A review of things you need to know before you sign off on Monday; few retail rate changes, new-build costs jump, key inflation expectations ease, misery up, swaps up, NZD wavers, & 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 RATE CHANGES
NBS raised its floating rate today by +50 bps to 6.95%. Bank of China cut their home loan rates for terms 6 mths to 3 years

TERM DEPOSIT RATE CHANGES
None to report here today - so far at least.

CAR LOAN RATE CHANGE
AA Money (t/a AA Finance, a 50/50 JV between the Automobile Association and Suncorp) has raised its car loans by +104 bps, "from 5.95% to 15.95% to "from 6.99% to 16.99%". Actual rates charged are risk-assessed.

DOUBLE-DIGIT SURGE
The average national build cost for a new stand-alone house, excluding land, increased by +$75,000 in the June year to $539,000, a +16% jump. These cost increases appear to be driving the push to more intensive housing, especially in Auckland. High prices are causing the construction pipeline to flattening off.

INFLATION EXPECTATIONS EASE BACK
The influential expectations survey run for the RBNZ by Nielsen among economists and other 'wise men' (35 business leaders and professional forecasters with field work for the survey was run between the 19th and 25th of July 2022), has seen this group pare back many of their expectations for both inflation and economic activity. But this easing off is unlikely to deter the central bank from another 50 point OCR hike next week.

'IT'S ALL THE SUPPLIERS FAULT'
New analysis from Infometrics, commissioned by Foodstuffs New Zealand, showcases the increasing cost of grocery supply as inflationary pressures build for suppliers. Foodstuffs says their buying costs are now rising at a +7.9% annualised rate. (That is more than the June CPI which was up +7.3%.)

MISERY RISING
Our misery index has risen to 10.6%, the highest it has been since 1994 which was 28 years ago (that is looking past the 2010/11 leap when GST was last raised). The inflation component is 7.4% and the unemployment component is 3.2%. The inflation component is the highest since at least 1990 because that is when we started this series. The 2010/11 jump was only to 5.3%. The unemployment component is bouncing along at its record low. It peaked at 11.1% in 1992. The Australian misery index is now 9.6% and has been lower than ours for more than a year now.

NOT SO SUNNY
In Australia, insurance major Suncorp is pushing through some chunky premium hikes. Their premiums are rising at the highest pace in almost a decade, the company’s full-year results indicate. Profits are falling in all their key divisions (and recall they have agreed to sell their bank to ANZ). Even their New Zealand profits are retreating. And this is despite rising premiums across all their brands.

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SWAP RATES RISE
Wholesale swap rates probably moved up sharply today on the back of the international trends over the weekend. But the impact of the RBNZ Expectations survey on these rates won't be known until trading closes. The 90 day bank bill rate jumped +6 bps at 3.29%. That is a new 7-year high, its highest since June 2015. The Australian 10 year bond yield is now at 3.24% and down -2 bps from this morning. The China 10 year bond rate is now at 2.75% and little-changed. The NZ Government 10 year bond rate is now at 3.43%, up +10 bps from this morning, and now just below the earlier RBNZ fix for this bond which was up +6 bps at 3.45%. The UST 10 year is now at 2.83% and unchanged from this morning and holding all the rise generated by the US payrolls data.

EQUITIES CRAWL ALONG
After another good weekly rise last week, the NZX50 has opened today down -0.4% in late trade today. The ASX200 is unchanged in afternoon trade. Tokyo has opened up +0.2% in its Monday opening. Hong Kong is down -0.5% in its early trade. Shanghai is flat. The S&P500 futures suggests that Wall Street will open down -0.2% tomorrow. Remember, August is northern hemisphere holiday season, so volumes are light and key traders are not at their desks.

GOLD LITTLE-CHANGED
In early Asian trade, gold is down -US$2 where we opened this morning, now at US$1,774/oz. 

NZD STUTTERS
The Kiwi dollar has firmed today to 62.6 USc from where we opened this morning (but recall it was over 63 this time Friday). However, the RBNZ Expectations survey took -15 bps off these rates, now back at 62.4 USc. Against the AUD we are little-changed at 90.3 AUc. Against the euro we are also little-changed at 61.5 euro cents. That means our TWI-5 is now at just on 71.1.

BITCOIN ON HOLD
Bitcoin is now at US$23,246 and essentially unchanged from where we opened this morning. Volatility over the past 24 hours has been modest at just over +/-1.1%.

This soil moisture chart is animated here.

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