A review of things you need to know before you sign off on Tuesday; More rising retail rates, commodity prices ease again, PREFU implications eyed, swaps up further on offshore drivers, NZD eases, & 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
BNZ raised fixed rates for terms 2 to 4 years. These increases leave them lower than their main rivals. Unity Money raised their two key fixed rates too. And SBS Bank ended its 3 year 5.99% fixed rate offer, reverting to 6.69% for that term.

TERM DEPOSIT/SAVINGS RATE CHANGES
And Unity Money raised their TD rates as well, taking their 6 month rate to 5.75% but leaving their 1 year rate at 6%.

COMMODITY PRICES DROP AGAIN
The ANZ World Commodity Price Index fell for the third consecutive month, dropping -2.9% in August from July to be down -14% from a year ago. Dairy and lamb prices fell while slightly stronger prices were recorded for other food commodities. In local currency terms, the index fell rose +0.6% from the prior month because the NZD depreciated -2.2% against the Trade Weighted Index. But year-on-year it was still down more than -9%.

MORE DEBT (IF NO AUSTERITY)
Today week (September 12) we will get the Treasury's Pre-Election Fiscal Update (PREFU). Analysts are assessing what is likely to come given the quickly deteriorating fiscal situation. One corner on analysis is the bond issuance program. As much as $10 bln mln extra is likely to be needed to be borrowed over the next four years to 2027. Currently extra debt issuance is scheduled as an extra +$120 bln, but that may have to rise to an extra +$130 bln over those 4 years. The last Crown financial statements revealed gross debt at $134 bln and net debt at $73 bln. From either starting point, the new debt being contemplated is a lot. And see this.

MORE POLICY UPDATES
More policy updates have been loaded to our comparisons. Today the changes are for TOP and their economic policies (including on the RBNZ mandate), TOP and their infrastructure policies, and Act and their economic targets. And there was another political poll out today. All polls are tracked here.

"THE COST IS TOO HIGH"
The high cost of doing business is the stand-out issue for businesses, according to the results of the Deloitte and Chapman Tripp Election Survey released today. 93 percent of respondents said changes made by the Government had increased their cost of doing business. And 85 percent said they didn’t think the current Government had a plan for improved economic performance.

RBNZ & FMA OUTLINE RESULTS OF GOVERNANCE REVIEW 
The Reserve Bank (RBNZ) and Financial Markets Authority (FMA) have issued a report following a review of governance practices across a sample of 29 entities from the banking, insurance, non-bank deposit taker and investment management sectors. They found "a variety of governance practices," and have provided individual feedback to those who participated. Key areas for improvement the RBNZ and FMA highlighted include formal frameworks for assessing ongoing board training, board succession planning, and capacity of directors not being assessed in a consistent and robust manner.

EYES ON THE GDT
There is a full dairy auction overnight, and all eyes will be on the WMP price. Remember, it didn't change at last week's Pulse auction.

EYES ON THE RBA
The RBA will review their cash rate target at 4:30pm today (being the first Tuesday of the month), but no-one expects any change from the present 4.10%. They have had a run of continuous small increases since May 2022, and because mortgage holders are very exposed to the floating rate, these bite almost immediately. Reportedly, more than 1½ mln Aussie homeowner-borrowers are feeling heavy home loan stress (and perhaps some remorse for overpaying). A no-change today won't change much other than not intensify the pressures. Today's meeting will be Philip Lowe's last - his term ends on September 17, 2023. (The RBA isn't the only central bank with a new boss incoming. The Monetary Authority of Singapore has also got a new leader, after the prior one retired after 10 year in the role.)

A CAUTIONARY TALE
Turkish inflation, which peaked at over 85% in October 2022, and then fell to 38% in June, is moving back up strongly again. In August it came in at 59% pa. The more conventional monetary policy that was started in July hasn't had an effect on inflation yet - nor their exchange rate either it seems. Once public policy loses control of its policy levers, it is fiendishly difficult to get it back under control. Turkey (and Argentina) remain cautionary tales for most other central bankers.

EXPANDING STILL BUT A SHARP TURN LOWER
In China, the private Caixin service sector PMI for August came in weaker than expected (in contrast to their factory PMI which came in better). The Caixin services PMI is at 51.8 and down sharply from the July 54.1. That is twelve straight months of expansion although the August result is the weakest in that sequence in 2023. (50 is neither expandin nore contracting.) The official services PMI for August was recorded at 51.0. But at least they are still expanding.

SWAPS UP
Wholesale swap rates were probably higher today, with the upward pressure staying strong, but the real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is up +1 bp to 5.66%. The Australian 10 year bond yield is up another +5 bps at 4.14%. The China 10 year bond rate is up +3 bps at 2.62% continuing its rise. The NZ Government 10 year bond rate is back up another +7 bps to 5.03%, and still above the earlier RBNZ fixing of 4.96% which was up +11 bps today. The UST 10 year yield is up +1 bp from this time yesterday, now at 4.21% and still holding its gain from the end of last week.

EQUITIES ALL LOWER
The NZX50 is down -0.6% near today's close. The ASX200 is also down -0.6% in afternoon trade and giving up yesterday's gain. Tokyo has opened down -0.3% to start its Tuesday. Hong Kong is down -1.5% in early trade with yesterday's positive vibes vanishing. Shanghai has its Tuesday down -0.7%. Wall Street is still on a long weekend holiday. The S&P500 futures are very little changed again today so no big moves are expected wen Wall Street returns tomorrow.

GOLD SOFT
In early Asian trade, gold is at US$1935/oz and down -US$9 from this time yesterday. Earlier it closed at US$1937/oz in London. (New York was closed.

NZD LOWER
The Kiwi dollar has retreated about -¼c to 59.2 USc from this time yesterday. Against the Aussie we are marginally softer 92 AUc. Against the euro we are down -¼c too, now at 54.9 euro cents. The TWI-5 is now at 68.5.

BITCOIN IN SMALL RETREAT
The bitcoin price is lower from, this time yesterday, now at US$25,731 and down almost -0.7%. Volatility over the past 24 hours has been low at just over +/- 0.8%.

This soil moisture chart is animated here.

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