A review of things you need to know before you sign off on Thursday; more homes sell at a loss, more milk price cuts, farmers grumpier, less concrete poured, swaps steepen, NZD on hold, & 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
HSBC has raised the rate on its only fixed home loan offer by +10 bps to 7.19%.

TERM DEPOSIT/SAVINGS RATE CHANGES
HSB also raised its few very short term deposit rates by between +15 bps and +20 bps.

MORE HOMES SELL AT A LOSS
CoreLogic says the proportion of residential properties being sold at a loss is on the rise. They say more than one-in-10 of the residential properties being sold in Auckland and Hamilton are being sold at a loss.

HARD PAIN IN THE MILKING SHED
ANZ is the latest to cut its farmgate milk payout forecast for the new 2023/24 season. And this is the second cut in less than a month. ANZ now says farmers should plan on a $7.15/kgMS return. This comes just a day after Westpac cut theirs for a second time in three weeks as well, to $7.50/kgMS. Rabobank is preparing their updated forecast and it will undoubtedly be a hard trim too (they are currently at $8.20). All this is very painful because for the average dairy farmer, breakeven is probably at about $8.25. It is all very fluid right now. You can compare all analyst forecasts, including the NZX-Dairy one, here. But lets not forget that Fonterra farmers will be getting a sizable Capital Return payout from the Co-ops divestment program next week. In the short term, the cash will be flowing in.

GRUMPIER ON THE FARM
A recent survey by Federated Farmers of over 1000 dairy, sheep, beef, and arable farmer-members has found that confidence in the sector was at historic lows in July. And because this survey occurred before Westpac and ANZ cut their new season dairy milk payout forecasts to about -$1 below average break-even, it is certain to have fallen since.

ADAPTION & MITIGATION
But it isn't all bad news in the sector (although this 'good news' will cost adopting farmers), the Environmental Protection Authority has approved a DSM feed additive to reduce methane emissions in ruminant animals (including cows, sheep and goats) by -30%. More here.

IT'S POURING IN THE REGIONS
Ready-mixed concrete poured in Q2-2023 totaled 1,073,000 m3. But that was down -10% from Q2 a year ago, and now down -4% for the year to June from the same period a year ago. A year ago the pour was the second highest of all time. Of more concern is the almost -20% fall in metropolitan Auckland Q2-2023 vs Q2-2022. Interestingly, ready-mixed concrete poured in metropolitan Christchurch actually rose on that same basis by almost +14%. But Auckland only accounts for a quarter of the read-mixed concrete market, Wellington only 5% and Christchurch 10%. The other 60% is outside these three major urban centers.

RISING YIELDS
There were 124 bids totalling $1.376 bln in today's NZGB Treasury tender for the $500 mln available in 3 tranches. Yields rose in each, up +10 bps for the May 2026 offer to 5.06%, up +24 bps to 4.80% for the May 2032 offer, and up +25 bps to 4.94% for the May 2037 offer.

EYES ON US INFLATION
Analysts are expecting the US CPI inflation rate to rise to 3.3% for July, up from 3.0% in June. Core inflation is expected to hold at 4.4%. Any variances from these expectations are likely be market moving.

PRODUCER PRICES UP SLOWER IN JAPAN
In Japan, producer prices are still rising, but at a slower rate. They rose 3.6% year-on-year in July, the least since March 2021, after an upwardly revised 4.3% rise in June and compared with market expectations of 3.5%. The latest result also marked the 7th straight month of a slowdown in producer inflation, amid the easing global cost pressures. (Japanese consumer price inflation ran at 3.3% in June and their July CPI data will be released on August 17, 2023.)

EASING SLOWLY
In Australia, inflation expectations fell to 4.9% in August, from 5.2% in July.

SWAPS LITTLE-CHANGED
Wholesale swap rates are probably little-changed at the short end and up modestly for longer 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 5.63% and now +13 bps above the 5.50% OCR. The Australian 10 year bond yield is up +2 bps from yesterday at 4.03%. The China 10 year bond rate is little-changed at 2.67%. And the NZ Government 10 year bond rate is up +7 bps from this time yesterday at 4.88%, and still very much higher than the earlier RBNZ fix which was up +4 bps bps at 4.78%. The UST 10 year yield is at 4.03% and up a mere +1 bp from yesterday.

EQUITIES GENERALLY LOWER ON EXTENDED RISK-OFF MOOD
The S&P500 ended its Wednesday session on Wall Street down -0.7%. Tokyo has opened its Thursday session up +0.4%. Hong Kong is down -0.4% but Shanghai is up +0.2%. The ASX200 is unchanged in afternoon trade, but the NZX50 is down -0.2% in late trade.

GOLD LOWER AGAIN
In early Asian trade, gold is at US$1917/oz and down a further -US$12 from yesterday. It closed earlier in New York at US$1913, and earlier still in London at US$1923/oz.

NZD STALLED
The Kiwi dollar is only marginally firmer from this time yesterday is just on 60.7 USc. Against the Aussie we are also marginally firmer at 92.7 AUc. Against the euro we holding at 55.3 euro cents. That means the TWI-5 is at 69.3 and little-changed.

BITCOIN NOT GOING ANYWHERE
The bitcoin price has slipped slightly from yesterday, now at US$29,601 and down a minor -0.5%. Volatility has been modest at just under +/- 1.3%.

This soil moisture chart is animated here.

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