A review of things you need to know before you go home on Tuesday; no rate changes, Shanghai in trouble again, businesses 'quietly unconfident', SUV's rule, asking prices drop, swaps stable, NZD down

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

MORTGAGE RATE CHANGES
No changes today.

TERM DEPOSIT RATE CHANGES
No changes here either.

FALLING AGAIN
Firstly we should note that the Shanghai and Tokyo markets both opened without a major drop - but some further reductions are building. (The Hong Kong market has recorded a big -3% drop because it missed yesterday's action and is now resetting.) At their lunch break however, Shanghai is down -1.3% and sinking. Tokyo however is sort of holding, down only half that today.

BECOMING GRUMPY
Business confidence is leaking away, according to the latest NZIER QSBO survey. This confirms what has been reported monthly in the ANZ survey. This eroding confidence will affect investment plans and while it might be mitigated by higher Government spending on benefits, it will be a drag on the economy for some time to come. Coupled with higher inflation signals in the same survey (due in large part to the falling exchange rate), some analysts are warning of a period of stagflation (rising prices with no growth). But not every analyst is pessimistic.

PAST THE PEAK OF NEW CAR SALES
June new vehicle sales were held up by still-strong commercial vehicle sales which were at their second highest month ever (although -6.2% lower than for June 2017, when the record was set). Car sales were -9.4% lower than for June 2017, and back to levels we saw in 2016. And yes, SUV sales grabbed an even greater share, 71.3% of all passenger car sales in June. Only 2,651 new cars sold in June were sedans. Fear of higher petrol prices only seems to have shifted demand to slightly smaller SUVs rather than back to sedans.

ANOTHER DOWNER?
The dairy auction tomorrow morning looks like it will be a losing affair. The derivatives market suggests another -1.3% drop in WMP prices and a -1.8% fall in SMP prices. If that is how it pans out, that will be third decline in a row and the eighth decline in the past ten auctions.

SINKING
Asking prices and new listing numbers are falling on portal realestate.co.nz. The average asking price for Auckland homes is down more than -$82,000 (-8.3%) from its February peak - prices are also down in the Bay of Plenty, Wellington and Canterbury.

SINKING II
In Australia, lower levels of inbound migration is affecting their housing markets. Data out today shows that total dwelling building consent levels fell by -3.2% in May, driven by a -8.6% decrease in private sector houses.

SWAP RATES STABLE, BOND YIELDS DROPPING
Local swap rates are little changed today, with a hint of softeness at the long end. The UST 10yr is now at 2.86%, unchanged, after being as high as 2.88% at one point. The Aussie Govt 10yr is at 2.60, down -2 bps, the China Govt 10yr is at 3.49% (down -2 bps), and the NZ Govt 10 yr is at 2.82%, down -6 bps. The 90 day bank bill rate is down another -1 bp at 1.98%.

BITCOIN STILL RECOVERING
The bitcoin price is now at US$6,613 which is another +4.3% higher than this time yesterday. (By the way, gold is down further in Asia after the Wall Street close, now at US$1,239/oz.)

NZD STAYS DOWN
The NZD is staying down at the levels we sunk to last night, now at 67.1 USc. On the cross rate we are lower at 91.4 AUc and 57.7 euro cents. That has the TWI-5 at 70.6.

This chart is animated here. For previous users, the animation process has been updated and works better now.