A review of things you need to know before you sign off on Friday; a hot home loan rate from TSB, the PMI expansion rose, more FLP funding, better China data, swaps rise, NZD falls, & 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
TSB launched a market-leading 4.69% one year fixed home loan rate.

TERM DEPOSIT RATE CHANGES
TSB raised TD rates too.

PERKIER LOCALLY
Our factories bounced back strongly in August, led by higher factory orders, so the PMI index recorded its best month since July 2021. Its a good result, but one that isn't mirrored by international trends, notes BNZ.

SIX FIGURE 'LOSSES', PART OF A WIDESPREAD DECLINE
Median house values dropped in 84% of NZ suburbs between June and September taking property values down by more than $100,000 in some Auckland suburbs over winter.

MORE FLP DRINKING
One (or two?) banks drew down on the Funding for Lending program yesterday (notified today), taking $550 mln for up to three years, all at the OCR cost (currently 3.0%). We don't know who they are, but if you do, please let us know. Now $14.6 bln has been disbursed under this program which will end in December. There is capacity for about another $7 bln to be drawn.

FOREIGN INSTITUTIONS FUNDING IN NZD
The RBNZ reported today that the total value of Kauri bonds on issue as at the end of August is $31.4 bln, its highest ever. Kauri bonds are New Zealand dollar denominated debt securities issued in New Zealand by a foreign issuer. But most are held by local institutions. Only 29% are held by 'non-residents', about as low a proportion as we have ever seen. (D35)

BETTER CHINA DATA
China reported some key data today, and some of it was unexpectedly positive. Retail sales were up +5.4% in August from a year ago, an expansion at twice the July rate. Industrial production was up +4.2% on the same basis, also beating expectations. In fact, electricity production surged in August, up almost +10% from year-ago levels. But this is still a bit of a puzzle because these 'power' rises recently are far more than can be explained by industrial activity or consumer behaviour.

CHINA HOUSE PRICES FALL FASTER
Chinese citizens are as heavily 'invested' in residential real estate as Kiwis, maybe even more so. But data out today shows that in 50 or their 70 largest cities the prices of new housing fell in August from July. More broadly, for housing resales, 56 of these 70 cities posted price retreats. The 'wealth effect' impact on vast numbers of Chinese households will be negative, and for many, disturbingly so. There may be building social disquiet.

EYE-POPPING RATES
The central bank of Argentina raised its policy rate today by +550 bps in their Quixotic quest against local inflation. That takes their new policy rate to .... 75% !! Their inflation rate is running at 78.5% however, so perhaps understandable. This is what happens when you let inflation get away.

SWAP RATES FIRMER
Wholesale swap rates are probably higher again today on global forces. Our chart will record the final positions. The 90 day bank bill rate is up +2 bps to 3.64% which is a new high since April 2015. The Australian 10 year bond yield is now at 3.74% and up +7 bps from this time yesterday. The China 10 year bond rate is up +1 bp at 2.69% and its highest in a month. The NZ Government 10 year bond rate is now at 4.03%, unchanged from yesterday but above the earlier RBNZ fix for this bond at 4.01% which was down -4 bps. The UST 10 year is now at 3.46% and up +4 bps from this time yesterday taking the weekly rise to +13 bps.

EQUITIES STRUGGLE
Wall Street ended down -1.1% with a final Thursday dip. That takes the loss so far this week to -4.0%. Tokyo is also down -1.1% in ongoing trade today and heading for a weekly drop of -3.2%. Hong Kong is down -0.7%. But Shanghai is down -1.2% in their Friday morning trade, heading for a -2.4% weekly fall. The ASX200 is down -1.3% in early afternoon trade and heading for a -2.0% weekly drop. However, even though the NZX50 is is holding its own and little-changed today, it will still post a -1.0% weekly fall.

GOLD DOWN AGAIN
In early Asian trade, gold is down another -US$28 from this time yesterday to US$1,666/oz.

NZD ON DOWNWARD TRACK
The Kiwi dollar has sunk significantly from this time yesterday and is now at 59.6 USc and that is a -2% devaluation over the past week. Against the AUD we are still weak at 88.9 AUc but unchanged from this time yesterday. That is a weekly devaluation of nearly -1%. Against the euro we are a softer at 59.6 euro cents. That all means our TWI-5 is down -40 bps at 69.3. For the week the overall NZD devaluation is -1.6%. As it mounts, our tradable inflation is higher than it would otherwise be.

BITCOIN FALLS YET AGAIN
Bitcoin has fallen again, this time to US$19,785 and down a further -1.5% from this time yesterday. Volatility over the past 24 hours has remained moderate at +/- 2.1%.

This soil moisture chart is animated here.

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