A review of things you need to know before you go home on Tuesday; strong Q2 retail sales, Heartland stars, NZBA resists new mortgage deferral scheme, power demand sinks, swaps stable, NZD firm, & more

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

MORTGAGE RATE CHANGES
None announced so far today.

TERM DEPOSIT RATE CHANGES
China Construction Bank raised their 6 months to 5 years TD rates.

A POSITIVE SURPRISE THAT NO-ONE NOW CARES ABOUT
Retail spending was strong before this latest lockdown. We had a sense of its strength from the monthly electronic transactions data, and now this retail sales data confirmed it. Actually, today's data came in better than analysts were expecting despite that card transaction data. And to put in to a broader perspective, the June 2021 quarter spending was +14.4% higher than the same quarter in 2019 - and after adjusting for pricing effects. That is an impressive increase, and analysts would have been impressed had the August lockdowns not spoiled the party. Spending gains were widespread, despite the closed border and included the hospitality sector (which was up +5.7% from 2019 and without price effects - itself impressive in the circumstances). Today's overall retail result sets up an expectation that June GDP will be revealing handsome real growth.

A LOCAL BANK EARNING LIKE AN AUSSIE
Heartland Group reported an $87 mln profit for its June year after a better than expected second half. It is pushing ahead with its reach through digital strategies and platforms and aiming for growth in 2022 of between +7% and +10% in profit. It is profitability that rivals and often exceeds Kiwibank despite Kiwibank having almost seven times the banking assets. Heartland's June result may make it the largest NZ bank by profit - we will know tomorrow after the RBNZ releases its Dashboard data.

NO DEFERRALS YET
The New Zealand Bankers' Association says there are no plans to resurrect the mortgage deferral scheme, but isn't ruling out doing so.

SHUTTING DOWN FAST
National electricity demand is sinking, and fast. It is down -10.5% from this time last week, and down -20.6% from this time two weeks ago.

PRESSURE STAYS INTENSE IN BOTH NZ & AUSTRALIA
There were another 753 new community cases in NSW today with another 619 not assigned to known clusters, so they are still out of control, even if this latest data is slightly less than yesterday's. They now have 11,484 locally acquired cases all in their leaky pseudo lockdown. Their lockdown has been extended and they are now under curfew too. Victoria is reporting another 50 new cases today, so it is still bad there too and their lockdown is extended, also with a curfew. Queensland is now reporting six new cases with growing threats there. ACT has 30 new cases. Overall in Australia, more than 30% of eligible Aussies are fully vaccinated, plus 23% have now had one shot so far. There was only 1 new case in New Zealand at the border, and 41 more in the community. However, most new community cases are related to the Mangere AOG cluster, so there are signs it is coming under control here. So far, 24% of eligible Kiwis now have both shots, another 18% the initial shot. The Pfizer vaccine is the first to receive full FDA approval.

GOLD FIRM
Compared to where we were this time yesterday, the gold price is up +US$ 13 at US$1801 in early Asian trade. But that is down -US$4 from the closing New York price and down -US$1 from the afternoon London fix.

EQUITIES GO RISK-ON
In New York, the S&P500 closed its Monday session up +0.9% after taking risk-on signals from yesterday's stron Asian market gains. Today, Tokyo is still rising strongly, up +1.0% in morning trade. Hong Kong is up +1.7% and Shanghai up +0.7% in their early trade.. The ASX200 is up +0.4 in afternoon trade, and the NZX50 Capital Index is up another +0.3% after yesterday's strong showing.

KIWIBUILD PHOENIX
The receivers of the failed Ormiston Rise "planned community" in Totara Park, South Auckland, which was made up of more than 700 freehold terrace, duplex and standalone homes, and included many KiwiBuild homes, have now sold the project - essentially to its financiers who will complete the project.

SWAP & BONDS RATES STAY QUIET
We don't have today's closing swap rates yet. They are probably holding, especially at the one year term. We will update this when the end-of-day data comes through. The 90 day bank bill rate is unchanged at 0.39%. The Australian Govt ten year benchmark rate is up another +3 bps from this time yesterday at 1.13%. The China Govt ten year bond is slightly firmer at 2.89%. But the New Zealand Govt ten year is up +2 bps at 1.62% and now above the earlier RBNZ fix of 1.58% (-1 bp). The US Govt ten year is now at 1.27% and down -1 bp from this time yesterday.

NZ DOLLAR STAYS FIRM
The Kiwi dollar is now at 68.9 USc, up +40 bps from this time yesterday. Against the Aussie we are slightly softer at 95.5 AUc. Against the euro we are firm at 58.7 euro cents. The TWI-5 is now at 72.3 and a minor firming from both this time yesterday, and where we opened this morning.

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BITCOIN ABOVE US$50,000 AGAIN
The bitcoin price is now at US$49,127 and down -2.0% from this time yesterday. It was only able to hold above US$50K for 12 hours and is not making another run at it because it is back its lowest level in the past 24 hours. Volatility in the past 24 hours has been low at +/- 1.7%.

This soil moisture chart is animated here.

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