Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
Kookmin Bank have raised all three of their fixed rates. These are now among the highest of any bank.
TERM DEPOSIT/SAVINGS RATE CHANGES
None to report here today.
INFLATION PRESSURES STILL INTENSE
The official Food Price Index rose +9.6% in July from a year ago but fruit and vegetable prices fell month-on-month. Grocery food prices increased by 11.9% which is consistent with the Infometrics monitoring of Foodstuffs cost changes from their suppliers.
RENTS UNDER UP-PRESSURE TOO
As Westpac noted: "Rents were up an average of +0.4% in July and are up +4.1% over the past year. There’s a strong seasonal pattern in rents, and the +0.4% rise that we saw in July is unusually large for this time of year. We think that in part reflects the recent upswing in migration and related increase in demand for housing. We expect the pressures on this front to persist over the months ahead." Details here.
DOES MORE AUCTION VOLUME IMPACT PRICES NEGATIVELY?
Fonterra has released its expected offer volumes into the Global Dairy Trade auction platform for the upcoming year. They have increased their forecast total offer quantity with a +20,000mt increase to Whole Milk Powder (WMP) and +5,000mt increase to Skim milk powder (SMP) for the upcoming year. Given recent dairy demand slumps, an increase in volumes on the platform may have further negative impacts on commodity prices, observed the savvy analysts at NZX Dairy.
'EARNINGS AT THE TOP END OF THE FORECAST RANGE'
Fonterra also said today that it expects to end the year at the top end of its forecast range of 65-80 cents per share. This is the Company result, and the inverse of the milk payout forecast, which is deeply negative.
'WE WANT MORE BOXES TO TICK'
The peak accountants lobby said making gender pay gap reporting mandatory for employers with more than 250 employees is the right move and ... will drive better social and economic outcomes. (Of course you will need an accounting firm to prepare these reports.) They gave their support at a Select Committee hearing in Parliament.
'THEY LOVE US'
The RBNZ released the results of feedback of the financial industry's relationship with them. It is reported as overwhelmingly positive.
OH, THE IRONY
The Financial Markets Authority (FMA) has issued Enprise Group a warning for failing to keep proper accounting records. Enprise is a NZX-listed trans-Tasman provider of business accounting software based on the MYOB platforms.
THANK YOU TO OUR SUPPORTERS
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MORE ELECTION POLICY RELEASED
Today we updated party policy positions for new releases from the Act Party on Justice, and five new policy positions from the National Party, on Education, Women's Issues, Public Transport, Roads, and Infrastructure. You can find all released policy on our easy-to-use database here that makes comparing between parties very easy. We are expecting to cover more policy from the Greens and the Labour Party when each release details on Sunday.
PARTING SHOT
In Australia, RBA Governor Philip Lowe has told a Canberra parliamentary hearing that there would be major ramifications if productivity did not return to pre-Covid levels. Inflation will stay high and interest rates would too, unless this problem can be solved. It is doubtful he got much sympathy from that audience. But he will be proved right in the long term.
AI 'NEWS' TO ENSURE YOU GET YOUR BIASES CONFIRMED
Rupert Murdoch's New Corp said it was in “active negotiations” with artificial intelligence firms. That is according to the News Corp CEO.
DIALING BACK
Singapore cut its economic growth expectations for this year to "0.5% to 1.5%", down from "0.5% to 2.5%" in an earlier assessment. They see a weak global economy and low demand from key trade partners like China.
WANING CAR SALES
Vehicle sales slipped in July to just under the 24 mln/year pace in China, the world's largest vehicle market - by far. They fell -1.4% from the same month a year ago and this was the first decline since January. It was maybe a bit worse than it appears because the base a year ago was low too, but July is the off-season of their car market. Local sales went down -6.3% to under 2 mln units in the month, while export sales increased +35% to 392,000 units, some of which ended up here, especially EVs like Teslas and BYDs.
SWAPS HIGHER
Wholesale swap rates are probably higher across all tenors. However, the real action in swap rates comes near the close. Our chart will record the final positions. The 90 day bank bill rate is little-changed yet again at 5.64% and now +14 bps above the 5.50% OCR. The Australian 10 year bond yield is up +9 bps from yesterday at 4.12%. The China 10 year bond rate is little-changed at 2.66%. And the NZ Government 10 year bond rate is down -1 bp from this time yesterday at 4.87%, and still higher than the earlier RBNZ fix which was up +4 bps bps at 4.83%. The UST 10 year yield is at 4.11% and up +8 bps from yesterday at their long end.
EQUITIES SHARPLY LOWER IN SHANGHAI
The S&P500 ended its Thursday session on Wall Street little-changed. Tokyo isn't trading today, a public holiday (Mountain Day). Hong Kong is down -0.8% but Shanghai is down -1.1% as nerves rattle in their property sector. The ASX200 is down -0.2% in afternoon trade and heading for a weekly rise of +0.2%. The NZX50 is unchanged in late trade, heading for -1.1% weekly drop.
GOLD LOWER AGAIN
In early Asian trade, gold is at US$1914/oz and down a further -US$3 from yesterday. It closed earlier in New York at US$1912, and earlier still in London at US$1921/oz.
NZD RETREATS
The Kiwi dollar is down more than -½c from this time yesterday is just under 60.1 USc. Against the Aussie we are also down -½c at 92.2 AUc. Against the euro we down the same -½c at 54.7 euro cents. That means the TWI-5 is at 68.9 and down a bit more than -40 bps.
BITCOIN NOT GOING ANYWHERE
The bitcoin price has slipped slightly from yesterday, now at US$29,371 and down a minor -0.8%. Volatility has been low at just under +/- 0.6%.
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73 Comments
I see there is now a green tick ✅️ next to people who contribute to Interest's great journalism. Unfortunately there are many very active commenters who do not support Interest.
Com'on guys, it's 33cents/day, click the "BECOME A SUPPORTER" button above and give all the people at Interest some very deserved support !
Nope. I contribute and I don't use Press Patron either. My view is if others want to go sub-free and trawl through adds just to read comments that's up to them! If someone in particular continues ranting on about those who don't have a green tick it will only be counterproductive to the drive for paid membership.
Intently waiting to see National's fully costed tax plan and how Willis puts a spin on the numbers in her first ever job in finance.
Let's see what public assets get auctioned to foreigners in order to pay down public debt and deliver tax cuts to earners and landlords while also increasing core service funding. They are clearly proposing new roads be kept off government books via PPP funding structures.
Not denying any of that wastage but how does one practically deliver those savings.
Take consultants for example - operational spending was less than $1b in 2022, I suspect some of that was Covid-related as well.
Do you cut all funding from across the 100+ agencies including all the technical advice from the likes of medical, geotechnical, defence/national security, cybersecurity, actuarial, etc. SMEs? Bring all of that expertise in-house, yeah right!
If not all consulting spending, who gets to decide what spending stays and what gets cut? Bean counters at Treasury? More centralisation of decision-making then?
Those other items you listed have cumulatively budgeted less much than a billion in the current fiscal year. Where does the $2b or so per year come to deliver the tax cuts alone, let alone all the other items from the bucket list of promises?
What about new impactless ministries like the one made up on the hoof for Pacific Peoples?
What about the road bumps costing 300k around NZ?
What about the hundreds of comms people that work for Health NZ?
Rebranding all ministries to Te Reo...
It all adds up.
I can keep going if you'd like. But I have better things to do.
No way those numerous pockets of savings get snapped up within the first couple of years across so many public sector units without hiring a huge army of consultants/contractors to make cuts and then put something else in place.
Then you have all the huge costs of firing public servants with different retrenchment clauses baked into their contracts plus severance and leave cash-outs in the hundreds of millions.
Luxon doesn't have the nerve to go all through with it. The man can't even get through a single interview or question time without fumbling.
Chart of NZD and CNY. Jaws closing.........
https://www.newshub.co.nz/home/politics/2023/08/labour-mp-ingrid-leary-…
She'll have plenty of time post election to not need to do this.
https://www.newshub.co.nz/home/politics/2023/08/parliament-s-new-te-k-h…
Unnecessary 500k spend in the middle of a cost of living crisis. Nice one Labour.
Apparently $500k for something tangible and I guess permanent is worthy of an outcry. Much like the $600k playground outside parliament.
Yet as you say for the flag referendum they spent that much on the bloody website!!
Website/digital: $643,000
https://www.nzherald.co.nz/nz/cost-of-flag-referendum-4-million-under-b…
Local company Bostock New Zealand looking for investors
Before the receivers are called in?
Feds survey paints grim picture of farmer confidence
The dark outlook is firmly linked to poor profit prospects for the sector, with only 2% reporting that they were making a profit currently, down a massive 26 points from January when 28% reported making a profit.
RBA Governor Phillip Lowe had a very belated insight admitting that zoning was making housing expensive. I think New Zealand would do well to examine removing zoning restrictions.
I’m all for equal opportunity (which we must be very close to having in NZ) but that does not mean equal outcome. Isn’t it possible that women choose different career paths to men? Our IT company is definitely sexist, they would employ a woman over a man any day, yet we still have way more men employed.
Apparently I am not a paid member according to a certain individual so don’t point the finger at me. I got an incorrect email from the editors too, which I an really pissed off by. So much for customer service.
While we are at it, the editorial policy discourages trolling yet it is consistently tolerated.
I have canceled my membership and I won’t be back here. I hope the editors reconsider some things as well as the undue influence certain members seem to wield.
Yvil advocated for the members tick and I think that’s a big mistake.
Have a good life. I am sure few will miss me.
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