank had forecast, hitting 7.3%, the highest since 1990. The higher-than-expected result had ANZ's economists saying the RBNZ would keep hiking until the OCR reaches 4% now by the end of 2022, especially if the jobs market stays as tight as it currently is. Wholesale markets have +65 bps priced in for the August MPS review.

SERVICE SECTOR EXPANDS FASTER
Unlike the factory sector which is now contracting, our service sector expansion got quicker in June, according to the BNZ-BusinessNZ Services PSI survey. Activity/Sales, Employment, and New Orders are all running above their long-run norms. But results are very uneven. Retail had a huge surge that may not be sustained, and wholesale, transport and the FIRE sector went backwards fast. But as BNZ notes, despite the unevenness, it is a result that counters claims that we are heading toward recession.

RBNZ LAUNCHES ANOTHER LEVER
The RBNZ will launch a new funding facility on Wednesday it says will 'improve the anchoring of wholesale short-term interest rates at the Official Cash Rate (OCR)'. It is a scheme designed to try keep shorter-term wholesale rates (particularly those that come from short-term FX swaps) closer in line with the OCR. Some wholesale participants are sceptical it will make much impact, especially as there has been another scheme running for a while aimed at something similar. The new SRF will be prices at OCR minus 15 bps, to maximum of $5 bln per trading day.

THE TIDE IS TURNING
Overseas student numbers starting to pick up again, and more working holiday visas are being issued. This turn up in visas issued comes as the numbers actually here is still declining. The number of overseas students here is now at its lowest level since 2008. The working visa numbers

LOADS MORE REGULATORS
The FMA will add about 100 people its current 242 permanent employees under a "change programme" is says it is working on. Personnel expenses are expected to rise by almost $11 mln in the new year to just under $50 mln. (pg 13.) With a new British boss, 'more people' for a more prescriptive style of regulation is probably no surprise. But to be fair, the FMA has been given is new wider load of duties by Parliament. Its budget (within MBIE) has been increased by +25%.

APPEAL FAILS
In 2018, the Department of Internal Affairs brought its first ever AML/CFT criminal charges against Jiaxin Finance, its sole director Qiang Fu and his mother Fuqin Che, after Jiaxin Finance failed to keep adequate records and report suspicious transactions by Canadian businessman Xiao Hua Gong, also known as Edward Gong, which totalled over $53 million. On conviction in the Auckland High Court, Jiaxin Finance was sentenced to pay a fine of $2.55m. Mr Fu was sentenced to pay a fine of $180,000, and Ms Che was sentenced to pay a fine of $202,000. Jiaxin Finance, Mr Fu and Ms Che appealed their convictions to the Court of Appeal. Now the appeal has been dismissed.

ANZ BULKS UP
ANZ Group has agreed to buy Suncorp Bank. But even after this transaction, it will remain the smallest of Australia's four pillar banks

INFRATIL SCORES BIGGER
Infratil (IFT, #8), who along with Brookfield, now own Vodafone NZ, said they had sold Vodafone's cell towers into a new company, and they are keeping 20% of that new company. It sold them for $1.7 bln. Given they and Brookfield paid $2.1 bln for Vodafone NZ, this is a huge windfall. Recently Spark sold 70% of its cell tower network for $900 mln.

GOING BACKWARDS
The RBNZ reported today that the total value of all houses in the country as at March was $1.7 tln, down -$39.8 bln in three months. This is the largest quarter-on-quarter fall ever recorded, and that is only through March. The local house price falls didn't really get going until Q2, and we won't know the level of that until September 15.

RETREATING AGAIN
Last week the NZX50 capitalisation fell by -0.5%. But the energy sector did manage to rise, up +0.8% in a week to be 'only' -7.3% down for the past 12 months (compared with the overall -12.9% decline for the who 50 stocks). Starring in the energy sector last week was Contact (CEN, #7) up +2.0%.

SWAP RATES UP
Wholesale swap rates may risen sharply today, perhaps by about +8 bps. But a high RBNZ sectoral model core inflation outcome could give them a late session push higher. The 90 day bank bill rate was up +1 bp to 3.11%. The Australian 10 year bond yield is now at 3.45% and down -2 bps from where we opened this morning. The China 10 year bond rate is now at 2.81% and little-changed. But our the NZ Government 10 year bond rate was at 3.71% before our system froze, and now below the earlier RBNZ fix for this bond which was up +3 bps to 3.74%. The UST 10 year is now at 2.92% and down -3 bps from this time Friday.

EQUITIES RISE
The NZX50 is up +0.2% near the end of trading today. The ASX200 is up +0.9% in mid-afternoon trade. Tokyo has opened its week up +0.5%, Hong Kong is recovering last weeks big loss, up 2.2% at its open. And Shanghai is up +1.2%. The S&P500 futures index is up +0.3% ahead of Wall Street's open.

GOLD FIRMISH
In early Asian trade, gold is up +US$6 from this morning, now at US$1715/oz.

NZD WITH MINOR GAINS
The Kiwi dollar has risen +30 bps from this morning, now at 61.9 USc. Against the AUD we have risen a bit less to 90.9 AUc. Against the euro we little-changed at 61.2 euro cents. That means our TWI-5 is now just under 71 and a +20 bps gain today.

BITCOIN FIRMS
Bitcoin is now at US$21,312 and up +1.1% from where we opened this morning. Volatility over the past 24 hours has been moderate at +/-2.2%.

This soil moisture chart is animated here.

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