A review of things you need to know before you sign off on Tuesday; quiet on the retail rate front, realtor commissions sink with market, eyes on dairy prices and CPI, insurance premium cost risk rises, swaps ease, NZD falls, & 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. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes today here either, so far. All rates less than 1 year are here, for 1-5 years, they are here.

TURNING LOWER FAST
Residential sales commissions were savaged in June and the outlook for July is not much better. But because April & May were ok, overall Q2 commission levels held their own.

KIWIBANK SENTENCING IN OCTOBER IN COMCOM CASE
Kiwibank is set to be sentenced on October 17 after pleading guilty to criminal charges brought by the Commerce Commission under the Fair Trading Act. The charges came after Kiwibank self-reported to the consumer watchdog. The bank is undertaking a remediation program after overcharging some 36,000 customers more than $7 million for fees and interest rates in relation to home loans, credit cards and overdrafts between 2019 and this year. The 21 charges each have a maximum potential penalty of $600,000.

DAIRY PRICES ON THE BACK FOOT?
There is another dairy auction tomorrow morning and it promises to be another tough one. The June 18 event fell -0.5%, the July 2 event fell -6.9% and the signals from the dairy futures market point to lower prices again. This signals suggest SMP could be down another -2% and WMP could be -6% lower tomorrow. If that is the case it will bring the string of lower prices for SMP and WMP to seven consecutive events (full and Pulse). It is unlikely the analysts who monitor these prices for their farmgate payout forecasts can overlook this trend. Still, tomorrow's auction hasn't happened yet, so it may not turn out to reinforce the recent trend.

OCR CUTS ON THE FRONT FOOT?
Tomorrow we also get the key Q2-2024 CPI result. Join us at 10:45am for full coverage. This may well indicate how likely OCR rate cuts are in 2024. Financial markets have a 50/50 chance the first -25 bps one will come on August 14 (ie in a month), and a full chance of the first one by October 9, then another (or even -50 bps) on November 27, and in fact maybe a further -50 bps on February 19, 2025. So these markets have priced in an OCR shifting down to 4.50% by mid February. Tomorrow's CPI data is keenly awaited. More here.

INSURANCE PREMIUM RISK RISES
The Insurance Council has told Parliament’s Finance and Expenditure Committee that natural hazard events and risks are affecting global reinsurers’ view of NZ. There are coverage capacity limit and premium cost implications here.

COMCOM STILL WORRIED ABOUT FOODSTUFFS MERGER
The Commerce Commission says it’s still not satisfied that the proposed merger of the two Foodstuffs co-ops won’t have the effect of “substantially lessening” New Zealand's grocery competition. ComCom released its Statement of Unresolved Issues (SOUI) on Tuesday where it again outlined concerns with the proposed merger. ComCom says if the Foodstuffs merger is cleared, it will create the largest acquirer of groceries in New Zealand which means many suppliers will be selling most of their output to just two major grocery retailer customers – the merged entity and Woolworths – rather than the existing three. ComCom is concerned that this will increase buyer power, worsen the bargaining imbalance between suppliers and the Parties, and significantly reduce competition in the grocery markets. ComCom is set to make a decision on if it will clear or decline the proposed merger by the 1st October but says this date may change as its investigation progresses.

RABOBANK FILLS ITS BOOTS
Rabobank NZ (Branch) originally launched a 5 year NZD bond issue seeking $175 mln. Then it offered over subscriptions of another $75 mln. And now it has raised that again to a total issue of $350 mln. The offer was filled with a yield of 5.31% pa being +85 bps over the 5 year swap rate.

SWAP RATES SETTLE LOWER
Wholesale swap rates are likely to be marginally softer again today with downside risk. Our chart below will record the final positions. The 90 day bank bill rate was little-changed at 5.55%. The Australian 10 year bond yield is down -7 bps from this time yesterday at 4.30%. The China 10 year bond rate is little-changed at 2.26%. The NZ Government 10 year bond rate is down another -5 bps at 4.46% and the earlier RBNZ fix was at 4.41% and down another -8 bps from yesterday. The UST 10yr yield is down -2 bps at 4.22%. Their 2yr is now at 4.45%, so that curve is now a bit more inverted, by -24 bps.

EQUITIES MIXED
The NZX50 is little-changed today from yesterday in late trade. The ASX200 is down a minor -0.1% in afternoon trade. Tokyo has opened its Tuesday trade up +0.5%. Hong Kong is down -1.2% however is a sharpish retreat. Shanghai is down -0.3%, as is Singapore. Earlier, Wall Street rose +0.3% on the S&P500. That remains high but is not an ATH. But the Dow did hit an ATH, and the Nasdaq touched that benchmark too.

OIL LOWER
The oil price is down a bit more than -50 USc at just under US$81/bbl in the US, and now just on US$84/bbl for the international Brent price.

GOLD FIRM
In early Asian trade, gold is virtually up +US$16 from this time yesterday at US$2426/oz.

NZD EASES FURTHER
The Kiwi dollar is down -½c from this time yesterday, now at 60.5 USc. Against the Aussie we are down -20 bps at 89.8 AUc. Against the euro we are down another -40 bps at 55.6 euro cents. This all means the TWI-5 is now just on 69.3 and down -40 bps.

BITCOIN RISES STRONGLY AGAIN
The bitcoin price is up +3.6% from this time yesterday at US$68,649. Volatility of the past 24 hours has been moderate at just on +/- 2.6%.

This soil moisture chart is animated here.

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