A review of things you need to know before you sign off on Friday; many retail rate changes, sentiment stays low, as does the housing market, some key offloads, car sales low, swaps on hold, NZD firms, & 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
TSB raised most of its fixed rates by +5 bps to +20 bps. Cooperative Bank raised its floating rate by +25 bps to 8.40% (and still below main bank levels). Bank of China has raised fixed rates by between +10 bps and +30 bps.

TERM DEPOSIT/SAVINGS RATE CHANGES
TSB raised some term deposit rates either +20 bps or +25 bps. But none are market-leading. Their 6% one year rate is unchanged. Bank of China has raised all its TD offers, although they trimmed their market-leading 6.18% one year offer back to 6.10%.

STILL UNHAPPY
Consumer confidence remained very low in August, just as it has been every month since the start of 2022. If you are looking for a 'green shoot', you will have to be satisfied with the fact that, although still deeply negative, more consumers say it is a good time to buy a major household item. Most still say 'no' but it is fewer people saying that in August. Inflation expectations were virtually unchanged at 4.6%.

CREATIVE WRITING TO THE FOREFRONT
Realestate.co.nz and CoreLogic both released August real estate market reviews, both stretching to find positives as the market exits a tough winter. The realestate.co.nz report revealed that unsold inventories are now up to 22 weeks (from 19 in July) at current sales rates. (However they were as high as 28 weeks at the start of the year.)

OFFLOADED I
Auckland Council has sold down 7% of Auckland International Airport Limited shares, as earlier signaled. They sold them at an average share price of $8.11 per share which has returned $833 mln, which will be used to reduce council debt. It retails an 11.1% holding. AIAL shares traded at $8.10/share after the announcement. Yesterday they closed at $7.88/share. In 2023 they peaked at $8.94 in late March.

OFFLOADED II
HSBC has sold its $1.4 bln mortgage book to non-bank finance company Pepper Money. HSBC is closing its retail activities here, ahead of upcoming regulator requirements for bank branches. For a bank to buy it, they would have had to allocate more than 10% of the mortgage book value they bought in capital, making it a tough ask for any smaller bank. And for a large bank, that mortgage book wouldn't move their needle. A non-bank lender currently doesn't have these capital considerations.

LONG DRY SPELLS AS EN NINO ARRIVES
NIWA's Spring Seasonal Climate Outlook today said El Niño may arrive during September. Spring rainfall is most likely to be below normal in most regions except the west of the South Island. Spring may be marked by unusually long dry spells for several regions, they say.

ICE IS ONLY FOR USED IMPORTS NOW
Car sales rose in August from July, but July was unusually low. In fact, apart from the pandemic disruption, new car sales were their lowest for an August in a decade. And they were down -36% from year ago levels. But used car sales were up +10% on the same basis. Among new cars, most sold were either electric or hybrid models, making up 57% of the new car sales totals, a new high. There were less than 3000 new ICE cars sold in each of July and August, probably the lowest since 1991. It is rather remarkable how fast new-car buyers are rejecting ICE passenger cars. Sales on new commercials were unusually low in August too, down -27% from a year ago, on top of July's -42% drop on that basis.

SUBSTANTIAL LONG TERM PROGRESS
The RBNZ reported the over banking system Core Funding Ratio as at July today. While the ratio was just a whisker below its all time high of 91.2%, total loans and advances were a record high of $524 bls, and core funding was also at a record high of $475 bln. The current 90.7% CFR is a huge improvement from when the RBNZ brought in the Core Funding limits in 2010 when they were at 78%.

CURIOSITY
The RBNZ also reported its coin minting levels for the first half of 2023. Unsurprisingly they minted nothing in this period. Apart from the pandemic spurt, they have essentially minted no new coins since 2016.

AUSTRALIA SURPRISE (NOT A GOOD ONE)
New home loan lending fell -2.3% in July from June to be -14% lower than a year ago. This same metric fell -3% in June and was expected to bounce-back in July, but that didn't happen. Lending for commercial property dived -33% on the same basis as lenders took fright at how that sector could hurt bank exposures.

CHINA SURPRISE (A GOOD ONE)
In China, the Caixin factory PMI surprised with a small expansion when a small contraction was anticipated. Given the official factory PMI out yesterday showed a contraction, this is a double surprise. The Caixin survey has been volatile about the 50 point mark for a number of months now. Their survey noted a rise in new orders overall and the downturn in new export orders easing. This wasn't what the official factory survey found however. But both surveys noted that selling prices are falling now.

SWAPS HOLD
Wholesale swap rates were probably little-changed today, but the real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is unchanged at 5.65%. Global markets are generally treading water ahead of the US non-farm payrolls and the long US holiday weekend. The Australian 10 year bond yield is down another -6 bps at 3.99%, all of that last night. The China 10 year bond rate is up +2 bps at 2.62%. The NZ Government 10 year bond rate is down -8 bps to 4.89%, but still above the earlier RBNZ fixing of 4.85%, and down -6 bps. The UST 10 year yield is unchanged from yesterday, now at 4.11%.

EQUITIES MAKE BIG WEEKLY MOVES
The NZX50 is down -0.3% near today's close, again. But if it holds that it will end the week up +0.4%. The ASX200 is down -0.4% in afternoon trade but even after that it should end its week up +2.2%. Tokyo has opened up +0.6% again and heading for a weekly rise of +2.8%. Hong Kong is closed because the city is under a typhoon watch. If it doesn't trade it will have ended its week down -0.7%. But Shanghai is down -0.4% and is heading for a -2.7% weekly drop. Wall Street ended its Thursday session down -0.2% with an end-of-session drop.

GOLD LOWER
In early Asian trade, gold is at US$1940/oz and down -US$6 for the day. Earlier it closed also at US$1940/oz in New York, and earlier still at US$1942/oz in London.

NZD EDGES UP
The Kiwi dollar has held at 59.7 USc. Against the Aussie we have risen marginally to 92.1 AUc. Against the euro we are almost +½c firmer at 55 euro cents. The TWI-5 is firm at 68.8.

BITCOIN RETREATS
The bitcoin price has slipped sharply from yesterday. It is now at US$26,032 and down -4.3% in the past 24 hours. Volatility over the past 24 hours has been high at +/- 3.6%.

This soil moisture chart is animated here.

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