A review of things you need to know before you sign off on Monday; Supermarket supplier cost rises moderating, EU FTA signed, China inflation flat & 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
The Co-operative Bank raised both its 18 month and two year fixed rates today.

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here today.

TRANSITIONING LOWER BUT STILL VERY HIGH
Supplier costs for Foodstuffs rose again year on year in June, but momentum in these cost increases is moderating. The Infometrics-Foodstuffs Grocery Supplier Cost Index shows an +8.3% increase in what suppliers charged supermarkets for goods in June 2023 compared to a year ago. That is down from the May increase of +8.8%.

HIPKINS, O'CONNOR SIGN FTA WITH THE EU
Fresh from his trip to China, PM Chris Hipkins has now jetted off to Europe. Over the weekend he and Minister for Trade and Export Growth, Damien O’Connor, signed a Free Trade Agreement with the European Union. They say New Zealand will gain up to $1.8 billion in exports to the EU annually. Meanwhile, as Australia eyes its own EU trade deal, Aussie farmers are telling their government to do better than the kiwis have.

CALL FOR MORE AS 40 YEARS OF CER MARKED
The Australia New Zealand Leadership Forum (ANZLF), a by invitation group of business and government leaders, is calling for the removal of barriers to the movement of people and goods between the two countries, and renewed focus on new areas of opportunity including climate change, the digital economy and indigenous collaboration. This comes as the 40th anniversary of the Closer Economic Relations trade agreement is marked.

SUBDUED & TOUGH
The combination of winter and a very tough housing market is keeping the number of houses selling at auction very subdued. Only 91 sold of the 213 auctions we monitored last week. Only a quarter of them made their rating valuation or more.

FRAUD PROTECTION
BNZ said it will stop sending links in text messages. The move follows Aussie parent NAB after high-profile frauds attract widespread attention. Also see this.

RBNZ READIES CAPITAL INSTRUMENT FOR MUTUAL BANKS
The Reserve Bank says development of a framework for capital instruments for mutual banks such as The Co-operative Bank and SBS Bank is nearing completion. Affected entities have an opportunity to review the documents by July 31 before the framework is finalised. The idea is to give mutually owned banks a capital instrument that could qualify as Common Equity Tier 1 capital. 

SFO FILES CHARGES AGAINST LAWYER
The Serious Fraud Office (SFO) has filed charges against a Bay of Plenty lawyer for allegedly falsely claiming almost $450,000 from a legal support scheme funded by the Ministry of Justice. Paulette Main faces 30 charges of obtaining by deception and two charges of obstructing a SFO investigation. She appeared in Tauranga District Court today and was remanded without plea. The SFO alleges Main submitted more than 1500 false claims to the Ministry of Justice’s Family Legal Advice Service (FLAS). The service funds eligible lawyers to give out-of-court advice in Care of Children Act disputes. Lawyers can claim a fixed fee from the Ministry of Justice for providing services under the FLAS. Main is next scheduled to appear on August 3.  

CHINA INFLATION FLAT
China's annual inflation rate was unexpectedly flat in June, compared with market expectations and May's figure of +0.2%. This was the lowest reading since deflation in February 2021.

CHINA PPI DROPS
China's producer prices dropped -5.4% in June from a year ago, a faster decline than a -4.6% fall in May and worse than market forecasts of a -5.0% drop. It was the ninth straight month of producer deflation and the steepest fall since December 2015. It comes amid weakening demand and fast-easing commodity prices.

SWAPS STILL RISING
Wholesale swap rates are probably up again today, although more modestly this time. 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 unchanged at 5.70% and now +20 bps above the 5.50% OCR. The Australian 10 year bond yield is up +1 bp from this time yesterday at 4.29%. The China 10 year bond rate is unchanged at 2.70%. But the NZ Government 10 year bond rate is now up +4 bps at 4.94% to a new 12-year high, and still higher than the earlier RBNZ fix which rose +2 bps to 4.82%. That's its highest since December 2013. The UST 10 year yield has edged up +2 bps to just under 4.09%.

EQUITIES MIXED (LOST?)
The NZX50 has started the week down -0.5% while the ASX200 is unchanged in early afternoon trade. Tokyo has opened down -0.6% while Hong Kong has opened the other way, up +1.1%. Shanghai has opened up +0.4%. Who knows how Wall Street will open tomorrow, it is doubtful the S&P500 futures -0.2% will be a key indicator.

GOLD HOLDS
In early Asian trade, gold is holding unchanged from where we opened this morning at US$1924/oz.

NZD HOLDS
The Kiwi dollar is little-changed, now at just on 62 USc. Against the Aussie we are down slightly at just over 92.8 AUc. Against the euro we are unchanged at 56.6 euro cents. That means the TWI-5 is still at 70.2.

BITCOIN SLIPS AGAIN
The bitcoin price has again slipped marginally lower today and is now at US$30,111 which is down another -0.5% from where we were when we opened this morning. Volatility has remained low at just under +/- 0.8%.

This soil moisture chart is animated here.

Keep abreast of upcoming events by following our Economic Calendar here ».