A review of things you need to know before you go home on Monday; no rate changes, used imports fall, commodity prices slip, "house prices to rise", swaps fall, NZD stable

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

MORTGAGE RATE CHANGES
No changes to report.

TERM DEPOSIT RATE CHANGES
No changes here either.

PEAKED & DECLINING I
Last week we got the new car sales data for July (which was up +5.7% year-on-year after an almost -5% fall on that same basis in June). Today we got the data for used imports and that shows a -4.0% fall on that year-on-year basis. In fact, that is the sixth consecutive month where sales of used imports failed to reach the level of the same month in 2017. Annual sales of this class of car is now down to under 160,000 for the first time since July 2017. The peak for this category has certainly passed. For NZ-new cars, there is still growth year-on-year even if it is small. (Stink bug infestations might have contributed to earlier declines, but not for June or July.)

PEAKED & DECLINING II
Our commodity prices are high by historic standards, and near record highs in NZD terms. But in July they slipped somewhat, not significantly, but it was the second month is a row this has happened and the July retreat was bigger than that for June. Of the six broad commodity categories, only forestry prices rose, defying predictions – "a star performer" noted ANZ. The weakness is largely due to lower dairy prices and while there are still some headwinds there they are still above their 10 year averages. Overall, New Zealand’s terms of trade generally follow the global economic cycle and data flow is suggesting our commodity prices are near (or slightly past) their peak.

FONGO?
In Australia, real estate talk has apparently turned to fear-of-not-getting-out. FOMO is so 2017. That is far different to what the economists as Kiwibank see on this side of the ditch: "When gazing into the property crystal ball, you must conjure up the three Ps: Population, Preference, and Policy. And we see a Kiwi property market far from the precipice. We forecast a period of consolidation due to investor restraint, rising interest rates, and a lift in supply into the 2020s. Auckland house prices are consolidating; and the risk is they fall, but not far. A small fall would be a slight correction from past excesses. We forecast a meaningful lift in prices, nationally, into the mid-2020s."

(NEARLY) EVERYONE IS HAPPY
Markets in our time zone are opening positively today. the NZX is up +0.5% and the ASX is following with a similar rise. Tokyo is also up +0.5%. However, the bulls are running in Hong Kong, where they are up +1.2%. In Shanghai however, they have opened flat.

DAIRY AUCTION PREVIEW
We have another dairy auction on Wedensday this week. The derivatives market suggests that WMP prices will be unchanged (a little over half the product being offered), but that we should see +5% gains for SMP (about a quarter of the volumes on offer). That suggests a small rise overall following the previous event's small fall. But nothing is certain; the derivatives market has a spotty record of predicting actual outcomes.

SWAP RATES SOFT
Local swap rates are down again today, down -1 for two year terms, -3 for five year durations, and -3 bps for ten year durations. The UST 10yr is holding steady at 2.96%, up +1 bps from where it ended in New York at the end of last week. The Aussie Govt 10yr is at 2.69% and a chunky -5 bps fall from its Friday close, the China Govt 10yr is at 3.48% down -1 bp, while the NZ Govt 10 yr is at 2.80%, down -3 bps. The 90 day bank bill rate is unchanged at 1.90%.

BITCOIN MIXED
The bitcoin price is now at US$7,134, up +1.9% from where it started this morning but down -2.8% from this time on Friday.

NZD LITTLE CHANGED
The NZD is marginally firmer at 67.5 USc. We are almost unchanged on the cross rates from where we opened this morning at 91.1 AUc, and the euro at 58.4 euro cents. That leaves the TWI-5 at 71.1, a level we have been at for about 45 days.

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