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
BNZ cut its floating rate by -25 bps, the last of the main banks to do so. Its new reduced rate of 8.44% is the highest of these same main banks. The Co-operative Bank also cut its floating rate -25 bps. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
The Co-operative Bank cut is savings accounts as well, as did BNZ. All updated rates less than 1 year are here, for 1-5 years, they are here.
BOTTOMING OUT?
The retail impulse in July basically held little-changed, which was in contract to the notable falls in the prior five months. This is data that corroborates Governor Orr's view that we are the final 'dark before the dawn'.
JULY INFLATION RESULTS MIXED
A range of inflation components that StatsNZ tracks monthly were released today for July. They show food prices are rising again after a fall in the year to June. They also show rents increasing 4.3% which although his is the slowest rate of growth since November 2023. Petrol and travel costs are lower, with some falling quite a bit.
SCEPTICAL CONSUMERS
Households still doubt inflation will fall back under 3%. The latest quarterly Household Expectations Survey for the Reserve Bank finds households still see inflation above the RBNZ's 1% to 3% target in two years' time. And they are less optimistic about chances of being able to get another job.
NZGBs POPULAR AGAIN
The latest NZGB tender today for $500 mln on offer brought 96 bids worth $1.273 bln. 38 of those bids were accepted. The April 2027 bond is now yielding 3.71%, down -83 bps from 4.54% 19 weeks ago when it was last offered. The April 2034 bond went for a yield of 4.17%, -11 bps from one week ago. The May 2041 went for 4.50%, down -16 bps from one week ago.
PREMEDITATED LYING & MORTGAGE FRAUD
An Auckland judge has decided that Francis John Peters who was guilty of three charges of obtaining credit by deception and one charge of obtaining property by deception relating to a $1,350,000 loan obtained from Westpac for the purchase of a property in Auckland is sentenced to 9 months home detention. But it might make more sense to know Peters was a lawyer.
JAPAN SHINES, REALLY SHINES
In Japan, they released their Q2-2024 GDP result today and it expanded a very strong +3.1%, way more than the +2.1% expected, and far better than the -2.3% fall in Q1-2024.
MORE EMPLOYED, MORE UNEMPLOYED
In Australia, their July labour force rose with now 14.47 mln employed (+58,000). Their participation rate rise again (to 67.1%), and their jobless rate ticked up to 4.2%, or +23,900 to 637,000. Full-time adult average weekly total earnings were up +4.6% to AU$1994 (NZ$2200).
CHINA DOESN'T SHINE
In China, the data out today reinforced their tough economic conditions are extending. Retail sales were up just +2.7%, industrial production rose less than expected at +5.1% but electricity production (a better metric?) rose only +2.5%, and prices for new houses dropped -4.9% and the most since 2015. For secondhand houses, who knows? No cities reported year-on-year gains, the first time that has happened.
SWAP RATES LOWER
Wholesale swap rates are probably a lot lower following the RBNZ signals as the market considers them. Our chart below will record the final positions. The 90 day bank bill rate is down -10 bps at 5.27% reflecting the OCR change. The Australian 10 year bond yield is down -6 bps from this time yesterday at 3.92%. The China 10 year bond rate is up +4 bps at 2.20%. The NZ Government 10 year bond rate is down -4 bps at 4.21% and the earlier RBNZ fix was at 4.19% and down -3 bps from yesterday. The UST 10yr yield is unchanged from this time yesterday at 3.85%. Their 2yr is now at 3.97%, so that curve is now at -12 bps.
EQUITIES FIRM EVERYWHERE
The NZX50 is up +0.3% in late trade today. The ASX200 is up +0.2% in their Thursday afternoon trade. Tokyo is up a full +1.0%. Hong Kong is up +0.3% at its open. But Shanghai is up +1.0% in its opening trade. Singapore has risen +0.8% at its open. Wall Street ended its Wednesday session with the S&P500 up +0.4%.
OIL SLIPS AGAIN
The oil price is down -US$1 from this time yesterday, now just under US$76.50/bbl in the US, and at just over US$79.50/bbl for the international Brent price.
CARBON PRICE EASES SLIGHTLY IN LIGHT TRADE
Today the carbon price is down slightly -50 USc at $53/NZU today in light trade. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD SOFTISH
In early Asian trade, gold is down -US$8 from this time yesterday, now at US$2451/oz.
NZD EASES BACK SLIGHTLY
The Kiwi dollar has fallen marginally from this time yesterday, now at 60 USc. Against the Aussie we are down -10 bps at 90.7 AUc. Against the euro we are soft at 54.5 euro cents. This all means the TWI-5 is down -10 bps from yesterday at 67.6.
BITCOIN FALLS
The bitcoin price has fallen -4.1% from this time yesterday, now at US$58,404. Volatility of the past 24 hours has been high at just on +/- 3.1%.
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.
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