A review of things you need to know before you sign off on Monday; ASB makes home loan and TD changes, Auckland dwelling completions hold for now, trade in surplus, swaps rise, 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
There were home loan rate changes from ASB and TSB today. Unity Money and Heretaunga Building Society both trimmed rates too. More here. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
Both ASB and TSB also cut term deposit rates today. Heretaunga Building Society trimmed rates too. All rates less than 1 year are here, for 1-5 years, they are here. Interestingly, there haven't been any reductions to savings account rate yet.

DOWNWARD TRAJECTORY
The number of new dwellings being built in Auckland is slowly declining from last year's peak. At 1683 residential completion certificates issued in May, that is up +12% compared to May last year, but down from the peak of more than 1900 a month in each of the three months from September to November. Building permit issuance foretells further declines ahead.

SOME REGIONS HURTING NOW, SOME STILL TO FEEL IT
As we have mentioned before, we are monitoring the commercial lease listings on realestate.co.nz for signs on SME stress (and commercial landlord stress). We should note that in Wellington, these offers of commercial space for lease are up almost +50% in the past 13 weeks (+47.6%). In Hamilton the rise is +13% in the same period. In South Auckland, it too is up +14%. Queenstown up +30% but on a small base. But on Auckland's North Shore, in the Queen City's central districts, Tauranga, and in Christchurch, the rises are modest, up less than +5% in three months.

FROM TRADE DEFICIT TO TRADE SURPLUS
Perhaps it will be no surprise that demand for imports is shrinking. But that is swelling our goods trade surplus. It came in at almost +$700 mln (a four-year high) when +$294 mln surplus was expected. Compared with June 2023, June 2024 goods exports fell by -$7.4 mln or -0.1%, to $6.2 bln. But goods imports fell by -$821 mln of -13%, to $5.5 bln. So our surplus in the month was +$699 mln. In June 2023 is was a deficit of -$115 mln. In June 2022 it was a deficit of -$1.13 bln. That is notable progress on the trade front. In the year to June, our surplus with China has nearly halved. But that has been replaced by a big swing to a substantial surplus with the USA. And we no longer run a significant trade deficit with Australia (it is now minor). And although our big deficits with Japan and South Korea are little-changed, a sharp fall in car imports (-12.3%) will fix that quickly.

BNZ RAISING TIER 1 FUNDING
BNZ announced today that it is considering making an offer of up to $100 mln of perpetual preference shares, with the ability to accept oversubscriptions at BNZ's discretion. These preference shares will not have a fixed term and will remain on issue indefinitely if not redeemed by BNZ. If certain conditions are met, BNZ may redeem them after 6 years. They are likely to have a BBB+ credit rating from S&P.

KIWIBANK DIRECTOR REVERSES DEPARTURE
Having announced on July 1 that Scott Pickering would leave its board on August 31, Kiwibank now says Pickering has withdrawn his resignation and will serve his full term. The bank says the change comes following "further assessment of his new governance opportunities" by Pickering. Kiwibank says its board is very supportive of the decision.

LOAD SHEDDING
Earlier today, the Tiwai Point aluminium smelter said it will reduce its electricity usage by a total of 185 megawatts from early August, in response to an additional demand response call from Meridian Energy this morning. This represents approximately 4% of the country’s electricity use and replaces the 100MW ramp down that Meridian had requested last week.

CHINA CUTS RATES, LOOSENS COLLATERAL REQUIREMENTS
The People's Bank of China unexpectedly cut key lending rates by -10 bps to fresh record lows. The 1-year loan prime rate (LPR), the benchmark for most corporate and household loans was cut to 3.35%. Meanwhile, the 5-year rate, a reference for property mortgages, was trimmed to 3.85%. Today's decision came days after the Third Plenum meetings at the end of last week, and follows a slew of data that indicated the Chinese economy continues to lose steam. At the same time, the central bank reduced its collateral requirement for its MTF facility.

SWAP RATES FIRM
Wholesale swap rates are likely to be a little firmer today on international influences, especially at the long end. Our chart below will record the final positions. The 90 day bank bill rate was up +1 bp at 5.55%. The Australian 10 year bond yield is up +2 bps from this morning to 4.36%. The China 10 year bond rate is down -2 bps at 2.25% after the LPR cuts. The NZ Government 10 year bond rate is up an unexpected +8 bps to 4.48% and the earlier RBNZ fix was at 4.40% and up +5 bps from this time Friday. The UST 10yr yield is down -1 bp at 4.23%. Their 2yr is now at 4.51%, so that curve is still inverted by -28 bps.

EQUITIES RETREAT EVERYWHERE
The NZX50 is up +0.4% in late trade to open the week. The ASX200 however is down -0.6% in afternoon trade. Tokyo has opened its Monday trade down -1.2%. Hong Kong is +0.9% higher however. But Shanghai is -0.7% lower. Singapore has opened unchanged. The S&P500 futures suggest Wall Street will open tomorrow up +1.1%.

OIL HOLDS
The oil price is up +50 USc at just on US$79/bbl in the US, and now just under US$82.50/bbl for the international Brent price.

GOLD FIRMS
In early Asian trade, gold is up +US$8 from this morning at US$2408/oz.

NZD HOLDS LOWER
The Kiwi dollar is little-changed at 60 USc. Against the Aussie we are still at 90 AUc. Against the euro we are down -10 bps at 55.1 euro cents. This all means the TWI-5 is still just on 69.

BITCOIN RISES
The bitcoin price is up +2.4% from this morning's open, at US$68,168. ETF whales are influencing this. Volatility of the past 24 hours has been moderate at just on +/- 2.0%.

This soil moisture chart is animated here.

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