A review of things you need to know before you sign off on Wednesday; new fintech launches, lots about dairy, FHB demand sags, bank switching more popular, cameras reduce retail crime, swaps soft, NZD firm, & more

Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).

MORTGAGE/LOAN RATE CHANGES
No changes to report today. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here either. All updated rates less than 1 year are here, for 1-5 years, they are here.

ANOTHER FINTECH LAUNCHES
A new fintech Debut has launched a savings/transaction account with Universal Interest at 5.10%. It is listed on our Savings page. Their launch announcement is here.

A POSITIVE START TO THE DAY
Pulse auction results showed very little change to SMP prices, still in a tight range over the past four weeks (+/- 1.0%). But the WMP price rose +2.8% from the full GDT auction a week ago to its highest level in a year. This Pulse result was a nice warm-up for the later Fonterra announcements.

DOWN -$450 MLN
Fonterra reported earnings for the latest full financial year fell to $1.128 bln down -28% from $1.577 bln in the prior year. Page 111 declares the CEO's salary. More than 8,800 NZ based employees earned more than $100,000. See page 114. Director pay is on page 116.

MILK PAYOUT RISING
Fonterra has announced a +50c lift in its 2024/25 forecast Farmgate Milk Price midpoint to $9.00/kgMS. (The 2023/24 payout was fixed at $7.83 which was a fall from $8.22 in 2022/23.) At the same time it gave FY25 earnings guidance of 40-60 cents per share, compared to the FY24 55c/share. Our history of these rates is here.

INVESTOR DEMAND RISES FASTER THAN BY FHBs
The latest mortgage figures from the Reserve Bank show that investors took a bigger share of the mortgage pie than the first home buyers last month for the first time in about two-and-a-half years.

BANK SWITCHING MORE COMMON - AMONG HIGHER INDEBTED BORROWERS
There were almost 2500 home loan borrowers who switched banks in August, holding the elevated level over the past four months compared to what we have seen over the prior seven years. Borrowers who switch tend to have higher debt, about +15% higher than other borrowers who buy a home. Switchers account for about 15% of new lending activity, more than double the proportion like this five years ago. This is what the C33 data release today from the RBNZ shows. Borrowers who top-up their loans average about +$100,000 additional and there was little change to that pattern in August. Very little of top-up or switching activity goes on for borrowers with high LVR loans.

NZX EQUITY MARKET UPDATE
Check out our quick update of how the NZX is faring today, as at 3pm. Tourism Holdings & Serko show some rare life, Turners & Infratil slip.

RESILIENCE FROM FALLING GRID PYLONS
Gentailer Meridian says it has been granted resource consent to build a 120 MW solar farm in Northland. With up to 250,000 solar panels, the Ruakākā Solar Farm, south of Whangārei, will be capable of producing 150 to 200 GWh of electricity per year – enough to power more than half the homes in Northland. Meanwhile wholesale electricity prices are back and holding modest levels again. And hydro lake storage levels have recovered to normal.

CAMERAS REDUCE CRIME
Retailers are buoyed by a 'successful trial' of facial recognition in stores. Initial results from Foodstuffs’ North Island facial recognition trial are showing technology offers real opportunities in the fight against retail crime, Retail NZ says. The trial ended earlier this month with early results showing positive signs of reducing harm to the supermarkets’ staff. The trial was in place for six months across 25 New World and PAK’nSAVE stores in the North Island.

SUBSIDY SINKS CPI
August inflation as monitored monthly was expected to fall to +3.1% in Australia from 3.5% in July. But in fact it fell far more sharply, down to 2.7% in August from a year ago. The RBA will be relieved as this is the first indication they wanted to see of it within their 1-3% target range. But, a lot of this was due to falls in the cost of petrol and electricity. And that came from a one-off impact of the start of their Commonwealth Energy Bill Relief Fund rebates, and the State Government rebates in Queensland, Western Australia and Tasmania, which drove the largest annual fall in electricity prices on record, down almost -18%. These rebates will last through 2025. Staying high however are rents, still rising about +7% pa.

UNIMPRESSED?
After China's big signals of substantial monetary stimulus (and today's follow-through of a -30 bps cut to the MLF rate to 2.0%) you might have thought that commodity prices would have risen in anticipation of a meaningful market reaction. But they haven't - yet anyway. The copper price rose prior to the official announcements, but haven't kicked on today. Iron ore has stayed subdued. Other key metals have had conspicuously little reaction. This may all mean markets have been quite unimpressed with the scale of this stimulus effort. No-one is actually gearing up for 'the recovery'. Local investors still think they are however (see equity market update below). But Aussie investors are very sceptical.

SWAP RATES SOFT
Wholesale swap rates are probably lower again today. Our chart below will record the final positions. The 90 day bank bill rate is -2 bps lower at 4.92%. That is its lowest level in ten months. The Australian 10 year bond yield is down -5 bps at 3.94%. The China 10 year bond rate is up +3 bps at 2.07%. The NZ Government 10 year bond rate is down -1 bp at 4.25% and the earlier RBNZ fix was at 4.17% and down -5 bps from yesterday. The UST 10yr yield is still at 3.74%. Their 2yr is now at 3.52%, so that curve is much more positive, now by +22 bps.

EQUITIES DON'T FOLLOW CHINA
The NZX50 is up a minor +0.1% in its late Wednesday trade. The ASX200 is essentially unchanged in afternoon trade. However Tokyo is up +0.3%. Hong Kong is up another strong +1.9% at its open on the stimulus signals while Shanghai is up an even stronger +2.4%. Singapore is down -0.6% at its open. Wall Street rose with the S&P500 ending up +0.3% in Tuesday trade.

OIL LITTLE-CHANGED
The oil price is little-changed from this time yesterday at just under US$71.50/bbl in the US, and now just under US$75/bbl for the international Brent price.

CARBON PRICE HOLDS
The carbon price has changed little today, still at $61.20/NZU. Volumes traded are still light. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD AT NEW HEIGHT
In early Asian trade, gold is up +US$38 from this time yesterday at US$2666/oz and a new record high.

NZD RISES FURTHER
The Kiwi dollar has stayed up, now up +80 bps at 63.4 USc. Against the Aussie we have risen +40 bps to 92 AUc. And against the euro we up +20 bps at 56.6 euro cents. This all means the TWI-5 is up at 70.7 and up +60 bps from this time yesterday.

BITCOIN RISES
The bitcoin price is up +2.4% from this time yesterday, now at US$64,495. Volatility of the past 24 hours has remained modest at just on +/- 1.6%.

This soil moisture chart is animated here.

Keep abreast of upcoming events by following our Economic Calendar here ».