A review of things you need to know before you go home on Wednesday; no rate changes, retail sales rise; LGFA tender brings a miss, farm sales weak, lifestyle block sales average, swaps slip, NZD firms

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

MORTGAGE RATE CHANGES
No changes to report again today.

TERM DEPOSIT RATE CHANGES
None here either.

A STRONG SURPRISE
Retail sales in the June quarter actually came in much better than anaysts were expecting, a surprise because the previously reported electronic cards data didn't flag the jump. This surprise moved our currency up +20 bps on the release although it has slipped off somewhat since. Of every $100 spent on 'retail', $21.40 is spent in supermarkets and that grew a very modest +3.3% year on year, the slowest pace since September 2016. We spend $12.40 on 'food and beverage services' (dining out) and that proportion is taking a larger and larger share. It is also growing at a slower pace than recently although the year-on-year data is skewed by last year's Lions Tour. Spending on 'fuel' (petrol) is the other mover; we spend 9.1% of all our retail purchases on this and it rose at a +6.9% pace, crowding out other spending.

INVESTOR HESITATION
The LGFA tendered $210 mln in bonds with four maturities. In the end the weighted average accepted yield was 3.23% and the coverage ratio was 2.3x. But this hides the fact that their 2027 issue did not attract enough bids to be fully allocated, so that missing $10 mln was made up with extra acceptance on the 2033s. It's has been a long time since any public tender has failed to get full bidding on a maturity.

UNUSUALLY LOW
The 87 farm sales in July was the lowest level for that month since 2012 and more than -8% lower than the same month a year ago. A big drop in the sales of finishing farms was offset by a similar rise in grazing properties, maybe MPB affected. But the net reduction in the end turned out to be a halving of sales of horticulture properties. This page will give you price detail.

REGIONAL VARIATIONS
Sales of lifestyle block properties in July were similar to the levels we saw in the same month a year ago. But there was rising demand in Waikato and the Bay of Plenty, and steep falls in Taranaki, the Manawatu, and Wellington.

RESURGENT
In Australia, there was a good rise in the value of construction work completed in the June quarter, overall up +9% and pushed higher by a return of some large engineering (mining) projects. But residential and commercial property projects also came in with reasonable rises as well.

SWAP RATES LOWER
Wholesale swap rates are down -1 bp across the rate curve again. The UST 10yr was up on general stock market -risk-on mood, but then fell sharply as the Manafort verdict and Cohen guilty pleas came in. Political uncertainty. It is lower at 2.82%, down -1 bp and has stayed down. The US 2-10 curve has now fallen under +23 bps, a new 11 year low. The Aussie Govt 10yr is at 2.54% (up +1 bp), the China Govt 10yr is at 3.66% (down -1 bp), while the NZ Govt 10 yr is now at 2.61%, up +5 bps. The 90 day bank bill rate is up +1 bp at 1.91%.

BITCOIN JUMPS
The bitcoin price jumped on the Manafort/Cohen news now up at US$6,719, up +6.5% from this time yesterday.

NZD FIRMER
The NZD is a firmer against the USD at 67.1 USc today, a combination of a weaker greenback and the surprise retail sales data. On the cross rates we are marginally softer at 91.2 AUc and 57.9 euro cents. That puts the TWI-5 at 70.7.

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