A review of things you need to know before you sign off on Monday; More rate cuts, KiwiSaver assets rise, FHBs at capacity, big fine for big lie, swaps and NZD stable, and 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
TSB has cut fixed rates, basically to ASB levels. The Police Credit Union, and Heretaunga Building Society have also cut fixed mortgage rates. All rates are here. In case you missed it late on Friday, Bluestone Mortgages said it was quitting New Zealand, unable to find a workable niche that could meet its scale requirements. They follow Resimac.

TERM DEPOSIT/SAVINGS RATE CHANGES
BNZ has cut all of its TD rates for terms 6 months and longer. The Police Credit Union, and Heretaunga Building Society have also cut TD rates. All updated rates less than 1 year are here, for 1-5 years, they are here. This review might be helpful.

RISING AT A GOOD CLIP
KiwiSaver assets are up +15.1% in June 2024 from the same quarter a year ago. While that is a heady gain, it is nowhere near the +26% rise in the year ended June 2021. Of course some of this is an increase in contributions, $12.3 bln in fact. But there are other withdrawals (FHB and hardship, along with retirees cashing out) so it is not possible to calculate a system-wide return from the RBNZ and IRD data. We can only rely on the fund manager reports.

IN DECLINE
Life insurance assets are actually falling, especially their New Zealand assets.

FHBs AT CAPACITY
RBNZ data shows that FHB's are stall taking our news loans at about the $550,000 level, an amount that hasn't really changed since May 2021. But of course house prices have. The median house price is down -7.7% over that same period while the first-quartile house price is down -4.1% over the same period. Interest rates in May 2021 were 2.5% while they are now 6.1%.

NZX EQUITY MARKET UPDATE
Check out our new quick update of how the NZX is faring today, as at 3pm. We welcome comments on that update story. Updates to annual results were released today for both Chorus (CNU, #16) and Property for Industry (PFI, #27) and they are updated in our profiles.

ANOTHER INSURER POSTS HIGHER PROFIT
Health insurer nib New Zealand said operating profit was $21.2 mln in FY24, down from $33.4 mln in FY23. Insurance revenue was $402.1 mln in FY24, from $367.6 mln in FY23, up +9.4%, due to policyholder growth and premium increases.

WILLFUL BLINDNESS RESULTS IN BIG FINE
Hamilton-based dairy company, Milkio Foods, has been fined $420,000 for misleading customers about the origin of some of their ghee dairy products with claims like “100% Pure New Zealand” despite importing the core ingredient from India. The matter was first identified by MPI and prosecuted by the Commerce Commission. The company is majority owned by Rajesh Chatterjee.

POSITIVE FEEDBACK
Banks and insurers continue to rate the RBNZ positively, according to the 2024 Relationship Charter Survey. In this year’s survey, 92% of registered banks, 81% of licensed insurers, and 94% of licensed non-bank deposit takers, NBDTs, rated their relationship with the Reserve Bank ’good’ or ‘very good’.

BOLSTERING CAPITAL WITH PERPETUAL PREFERENCE SHARES
Westpac NZ is the latest big bank to signal it will fundraise to bolster its capital position. It signaled an offer of $100 mln (with the ability to accept unlimited oversubscriptions at it’s discretion) of perpetual preference shares which are expected to constitute Additional Tier 1 Capital for regulatory capital requirements. They follow BNZ who did something very similar recently.

COURT SAYS UBER DRIVERS ARE EMPLOYEES. REALLY?
The Court of Appeal has dismissed Uber’s appeal of the Employment Court’s 2022 verdict that ruled Uber's control over the work environment and terms of employment effectively made them employees. It is a ruling that might affect many workers hired as contractors. All eyes now turn to Brooke van Velden as Workplace Relations minister who has shown an interest in this case and its implications.

SWAP RATES ON HOLD
Wholesale swap rates are probably little-changed today. Our chart below will record the final positions. The 90 day bank bill rate is down -2 bps at 5.22%. The Australian 10 year bond yield is down -3 bps at 3.92%. The China 10 year bond rate is down -1 bp at 2.16%. The NZ Government 10 year bond rate is up +2 bps at 4.27% and the earlier RBNZ fix was at 4.18% and down -3 bps from Friday. The UST 10yr yield is down -2 bps from yesterday at 3.79%. Their 2yr is now at 3.90%, so that curve has now tightened up, inverted by just -11 bps.

EQUITIES MIXED
The NZX50 is up +0.4% in late Monday trade. The ASX200 is also up +0.4% in afternoon trade. Tokyo has opened down -1.1%. But Hong Kong is up +0.9% at its open. Shanghai is down -0.2%. Singapore is unchanged at its open. Wall Street looks like it will open tomorrow with a modest +0.3% on the S&P500 according to current futures trade.

OIL LITTLE-CHANGED
The oil price is unchanged from this morning at just over US$75/bbl in the US, and at just over US$78.50/bbl for the international Brent price.

CARBON PRICE FIRMISH
Today the carbon price rose by a marginal +75c today, now at $60.50/NZU today. But that takes it to its highest level since mid-March 2024. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD UNCHANGED
In early Asian trade, gold is holding from this morning at US$2512/oz.

NZD HOLDS
The Kiwi dollar is down -10 bps from this morning, now at 62.2 USc. Against the Aussie we are unchanged at 91.7 AUc. Against the euro we are still at 55.6 euro cents. This all means the TWI-5 is now at 69.8 and marginally lower.

BITCOIN HOLDS HIGHER
The bitcoin price is down -0.2% from this morning, now at US$64,020. Volatility of the past 24 hours has been low at just on +/- 0.9%.

This soil moisture chart is animated here.

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