A review of things you need to know before you go home on Tuesday; BNZ raises TD rates, ANZ's Truckometer positive, retail spending remains strong, wholesale electricity prices go berserk, swaps firm, NZD soft, & more

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

MORTGAGE RATE CHANGES
Kāinga Ora have cut their one year by -10 bps to 2.57%. They have increased their 3 year by +24 bps to 3.37%, and their five year by +17 bps to 4.07%.

TERM DEPOSIT RATE CHANGES
BNZ raised term deposit rates for terms 1-5 years, mainly up to about levels its main rivals already have, although it is +5 bps higher for 12 and 18 month rates now.

RETURNING TO NORMAL
The ANZ Truckometer series for July was out today and although the overall index was lower than for June, the overall trend is positive still. ANZ says: "The New Zealand economy is undeniably running hot. Some of it is artificial, insofar as the supply of both goods and labour has been severely hit by the closed border, but it would be a mistake to not recognise that demand is also very strong. Households in particular are spending freely and this is seeing ongoing high levels of both car and truck traffic around the country."

SOLID SPENDING
Retail activity in July as represented by the value of transactions using electronic cards rose a creditable +4.7% from a year ago, and as that may have been buffeted by pandemic twists, it is almost +17% higher than July 2019. More than pure retail activity goes though electronic card transactions and the broader measure has them up almost +6.0% in a year, up +12.6% over two years. Either way you look at it, these are 'healthy' rises. In fact, the July levels are the highest ever, other than for the holiday spikes in December. Kiwis are still spending, just not on international travel. That means that categories like apparel is doing very well in 2021 (up +18% in July 2021 from July 2019). And so is local hospitality (up +17.2% on the same basis - even without international visitors in 2021).

NETWORK FAILURE = PRICING DISASTER
The wholesale electricity price has gone berserk. Yesterday it averaged $6,640/MWhr at the Haywards reference point. The previous price was $149/MWhr on Sunday. For Saturday it was $125/MWhr. Large users who buy on the spot market have been burned badly, and that will be most large manufacturers and employers. This pricing event will echo for a long time. See this.

RBNZ BILL PASSES
The Reserve Bank of New Zealand Bill was passed following its third reading in Parliament on Tuesday. Finance Minister Grant Robertson says this update and strengthening of the Reserve Bank’s decision-making and accountability arrangements will bolster New Zealand’s financial system and make it fit for purpose to address monetary and financial policy issues now and in the future. After Royal Assent, there will be a transition period to prepare for the new arrangements ahead of an anticipated start date of 1 July 2022. The third and final Bill in this set of RBNZ reforms – the Deposit Takers Bill – is expected to be introduced into Parliament in early 2022. 

OUTPERFORMER
New Zealand's listed rest home and retirement living sector, a specialist corner of the listed property sector, had a good week last week, up +1.7% in capitalisation when the overall market was up +1.4%. It now represents 8.2% of the overall listings in this index, up from 7.9% of the total a year ago. Capitalisation of this sector is up +12.6% from a year ago, better than the overall +9.1%. In the past week, only Oceania Healthcare (OCA, #31) fell and it was down -1.3% last week.

SHARP REVERSAL
Business sentiment fell sharply in Australia in July, according to the widely-watched NAB survey. Both conditions and confidence deteriorated sharply in the month, with the latter now back in negative territory. Unsurprisingly, due to its size and the severity of the lockdown in the state, NSW drove much of the result this month. Both confidence and conditions fell sharply following a full month of lockdown in the state. That said, conditions fell in all mainland states, with SA in particular also seeing a very large fall.

PRESSURE IN NSW INTENSIFIES
There were 360 new community cases in NSW today with another 209 not assigned to known clusters, so they are still not getting on top of their outbreak. Victoria is reporting 20 new cases today. Queensland is reporting 3 new cases. Overall in Australia, more than 22% of Aussies are fully vaccinated, 44% have now had at least one shot. Aussie corporates are now starting to insist on 'no jab, no job' policies. There were three new case in New Zealand at the border, but still none in the community. New Zealand reports 27.5% of its population having had one vaccine jab, plus 16.2% having had two.

GOLD MOVES DOWN SHARPLY AGAIN
Compared to where we were this time yesterday, the gold price is down to US$1734/oz and a decrease of another -US$7/oz so far today. But it is up slightly from the New York close but still below the London fix.

EQUITIES IN MODEST SHIFTS
The S&P closed its Monday session down -0.1% on Wall Street. Tokyo has opened today up +0.3%. Hong Kong has opened up +0.1%, and Shanghai has opened down -0.1% in very early trade. The ASX200 is opened strongly but has lost it all in early afternoon trade. The ANZx50 Capital Index is up +0.3% in late trade.

SWAP & BONDS RATES HOLD
We don't have today's closing swap rates yet and if there are significant ongoing changes we will note them here. They are probably higher. The 90 day bank bill rate is up +2 bps at 0.67%. The Australian Govt ten year benchmark rate is up +4 bps at 1.22%. The China Govt ten year bond is unchanged at 2.83%. The New Zealand Govt ten year however is up +1 bp at only 1.63% and now below the earlier RBNZ fix of 1.69% (+3 bps). The US Govt ten year is now at 1.31% and up by +7 bps today and firming on the back of the robust US payrolls data.

NZ DOLLAR GIVES UP A LITTLE
The Kiwi dollar has been giving up some of its MPS and CPI strength and is back down -½c today, and now at 69.7 USc although some of that is the anti-commodity mood of global markets. Against the Aussie we are little-changed at 95.3 AUc. Against the euro we are softish at 59.4 euro cents. The TWI-5 is now a touch lower at 73, still right in the middle of the ten month 72-74 range.

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BITCOIN MOVES HIGHER
The bitcoin price is now at US$45,950 and up another +5.8% from this time yesterday. It has been almost three months since this price level was last recorded. Volatility in the past 24 hours has been high at just under +/- 4.0%.

This soil moisture chart is animated here.

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