A review of things you need to know before you sign off on Friday; some minor rate changes, cost of living still high, consumer sentiment in surprising gain, EV insurance tough for all, swaps slip, NZD low, & 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
Kainga Ora has reduced all its fixed rates today by between -10 bps and -29 bps. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ has cut term deposit rates for terms longer than 18 months, all by -20 bps. All rates less than 1 year are here, for 1-5 years, they are here.

STILL HIGH, BUT LESS SO
The cost of living for an average NZ household climbed 5.4% in June quarter from a year ago, said Statistics NZ, pushed up by interest payments and insurance costs. That is down from 6.2% in the march quarter.

'A LITTLE BRIGHTER'
The ANZ-Roy Morgan monthly consumer confidence survey actually recorded a small rise in July, off its very low June level. Inflation expectations fell. More people think they will be better off in 2025.

INDONESIA NOTICES NZ
Indonesia’s Foreign Minister, Retno Marsudi, will visit New Zealand next week.

NEW BOARD MEMBER
ANZ NZ today announced that Nagaja Sanatkumar will join its Board with effect from August 19. This adds to her other board directorships at Meridian Energy, Southern Cross Healthcare, Southern Cross Medical Care Society, Foodstuffs, the Crawthorn Institute, and Tuatahi First Fibre.

HANDBOOK UPDATE
The RBNZ has updated its Monetary Policy Handbook. This follows The Remit Review of the Monetary Policy Committee and subsequent changes in 2023, and the Reserve Bank’s legislative framework updates. They have also made use of a broader range of monetary policy tools.

A COST-PRICE CHALLENGE
In the world's largest EV market, China, insurers are facing profitability challenges with NEVs due to high risk and regulatory pricing constraints despite increased premiums, according to Caixin. NEVs are more prone to claims, expensive to repair, and heavily used in the ride-hailing industry, leading to higher insurance loss ratios.

FAST UP, SLOW DOWN
In its weekly update, the US Fed said its balance sheet is still shrinking, (down to US$7.2 tln) but not as fast as earlier, and it is still not down to its pre-pandemic levels (of US$4.2 tln). The RBNZ balance sheet is also on a slow shrink, and also far, far larger still ($84.5 bln) than pre-pandemic ($31 bln).

COVERED BONDS STRONGER THAN MANY COUNTRIES
Most covered bond programmes are sufficiently strong to withstand the economic consequences from a sovereign default, Fitch Ratings said in its latest Covered Bonds Snapshot report. A majority of rated covered bonds programmes have higher ratings than their relevant sovereigns. Overall, covered bonds programmes are on average rated almost two notches above the sovereign Local Currency Issuer Default Rating.

SWAP RATES REMAIN WEAK
Wholesale swap rates are likely to be again influenced by low loan demand and downward receive-side pressure at the short end. (See this.) Our chart below will record the final positions. The 90 day bank bill rate is down -1 bp at 5.48% and another 110 day low. The Australian 10 year bond yield is down -3 bps from this time yesterday to 4.34%. The China 10 year bond rate is down -2 bps at 2.21% in what looks like a controlled easing. The NZ Government 10 year bond rate is down -3 bps at 4.44% and the earlier RBNZ fix was at 4.43% and up +1 bp from this time yesterday. The UST 10yr yield is down -2 bps at 4.25%. Their 2yr is now at 4.44%, so that curve is now inverted by -19 bps.

EQUITIES MOSTLY LOWER, BUT NOT THE ASX
The NZX50 is down a marginal -0.1% in late trade. The ASX200 is up +0.9% in afternoon trade mostly recovering yesterday's hard drop. Tokyo has opened its Friday trade up +0.5%. Hong Kong is down -0.3% at its open. Shanghai is also down -0.3%. Singapore is little-changed. Wall Street ended its Thursday trade with the S&P500 down another -0.5%.

OIL TURNS UP
The oil price is up +US$1.50 to just under US$78.50/bbl in the US, and now at US$81.50/bbl for the international Brent price. Demand expectations on the stronger US economy is driving this.

CARBON PRICE HOLDS SOFT
Today the carbon price fell marginally again, now $50.25/NZU and down from $50.50/NZU at this time yesterday.

GOLD HOLDS
In early Asian trade, gold is up a minor -US$2 from this time yesterday at US$2373/oz.

NZD SOFTER
The Kiwi dollar is down -¼c from this time yesterday, now at 58.9 USc. Against the Aussie we are dow3 -½c at 89.9 AUc. Against the euro we are down similarly at 54.2 euro cents. This all means the TWI-5 is now under 68 with a -40 bps fall.

BITCOIN BOUNCES BACK
The bitcoin price is up +4.1% from this this time yesterday, now at US$ 66,807. Volatility of the past 24 hours has been moderate at just on +/- 2.8%.

USE OF AI
No articles on this news service are produced with AI. Occasionally we use AI to derive images. They are always identified in the attribution.

This soil moisture chart is animated here.

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