A review of things you need to know before you sign off on Wednesday; commodity prices hold, but retail struggles, new lending rises, global signals not great, swaps fall, NZD falls, & 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
None to report today, so far at least. All rates are here. The "short is good" strategy may have peaked in July.

TERM DEPOSIT/SAVINGS RATE CHANGES
Heartland Bank reduced its TD rate offers today. AMP followed suit. All updated rates less than 1 year are here, for 1-5 years, they are here.

AUCTION PRICE SLIP, BUT WESTPAC RAISES ITS PAYOUT FORECAST
At today's dairy auction prices fell -0.4% from the prior auction, principally because WMP fell -2.5%. Apart from that, prices held at their recent higher levels. Westpac have upgraded their farmgate milk price forecast to $8.70/kgMS, reflecting the generally positive developments over the last few months. But that is not as high as ANZ's $9 forecast last week

OVERALL COMMODITY PRICES HIGHER
The ANZ World Commodity Price Index increased +2.1% in August from July as prices for meat and dairy had a strong month. From August a year ago, these prices are up +14%, up +12.5% in NZD terms.

DEMAND CHALLENGES
Log prices are little-changed in August, just marginally softer. Local timber processors have been rocked by very low demand and very high electricity costs. China demand still hamstrung by property market woes. India demand is hurt by high freight rates and more competition. It is an achievement that current prices are holding.

MIXED FEELINGS
ASB's latest Housing Confidence Survey features an unusual mix of opinions with a big jump in the number of people expecting interest rates to keep falling, and a big drop in the number expecting house prices to rise. And people were relatively evenly split on whether or not it's a good time to buy a house.

BARELY HOLDING ON
Retail spending is still falling but there's hopes in the sector of better ahead. Worldline NZ data shows that retail spending slipped -0.5% in August when compared with the same month in 2023. RetailNZ said its now a case of hanging on till the end of year holiday trading.

NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. We welcome comments on that update story. We have added some key index fund performance tracking.

LESS OF A CRSIS
Recent rains have seen our hydro lakes replenished somewhat.

MORE LENDING
RBNZ data for July shows there was +$12.2 bln of new lending in July, up +19 from $10.2 bln in June-24. Compared to July-23, total new lending was up by +36%. The category with the largest monthly percentage change was business lending for commercial property development, which rose by +$64 mln to $127 mln in July, more than double the $63 mln in June.

SOME UNPLANNED TIME AVAILABLE?
There are many changes in the Wellington workforces at present. If you have some special insights into important public policy issues or debates with some unique analysis, please feel free to contact us if you would like to opine on them. This is not an invitation to breach any confidentiality restrictions. Rather an opportunity to share insights or perspectives on important issues. Contact us.

CANCELLED
The FMA has cancelled Integrity Advisers Insurance’s Financial Advice Provider licence for engaging in serious misconduct. Integrity is a Christchurch-based adviser providing financial advice to approximately 500 retail customers, many of whom are from the Filipino community. Integrity’s sole director and shareholder is Mr Yuriy Bazhak. The breaches relate to Integrity’s treatment of clients who wanted to cancel their respective insurance policy between September 2022 and June 2023. The FMA said “Contrary to its name, this firm lacked any integrity with its clients. Mr Bazhak not only risked causing serious harm to his clients but preyed on their vulnerability through the threat of involving Immigration New Zealand."

A HESITANT EXPANSION
The Caixin China services PMI eased a bit but is still expanding. Incoming new business and activity remained in growth, with export business rising at a faster rate in August. Meanwhile capacity pressures were still evident, but firms reduced staffing levels amid cost concerns.

UNINTENDED CONSEQUENCES
Think rent controls are a viable option for rental affordability issues? Most Dutch renters would not agree as rent controls force renters into some very difficult situations.

BARELY EXPANDING
Australia said its GDP was +1.5% higher in its June year after a smaller-than-expected +0.2% expansion in the June quarter. "Helping" keep it positive was record federal government spending on the public payroll and on the healthcare sector.

IT'S GETTING UGLY ON THE WORKSHOP FLOOR
Meanwhile an August survey of the Australian manufacturing sector was particularly grim. The Ai Group Industry Index dropped sharply by 11.3 points to -30.8 in August, further deepening the contraction that has persisted for two years.

SWAP RATES TURN DOWN
Wholesale swap rates are probably sinking like everything else in the global financial markets today. Our chart below will record the final positions. The 90 day bank bill rate is down -2 bps at 5.19%. The Australian 10 year bond yield is down -6 bps at 3.98%. The China 10 year bond rate is down -1 bp at 2.15%. The NZ Government 10 year bond rate is down -11 bps at 4.26% and the earlier RBNZ fix was at 4.24% and down -10 bps bps from yesterday. The UST 10yr yield is down -8 bps at 3.83%. Their 2yr is now at 3.89%, so that inversion is still a minor -4 bps.

EQUITIES SINK
The NZX50 is down -0.2% in its late Wednesday trade. That is minor compared to the ASX200 which is down -1.9% in afternoon trade. Tokyo has opened its Wednesday trade down a startling -3.3% at its open. Hong Kong is down -0.8% and Shanghai has opened down its own -0.2%. Singapore is down -1.5% at its open. Wall Street returned from holiday in a down mood, with the S&P500 falling -2.1% in Tuesday trade. Nvidia's plunge set the tone, down almost -10% on its own.

OIL EDGES UP
The oil price is up +US$1 from this time yesterday at just over US$73.50/bbl in the US, and at just over US$77/bbl for the international Brent price.

CARBON PRICE DIPS, NZU AUCTION FAILS
Today the carbon price is marginally softer today at $61/NZU. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint. No units were traded at today’s Government auction of NZUs. The auction floor price of $64/NZU set for today’s auction is still higher than the price units have recently traded in the secondary market.

GOLD HOLDS
In early Asian trade, gold is up a minor +US$1 from yesterday at US$2495/oz.

NZD EASES LOWER AGAIN
The Kiwi dollar is down -40 bps from this time yesterday, now at 61.8 USc. Against the Aussie we are back up +30 bps at 92.2 AUc. And against the euro we are down -20 bps at 55.9 euro cents. This all means the TWI-5 is now just under 69.9 and down -30 bps.

BITCOIN DROPS YET AGAIN
The bitcoin price is down -4.5% from this time yesterday, now at US$56,722. Volatility of the past 24 hours has been high at just on +/- 3.3%.

This soil moisture chart is animated here.

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