A review of things you need to know before you sign off on Wednesday; BNZ tweaks up some home loan rates, employment confidence falls, Geneva probed by RBNZ, swaps unchanged, NZD slips, & more

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
BNZ raised both its 18 month and 2 year fixed rates by +14 bps. But the new rates are very similar to what its rivals were already offering.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here.

LABOUR MARKET 'DOWNTURN UNDERWAY'
Employment confidence fell by 7.4 points to 98.3 in the September quarter, according to the Westpac-MM survey. This is the first time since March 2021 that households have held a negative view about the labour market. The decline was mainly due to a drop in perceptions regarding the availability of jobs, which often provides a useful lead on the direction of the unemployment rate.

NOT FROM HIGHER MARGINS
KPMG's latest quarterly look at banks' financials highlights that only 'slight' increases have been seen in net interest income, with much of the increased bank profitability coming from greater gains on trading and hedging products

WARMEST
Stats NZ is pointing out that eight out of the 10 warmest years recorded over the past 114 years of records occurred in the past ten years. 2022 was the warmest on record, and when 2023 data is compiled it in turn may be beaten.

EARLY SPRING SURGE
The latest Reserve Bank figures show that mortgage money advanced last month rose by over +8% on a seasonally-adjusted basis.

UNDER INVESTIGATION
Geneva Finance said that its subsidiary Quest Insurance is under investigation by the RBNZ enforcement team. The RBNZ told them they have reasonable grounds to suspect that contraventions of part 2 of the Insurance (Prudential Supervision) Act 2010 have occurred over apparent failures to (a) establish a statutory fund when required; and (b) maintain the minimum solvency margin imposed by its conditions of its insurance licence. "These relate to matters occurring in 2021 and 2022, and in respect of which Quest has been in frequent contact with the Reserve Bank. Quest self-reported to the Reserve Bank the apparent breaches of the legislation. Quest maintains that at all times it had adequate cash and overall solvency to meet all immediate and future obligations." Quest and Geneva both operate out of the same headquarters building.

HOVERING ABOVE 5%
Australia has a monthly "CPI indicator" series, tracking inflation between their main quarterly assessments. For August that came in at 5.2%, up from 4.9% in July. In June the rate was 5.4% although the overall Q2 official Aussie CPI was 6.0%.

SHARPLY FEWER VACANCIES
Australia releases job vacancy data but it is on a delayed basis and the latest is for May. That shows job vacancy levels slipping away - quite quickly, and down -10% from a year ago. It would have been worse without a +14% rise in public sector job vacancies. The private sector saw their vacancies fall by more than -12% from a year ago in May. With their labour market softening, perhaps it is no surprise that Australia's retail turnover is very lackluster, hardly growing in current dollar terms and nowhere near enough to account for inflation.

PROFITS NO LONGER FALLING
In China, they released August industrial profits data today. that shows profits fell by -11.7% from a year earlier in the first eight months of 2023, amid weak demand at home and abroad and persisting margin pressures. The decrease followed a -15.5 % slump in the prior period and a -4% fall in 2022. In August alone, profits rose +0.8% from the same month a year ago, far less than inflation, but the first such rise in three months. In July, they fell -1.4% from a year ago, so things may be bottoming out.

SWAPS LITTLE CHANGED
Wholesale swap rates are probably little-changed today. But the real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is also unchanged at 5.71%. The Australian 10 year bond yield is down -7 bps from yesterday to 4.37% reversing much of yesterday's sharp jump. The China 10 year bond rate is unchanged at 2.73%. The NZ Government 10 year bond rate is down -4 bps to 5.25%, but still well above the earlier RBNZ fixing of 5.20% which was unchanged today. The UST 10 year yield is has settled back -5 bps to 4.52%. The UST 2yr has fallen -9 bps, now at 5.05%.

EQUITIES DOWN EXCEPT IN CHINA
The NZX50 is down -0.6% near the close today. The ASX200 is down -0.2% in early afternoon trade. However, Hong Kong has opened up +0.4% to start its Wednesday trade and Shanghai has opened up +0.3%. Tokyo is down -0.7% to start its Wednesday trade. The S&P500 ended its Tuesday trade down -1.5%, succumbing to the bond market signals.

GOLD DOWN
In early Asian trade, gold is now at US$1901/oz and down -US$16 from this time yesterday. Earliere, it closed at US$1900/oz in New York. Earlier still it closed in London at US$1907/oz.

NZD SLIPS SLIGHTLY
The Kiwi dollar is slightly softer from this time yesterday, now at 59.5 USc. Against the Aussie we are just under 93 AUc. Against the euro we are little-changed at 56.3 euro cents. That means the TWI-5 is now at 69.4 and off its 45 day high.

BITCOIN HOLDS
The bitcoin price is little-changed today, now at US$26,2223 and down a mere -$11 from this time yesterday. Volatility over the past 24 hours has been low at just under +/- 0.5%.

This soil moisture chart is animated here.

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