A review of things you need to know before you sign off on Friday; consumer sentiment sags, trade deficit high, daylight saving starts, swaps higher again, 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
No changes to report today so far. But watch out for some in the coming week or two as wholesale rates surge.

TERM DEPOSIT/SAVINGS RATE CHANGES
SBS Bank raised their 5 and 6 month TD rates.

SENTIMENT STAYS LOW
Consumer sentiment is sagging as financial pressures bite. That is what the Q3 survey from Westpac-McDermott Miller shows. Household budgets are being squeezed by further increases in living costs and mortgage payments. Westpac says they expect spending will remain soft as we head in to the new year. They point out that low confidence is across all age groups, income brackets and regions.

AUGUST WAS A TOUGH TRADE MONTH, AS USUAL
The August merchandise trade deficit was its usual large negative. This year it recorded a -$2.3 bln deficit, less than last year's -$2.6 bln deficit, but $158 mln more than the 2021 version. It is the start of four consecutive months of large deficits when imports peak. August 2023 exports were -5.6% lower than a year ago but +14.3% higher than two years ago. Imports were -8.1% lower than last year, but +12% higher than two years ago. We ran smaller deficits in August with China and Australia, a small surplus with the US, and a larger deficit with Japan.

DAYLIGHT SAVINGS BEGINS
Daylight savings time kicks in this weekend. Clocks will go forward by one hour at 2am Sunday, September 24. Daylight Saving time will continue until 3am Sunday April 7, 2024. If you are working when Daylight Saving begins and the clocks go forward, you actually work an hour less, but you are entitled to payment for your normal hours. For example, if you were meant to work from midnight to 8am you will only work 7 hours, but you are entitled to be paid for 8 hours of work. If you are working when Daylight Saving ends and clocks go back an hour, you are entitled to any extra hours that you work. For example, if you were meant to be working from midnight to 8am, you actually work 9 hours and you are entitled to be paid for 9 hours of work.

EMBEDDED 3% INFLATION, BUT NO REACTION
Japan said its CPI inflation rate in August was little-changed at 3.2% from 3.3% in July, but that was its lowest reading in three months. Prices continued to rise for food however, up a sharp 8.6%, offset by even sharper falls for fuel, down -12.3%. Outside these, core inflation was unchanged at 3.1% and that makes it 17 straight months core inflation has been above the Bank of Japan's 2% target. They must be ready to change policy settings. In fact, the central bank met today and didn't make any headline change in a unanimous decision. The lack of any clear sign of a shift in its policy stance puts a damper on market speculation over the prospects for a near-term interest rate hike. And it is fueling pressure on the yen.

JAPANESE FACTORIES DIP, SERVICES EXPAND
The latest Markit PMI for Japan shows factory activity contracted a bit faster in September than the previous month, and sharper than market forecasts so they now have a fourth straight month of fall in factory activity and the steepest drop since February. But their services sector is still expanding at a healthy rate.

AUSSIE BUSINESS STILL TEPID
Meanwhile in Australia, their services sector shifted out of contraction - just, but their factory sector is still contracting, extending that to a 3 month low.

SWAPS MOVE UP AGAIN
Wholesale swap rates pushed a bit higher yet again today across the whole curve, probably up about +5 bps. Update: In the end they eased lower slightly. 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 at 5.70%. The Australian 10 year bond yield is up +3 bps to 4.35%. The China 10 year bond rate is unchanged at 2.70%. The NZ Government 10 year bond rate is up +3 bps to 5.25% and a new high, but still well above the earlier RBNZ fixing of 5.19% which was also up +3 bps today. The UST 10 year yield is now over at 4.50% which up another +6 bps from this time yesterday and more than a 15 year high (back to levels pre-GFC). But the UST 2yr has slipped -5 bps too, to 5.14% although that is up at October 2000 levels.

EQUITIES WEAK AGAIN
The NZX50 is down -0.5% today and heading for a -0.8% weekly loss. The ASX200 is also down -0.5% in afternoon trade but is heading for an uncomfortable -3.4% weekly loss. Tokyo is down -0.9% and if that holds it will also end down -3.4% for the week. Hong Kong has opened up +1.1% but so far this week is down -1.2%. Shanghai has opened up +0.7% and might make back the weekly -0.1% drop so far. The S&P500 ended its Thursday down -1.6% and will enter its Friday session down -2.7% so far for their week.

GOLD EDGES DOWN FURTHER
In early Asian trade, gold is at US$1923/oz and down -US$3 from this time yesterday. It closed earlier in New York at US$1920/oz, and earlier still in London at US$1915/oz.

NZD FIRMER
The Kiwi dollar is up +30 bps from this time yesterday, now at 59.3 USc. Against the Aussie we are up +20 bps to 92.4 AUc. Against the euro we are little-changed at 55.7 euro cents. The TWI-5 is up from yesterday to just over 68.5.

BITCOIN MOVES DOWN AGAIN
The bitcoin price is slightly lower again today, now at US$26,622 and down -1.3% from this time yesterday. Volatility over the past 24 hours has been modest at just under +/- 1.4%.

This soil moisture chart is animated here.

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