A review of things you need to know before you go home on Thursday; Reserve Bank Act review; QV house price index; property transfers; used car imports; ASB regional economic scorecard; bond issue; rates higher and steeper; NZD holds

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

MORTGAGE RATE CHANGES
No changes here today.

TERM DEPOSIT RATE CHANGES
No changes here either.

RESERVE BANK ACT REVIEW - PHASE II
The Terms of Reference for Phase 2 of the Review of the Reserve Bank Act were released today by Finance Minister Grant Robertson. The Terms for Phase 2 are broad and wide-ranging. They enable the Review to ensure the Act is fit for purpose and aligned with what the Government considers will provide a strong, flexible and enduring regulatory framework that enjoys broad public and industry support. Phase 2 of the Review will be organised around a series of key topics and will consider, amongst other things, the following - the institutional arrangements for prudential regulation and supervision, statutory functions and powers, role clarity for the Minister of Finance, Board and Governor, strengths of current legislation, including its flexibility and international experience and best practice.

QV HOUSE PRICE INDEX
The days of capital gains on residential property may be drawing to a close in the main centres, with average property values flat lining in Auckland, Hamilton, Tauranga, Wellington and Christchurch, according to the latest figures from Quotable Value (QV). QV's House Price Index for May shows that the average residential property value in Auckland was $1,054 729, up just 1% compared to a year ago and up just 0.1% compared to three months earlier. Similar trends are also evident in other main centres including Wellington, where average property values remain 4.3% higher than they were 12 months ago but are down 1.1% compared to three months ago. In Christchurch average values are unchanged from 12 months ago.

PROPERTY TRANSFERS
Nearly 33,000 homes were transferred in the March 2018 quarter. Almost 4 in 5 of these were transferred to at least one New Zealand citizen. The other 1 in 5 were transferred to corporate entities, resident-visa holders, and overseas people. 3.3 percent of home transfers in the March 2018 quarter were to people who didn’t hold New Zealand citizenship or resident visas, up from 2.9% in December 2017. The increase was driven by a fall in the total number of transfers, and a small rise in the number of transfers to overseas people. Nearly 10 percent of all home transfers were to corporate entities. The territorial authority with the highest proportion of home transfers to people who weren’t New Zealand citizens or resident-visa holders was Queenstown-Lakes district, followed by Auckland.

USED CAR IMPORTS
Sales of used car imports was recorded at 13,420 for the month of May 2018. This was -7.1% below May 2017. Annual sales for cars for the year ending in May 2018 was 160,962 - the fourth straight month of declines from its peak of 166,440 in January 2018. Of the sales in May, Toyota was the market leader with 3,102 vehicle sales, followed by Nissan and Mazda with 2,630 and 2,063 respectively.

ASB REGIONAL ECONOMIC SCORECARD
Northland owned the summer of 2018, outperforming the rest of the country in the latest ASB Regional Economic Scorecard, and nudging Tasman from top spot last quarter. The key to the Northland region’s success climbing to 1st place from 7th, has been solid 5 star ratings across all the measures, from employment, construction, retail trade, to house prices and new car sales. The sun’s rays also shone brightly on the Bay of Plenty, with holiday makers moving in and bringing their cash with them. It was housing that kept Tasman in the top three. Having a negative effect on some regions was the weather. The central North Island regions of Manawatu-Whanganui and Taranaki were dragged to the bottom of the ASB Regional Economic Scorecard by drought, rounding out the Scoreboard at 15 and 16 respectively.

SEPTEMBER 2040 BONDS
A $100 mln worth of September 2040 inflation-linked bond auction saw $171 mln worth of bids from 27 bidders, of which 14 were successful. The weighted average accepted yield was 2.12% with a highest accepted yield of 2.14% and lowest accepted yield of 2.11%.

AUSTRALIAN BANKS
"The banks' liquidity continued to strengthen slightly over these six months, and their wholesale funding requirement was reduced relative to prior periods on slower loan growth," says Tanya Tang, a Moody's Analyst. "Their unsecured debt continued to be well received by investors and their funding costs remained low by historical comparison, although short-term rates rose in response to a widening of US money market rates," says Tang. "On the issue of domestic asset quality, even though it remained strong, however, in aggregate, the system's problem loan ratio deteriorated slightly due to an increase in residential mortgage arrears," says Si Chen, a Moody's Associate Analyst.

BENCHMARK INTEREST RATES STEEPEN
Local swap rates are higher and steeper today, with the short end up +1 to +2 bps and the long end +5 to +6 bps. The UST 10yr yield is up +4 bps, at 2.98%. The Aussie Govt 10 yr is now at 2.84%, up +9 bp. The China 10 yr is at 3.69%, up +1 bp. But the NZ Govt 10 yr is up +7 bp to 2.89%. The 90 day bank bill rate is unchanged at 2.00%.

BITCOIN HOLDS
The bitcoin price is now at US$7,737, up +1.7% from this time yesterday.

NZ DOLLAR HOLDS
The NZD is unchanged at 70.4 USc. We are also stable against the Aussie at 92.0 AUc but slightly against the euro at 59.7 euro cents. That has the TWI-5 now at 73.1.

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