A review of things you need to know before you go home on Thursday; ASB shakes up FHB mortgage market, lack of inflation a headache, housing market ready to turn lower, swaps stable, NZD unchanged, & more

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes announced today. But ASB has done away with its 'Standard' rates, reverting to a single low rate card. (However their low equity premiums will still apply.)

TERM DEPOSIT RATE CHANGES
None here today.

RBNZ's INFLATION HEADACHE
Inflation was +1.5% in the year to June, but declined -0.5% in Q2-2020. Economists see the Reserve Bank having to do much more in future with its quantitative easing program after it turned negative in this latest quarter. Neither the bond or currency markets reacted to today's outcome.

STILL AN EXODUS?
New Zealand residents have been leaving the country at a greater pace than they have been arriving back, according to the official May migration data.

TURNING POINT
"The worm seems to have turned for property values in the main centres" and heading for a fall, says CoreLogic.

THE NEW NORMAL
The June Marketview online sales report shows that spending at domestic online merchants was up +34% from the same month a year ago, while spending at offshore sites fell -10% on the same basis. The net result is a fast shift to online retailing although not as fast as we had in the locked-down April and May months.

LOWER FOREIGN INVESTMENT
For the first time in more than five years (and probably much longer) the proportion of Government bonds on issue held by foreigners has slipped below 50% in June. No doubt the RBNZ's new and growing holdings built via the LSAP program have moved this needle. One year ago, the percent held by foreigners was 53.6%, five years ago it was over 70%.

QUALITY DOWNGRADE
The June jobs report in Australia features a very sharp rise in part-time employment (+249,000) and a drop in full-time jobs (-38,100), allowing the jobless rate and participation rate to hold steady. Re-opening there came with uncertain hiring even if there was lots of it.

AUSSIE SETBACKS
Meanwhile, the pandemic setbacks are growing in Australia. With 317 new cases and two deaths, Victoria has registered the biggest spike of any state or territory since the pandemic began; NSW has reported ten new cases today so far. It is their housing market that may first feel the impact of this fierce second wave.

A TIGER ON THE PROWL
China has reported a stronger set of economic data for Q2-2020 than most analysts were expecting. The top-line growth result was +3.2% pa year-on-year and far better than the +2.5% expected. It was also far better than their -6.8% shrinkage in Q1-2020. Other data was also positive with only June's retail sales data holding them back at -1.8% year on year (when growth of +0.3% was expected).

EQUITY UPDATES
On Wall Street, the S&P500 ended its session earlier up +0.9% and less than the gains the earlier European markets posted which were up closer to +2%. Shanghai however has opened down another -1.4% today and a building sell-off trend despite the good official stats. Hong Kong is down -1.1%. Tokyo is down -0.5%. Locally the ASX200 is down -0.6% in early afternoon trade. The NZX50 Capital Index is down -0.7% in late trade and giving up all of yesterday's gains.

SWAP RATES UPDATE
Swap rates are probably unchanged again today. We don't have final wholesale swap rates movement details yet but we will update this later in the day if they show a significant movement. The 90-day bank bill rate is unchanged at 0.31%. The Aussie Govt 10yr is marginally lower at 0.89%. The China Govt 10yr is down by -5 bps to 3.07%. The NZ Govt 10yr yield is unchanged and holding at 0.94%. The UST 10yr is down marginally to 0.62%.

NZ DOLLAR LITTLE-CHANGED
The Kiwi dollar has given a little back from what it gained yesterday, now at 65.5 USc. But against the Aussie we are firmer at 93.8 AUc. Against the euro we are holding at 57.5 euro cents. And that means the TWI-5 is still just under 70.

BITCOIN HOLDING
The price of bitcoin is little-changed again but on the softer side at US$9,202. The bitcoin price is charted in the currency set below.

This soil moisture chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».