A review of things you need to know before you sign off on Friday; house vendors accept lower offers, Fonterra cuts again, tractor sales low, farms to be in ETS, swaps firmish, NZD holds, & 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
Nothing again today. Update: SBS Bank has reduced its three year fixed rate by -30 bps to 5.99%.

TERM DEPOSIT/SAVINGS RATE CHANGES
The Co-operative Bank pushed through some minor increases to rates today. Update: SBS Bank said it was reducing its market-leading one year TD rate from 6.50% to 6.00%.

VENDORS ADJUST LOWER
The gap between the price vendors expect to receive for their properties and the price buyers are prepared to pay continues to narrow. It is sellers/vendors who are lowering their price expectations, falling to meet buyer expectations.

ANOTHER MILK PRICE CUT
Just two weeks after their cut their milk payout indication by -$1, Fonterra have cut it further by another -25c, following the latest negative dairy auction. Both will mean more than $5 bln less will be paid to farmers next year than for the current season. But the new season is only just starting, so there are many more forecasts yet to be worked through.

CAPITAL RETURNED TODAY
Fonterra today returned more than $80 mln to its shareholder farmers, a capital return from the divestment of a number of offshore subsidiaries. This will go some way to cushioning the payout cuts.

NEW TRACTORS A HARD SELL NOW
There were only 179 new tractors registered in July nationwide, the lowest since 2017. The ten year average for a July is 235, so July 2023 is -24% lower than that. In July 2021, more than 320 new tractors were sold, almost double the 2023 level.

'CERTAINTY' ARRIVES
The Government released its decision on the issues He Waka Eka Noa advised on. They have come down on the side of doing everything inside the Emissions Trading Scheme. That will include 'rewarding on-farm sequestration' that can be validated scientifically. Native vegetation or riparian plantings will be recognised. But there is more work to do for this comprehensive system and it won't start until late 2024, and roll out for full implementation by Q4-2025. That means it will be vital for farmers to accurately measure and manage their emissions, prior to the start of farm-level pricing. A lot of the drive for a full ETS-based system is coming from European-based customers of dairy and meat products, like Nestle. More here.

PROPERTY MANGERS TO BE LICENSED
Residential property managers are going to be licensed. However private and public landlords, including Kāinga Ora and registered Community Housing Providers, would not come under the new regime.

JAPANESE INFLATION STAYS ELEVATED
The Japanese CPI inflation rate was unchanged at +3.3% in July but this was notably higher than market forecasts of +2.5%. Core inflation stayed above 3% too. Prices continued to rise for food which was up +8.8% in July from a year ago, compared with +8.4% in June. The latest figures are well above the Bank of Japan's 2% target, and for the 16th consecutive month.

EVERGRANDE RUNS AGROUND
China's Evergrande Group, once the country's second-largest property developer, filed for bankruptcy in New York earlier today. It was a Chapter 15 bankruptcy filing meaning its actually a Chinese bankruptcy, a move that protects its US assets from creditors while it works on a restructuring deal elsewhere. Rival Country Garden, another very large property developer, is going down the same 'restructuring' path.

SWAPS A TOUCH HIGHER
Wholesale swap rates were probably a touch higher today although probably not significantly, but the real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is unchanged yet again at 5.64% and now +14 bps above the 5.50% OCR. The Australian 10 year bond yield is unchanged from this time yesterday at 4.28%. The China 10 year bond rate is little-changed at 2.58% and a new three year low. And the NZ Government 10 year bond rate has settled at 5.11% and still its highest since 2011, and still higher than the earlier RBNZ fix which was up +4 bps bps to 5.02%. That is the RBNZ's series highest since July 2011. The UST 10 year yield is at 4.26% and down -3 bps from yesterday.

EQUITIES LOWER AGAIN
The NZX50 is down -0.7% today in late trade on a global risk-off vibe and rising benchmark yields and down -2.3% so far this week. The ASX200 is up +0.2% in afternoon trade, and down -2.5% so far for the week. Tokyo has opened its Friday session down -0.2% in morning trade heading for a -2.8% weekly fall. Hong Kong has opened down another -0.7% and heading for a -2.7% weekly fall. Shanghai however is benefiting from 'home team' support, up a minor +0.1% starting today, and up +0.2% for the week so far. Everything is required to be 'positive' in China now. The S&P500 ended its Thursday session down another -0.8%. That puts it down -2.1% for the four days of their week so far.

GOLD HOLDS
In early Asian trade, gold is at US$1893/oz and little-changed from yesterday. Earlier in New York it closed at US$1889, and earlier still in London it closed at US$1894/oz.

NZD HOLDING
The Kiwi dollar is a little firmer today, up +20 bps from this time yesterday at just under 59.4 USc. Against the Aussie we holding softer at 92.5 AUc. Against the euro we little-changed at 54.5 euro cents. That means the TWI-5 is at 68.6 and firmer by about +20 bps.

BITCOIN DIVES
The bitcoin price is sharply lower today, now at US$26,420 and down -7%. At one point it was under US$25,400. Volatility has been extreme at just on +/- 8.5%. The latest dump came after the WSJ discovered that Elon Musk had been writing down his holdings in SpaceX over the past two year - over the same period he had been spruiking his 'interest' in crypto. A classic Musk manipulation.

This soil moisture chart is animated here.

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