A review of things you need to know before you go home Friday; Westpac raises rates, very strong PMI, innovation slippage, Vancouver rethinks, swaps rise & steepen, NZD stable

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

MORTGAGE RATE CHANGES
Westpac has raised all their floating rates by +11 bps. That puts them with the most expensive floating rate in the New Zealand market at 5.95%

DEPOSIT RATE CHANGES
Westpac has launched a new eight month term deposit ‘special of 3.50%.

‘MARVELOUS MAY’
“New Zealand’s Performance of Manufacturing Index (PMI) lifted to a very strong 58.5 in May s.a., or 60.1 unadjusted. This is up from April’s 56.9 (53.1), which was not-too-shabby itself despite some possible drag from the timing of holidays in that month. The PMI has now pushed up to its highest level in 16 months. It all makes the mild slowdown we saw at the beginning of the year a distant memory. Positivity is prevalent throughout the May survey, across the major components of production, new orders and employment, as well as across firm sizes, industries, and regions. It sets up the manufacturing sector to make a strong positive contribution to Q2 GDP growth.” – assessment by BNZ’s Doug Steel.

INNOVATION SLIPPAGE
Cornell University, the United Nations’ World Intellectual Property Organisation, and Insead released their annual Global Innovation Index report overnight. And New Zealand has slipped four places to 21st in the world. A small consolation is that we are ahead of Australia who are 23rd. In Asia we rank 5th ahead of China and Australia, but behind Singapore (#7 worldwide), Korea (#11), Japan (#14) and Hong Kong (#16). We do rank #1 in the sub-groups of “Political stability and absence of violence/terrorism”, “Ease of Starting a Business “Ease of Getting Credit” and “Protecting Minority Shareholders”. But we are let down in the areas of “Graduates in Science and Engineering” (#66), “Gross Capital Formation” (#53), “GDP per unit of Energy Use” (#75), “FDI Inflows” (#156″) and “GDP per Capita” (#59). We score #4 for “Government Effectiveness”, and #3 for “Regulatory Quality”. Embarrassingly, our public sector scores hold us up, our private sector scores let us down.

NO INQUIRY
In a key vote in the Australian lower House of Representatives, a bill to hold a parliamentary banking inquiry failed today. That is probably the end of the current move there to put the big banks under intense political scrutiny, an effort that has gone of for at least two years.

CAMPAIGN ONE WAY, GOVERN ANOTHER?
For those interested in British Columbia housing policy, it looks like the new Government (a left coalition of the NDP + the Greens) is backing away from a tax on “speculative real estate investment” in the province.

A NEW LOW
Just in case you think Donald Trump represents most Americans, his job approval weekly average edged down to 37% during the week ending June 11. This rating is one percentage point below the previous week’s rating and is the lowest weekly average of his administration. His disapproval rating for the same week, 58%, was his highest to date.

WHOLESALE RATES RISE & STEEPEN
Yesterday’s fall and flattening has been partially reversed today with rises across the board with a steeper bias. The two year is up +2 bps, the five year is up +3 bps, and the tem year is up +4 bps. These rises are less than yesterday’s falls. Even the 90 day bank bill rate is up, even if only by +1 bp to 1.94%.

NZ DOLLAR REMAINS STABLE
NZD is basically unchanged today at 72.1 USc. On the cross rates, against the Aussie we are at 94.9 AUc, and we are at 64.6 euro cents. The TWI-5 is stable at 76.4. And bitcoin is lower again by -3.4% to US$2,423,.

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