A review of things you need to know before you sign off on Monday; filled jobs slip lower, farmers unhappy, schedules rise, FBU takes another hit, Comvita disappoints, swaps hold, 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
Only the Police Credit Union changed rates today, trimming their fixed rates. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
The Police Credit Union also trimmed their TD offers. All rates less than 1 year are here, for 1-5 years, they are here.

BRACE FOR AN EVEN TOUGHER LABOUR MARKET
Today’s lower filled jobs figures for June and the downward revisions to April and May bolsters the case our labour market is weakening fast. The Q2-2024 labour market data is due Wednesday, August 7, and while those are likely to be weak they are only the start of the realignment.

THE BLAME GAME
Because they have borrowed too much, many farmers are looking for others to blame. The latest Fed Farmers sentiment survey is an outlet for the perceived grievance. They are not blaming consumers for not paying enough, nor the level of debt they have taken on board. Instead they blame "the banks" because they are worried about their borrowers weakening financial position. It is hard to tell whether this is 'real sentiment' or just an easy outlet.

SEASONAL PRICE RISES
We are seeing rising schedule prices from most meat processors. But interest from the markets remain quiet as most buyers are aware that there is currently very little stock being processed locally. Bobby veal production starts next week, 90% of the upcoming production has been forward sold. Beef pricing in the US remains strong as their domestic slaughter remains lower than expected. In the past four weeks the cow and bull slaughter in the US was down almost 100,000 head compared to the same 4 week last year. Bull price offers are rising here and are now up +10% from the same week a year ago. For steer, recent rises put them now up +6% on the same basis. But for lamb they are now down -2% on that basis despite a recent rise. The biggest increases are from South Island processors.

SHIP FAILURE
It is not only the Cook Strait ferries. Fletcher Building's Northland cement is facing higher costs because the ship it leases has a major mechanical issue, laying it up at Northport awaiting repair. The additional costs for Portland-supplied cement (Golden Bay brand) will hit the FBU results by up to $30 mln for the additional costs of distribution by alternate means (barge, rail and road). FBU can't seem to catch a break at present.

"CHALLENGING"
Comvita downgraded its earnings guidance on weak prospects in China, and the spreading impacts on other Asian markets. They say sales will be down -$7 mln on the prior guidance, but profits will vanish. EBIT could be down -$11 mln they say.

WATCH THE WEATHER
A large area of low pressure is bringing severe weather this week. MetService is forecasting rain, snow, and strong winds and a raft of Watches and Warnings are in place for a wide swathe of the country.

SETTING & KEEPING THE PACE
Auckland Council has updated its Economic Monitor to 2024, showing the City's workforce has significantly diversified since 2019, with growing numbers of Asian, Māori and Pacific peoples and fewer European workers. It also shows the Auckland’s economy grew +10% from 2019 to 2023, matching the national average. This was despite enduring longer and more frequent lockdowns compared to the rest of New Zealand during the pandemic period. The average Aucklander earned $81,400 in 2023, which is +14.8% greater than the average across the rest of the country. Earnings growth has kept pace with inflation since 2019. In 2023, the region’s economy grew faster than the rest of the country, generating $143 bln in GDP.

INTERVENTION CAPACITY LITTLE-CHANGED
RBNZ intervention capacity bounced back in June from May, now at NZ$20.9 bln. But to be fair most of this was probably due just to NZD shifts. By any measure NZ$20 bln would be inadequate to defend the NZD for any length of time.

SWAP RATES ON HOLD
Wholesale swap rates are probably little-changed-to-soft. Our chart below will record the final positions. The 90 day bank bill rate is down -2 bps at 5.46% and a new 115 day low. The Australian 10 year bond yield is down -1 bp from this morning to 4.30%. The China 10 year bond rate is down -2 bps at 2.18% in an extended easing. The NZ Government 10 year bond rate is up +1 bp at 4.41% and the earlier RBNZ fix was at 4.37% and down -6 bps from Friday. The UST 10yr yield is down -2 bps at 4.18%. Their 2yr is now at 4.36%, so that curve is still inverted by -19 bps.

EQUITIES MOSTLY REBOUND
The NZX50 is down a marginal -0.1% in late trade. The ASX200 is up +0.8% in afternoon trade. Tokyo has opened its Monday trade up a very strong +2.0%. Hong Kong is up +1.2% at its open. Shanghai is down -0.1%. Singapore is up +0.7%. Futures trading suggests Wall Street will open tomorrow with the S&P500 up about +1.1%.

OIL FIRMER
The oil price is up +50 USc to just under US$76.50/bbl in the US, and now at US$80.50/bbl for the international Brent price.

CARBON PRICE INCHES LOWER
Today the carbon price fell again, but only slightly, now $50.10/NZU and down from $50.25/NZU at this time Friday.

GOLD FIRM
In early Asian trade, gold is up a minor +US$6 from this morning at US$2392/oz.

NZD HOLDS
The Kiwi dollar is holding from this morning's open, now back at 59 USc and up +15 bps. Against the Aussie we are holding at 89.9 AUc. Against the euro we are fractionally firmer at 54.3 euro cents. This all means the TWI-5 is now just on 68 and little-changed.

BITCOIN RISES
The bitcoin price is up +2.6% from this morning's open, now at US$69,512. Volatility of the past 24 hours has been moderate at just on +/- 2.0%.

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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