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 RATE CHANGES
No changes to report today. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
SBS Bank trimmed some of its TD rates today for 6, 12 and 18 month terms. The Cooperative Bank trimmed its 6 month rate too.. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
XERO ANALYSIS SHOWS RECESSION IN EMBEDDING FOR MOST SMEs
Despite OCR cuts, small businesses are ‘yet to see the expected boost to consumer and business activity’, according to the latest Xero small business data. The downturn is lingering for most. However the agricultural sector is seeing sales grow.
STRONG HOUSING LENDING
On top of May's unusual +$2.2 bln in housing loan growth, June added another strong +$1.7 bln. Banks now have a loan book of $374.1 bln, up +4.9% from a year ago and the strongest growth in 32 months.
WEAK RURAL LENDING
Lending to the rural sector continued to retreat in June, now down on a year-on-year basis for six straight months. Enhanced rural cash flows reduced the need for new borrowing. Lending to dairy farmers fell -0.8% year-on0year, for sheep & beef farms, and horticulture, both were up +0.8% on that same basis.
BUSINESS LENDING STAGNANT
Lending to business shows only minor growth in June, about +1%. There is minor (+2% pa) lending growth going on for commercial property, but lending where property is not involved is stagnant.
KEEPING IT READY
Household bank account balances swelled almost +$900 mln in June from May, up +6.8% from a year earlier. Term deposit balances stood still however; all this growth was in transaction account balances (+$370 mln) and savings account balances (+$460 mln). As term deposit interest rates ease lower, and the perceptions of economic risk rise, household are choosing to keep their cash 'ready'.
DISCOUNTS TRIP UP SCTI TOO
The FMA is advising people to complain if they're not paying the correct premiums. This comes as Southern Cross Travel Insurance admits liability for breaches of fair dealing laws, pays $1.1 million to Crown after remediating all its customers.
NZX50 ENDS THE MONTH UNENTHUSIASTICALLY
As at 3pm, the overall NZX50 index is ending the month unchanged from yesterday, up +0.4% from a week ago, and down -1.6% since the start of the year. It is up +3.7% from a year ago. Gains from SkyTV, Precinct, SkyCity casino, and Tower. But these gains were were offset by drops from Mainfreight, Spark, Skellerup, and Serko
NZGB TENDERS EVER MORE POPULAR
Today's two tendered NZ Government bonds attracted $2 bln in bids. $450 blm was issued to the 42 successful bids (of 135 total bids). The May 2030 bond achieved a yield of 3.81%, just a few bps lower than the prior equivalent event two weeks ago. The May 2034 bond achieved a yield of 4.41%, +5 bps higher than the prior equivalent event thirteen weeks ago.
JAPAN HOLDS RATE TOO
As expected, the Bank of Japan held its policy rate unchanged to day at 0.5%. The decision was unanimous, reflecting the central bank’s cautious approach to policy normalisation.
JAPAN'S FACTORIES BUSIER THAN EXPECTED
Japanese industrial production surged in June, and in a quite unexpected way. Year-on-year it was up +4.0%, month-on-month up +1.7%. A small retreat was expected.
CHINA FACTORIES NOT SO BUSY
The official July PMIs for China were released today, showing their factory sector contracting at a faster rate and their service sector expansion all but evaporating. These results are not disastrous, but they will worry Beijing all the same. The vibrancy they recently re-found isn't lasting.
AUSSIE RETAIL SURGE UNEXPECTED
There were some very positive Australian retail trade data released today. And oddly, this is the final data released for retail sales as they shift to their "Monthly household spending indicator" series. The final data for retail trade brought a +4.9% year-on-year burts in value terms, +1.5% in volume terms. These levels were far better than any analyst was expecting. The contrast with New Zealand is rather stark.
FOR OUR AUSSIE READERS
We now have a separate service for our Australian readers; interest.com.au
SWAP RATES DIP
Wholesale swap rates are likely softer again today. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +1 bp at 3.20% on Wednesday. The Australian 10 year bond yield is unchanged at 4.28%. The China 10 year bond rate is also unchanged at just over 1.74%. The NZ Government 10 year bond rate is down -1 bp at 4.53% but up +1 bp at 4.53% in the earlier RBNZ fix today. The UST 10yr yield is up +3 bps at 4.36%
EQUITIES LOWER, EXCEPT TOKYO
The local equity market is now down -0.3% in late Thursday trade. And the ASX200 is down -0.2% in afternoon trade. Tokyo has opened up +0.9%. Hong Kong is down -1.2% at its open and Shanghai is down -0.7%. Singapore has also opened down -0.7%. Wall Street ended a choppy session down -0.1% on the S&P500 in Wednesday trade trying to assess the impact of both the Fed and the tariff confusion.
OIL MIXED
The oil price in the US is up another +US$1, now at just on US$70/bbl. But it is unchanged at just under US$72.50 for the international Brent price.
CARBON PRICE SOFT
The carbon price dipped to NZ$55.50/NZU on one tiny trade today. The next official carbon auction is on September 10, 2025. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD FIRMISH
In early Asian trade, gold is down -US$30 from yesterday at US$3297/oz.
NZD RETREATS
The Kiwi dollar is down a sharp -60 bps from this time yesterday, now at 59.1 USc following the reaction to the US Fed non-decision. Against the Aussie we are holding slightly firmer at 91.6 AUc. Against the euro we are up +20 bps at 51.8 euro cents. This all means the TWI-5 is down at 67.
BITCOIN LITTLE-CHANGED AGAIN
The bitcoin price is now at US$118,432 and up +0.4% from this time yesterday. Volatility has been modest, at just on +/-1.1%.
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11 Comments
Yet another sign that Japan's lost decades are over: SBI Shinsei has repaid public funds used to bail out its predecessor, the Long-Term Credit Bank, in the 90s.
LTCB was one of Japan’s three top long-term lenders, deeply involved in financing real estate and major industrial projects, both domestically and internationally. LTCB’s non-performing loans exceeded USD42 billion at the time. The Japanese govt nationalized LTCB in 1998 amid fears of a systemic financial meltdown.
All 34 banks bailed out following the collapse of the bubble have now repaid in full.
https://www.marketscreener.com/news/sbi-shinsei-bank-finishes-repaying-…
I'm pleased to announce that after seeing a decline of around a million dollars on my CV my rates will be reduced by just over $600 a year.
Did you achieve that by demolishing a building or did some of your land wash away in a recent flood?
In all that’s a 5.8 reducing to about 4.8
No changes, also multiple CVs. It just went down more than the average for the city. Whether or not this was possible is something we have been discussing so I thought I would give some feedback.
Of course it’s possible to go down more than average just as it’s possible to go down by less. This is why the average is the average…. I wouldn’t worry about it though, unless you want to pay more rates
Sorry I was a bit unclear. Some commenters thought my rates wouldn't go down.
Is it not that the calculation, pro rata of the total rates take that council sets, means your rates amount is as per its percentage of that amount? So that means the greater the value of the property the greater the cost of rates. That in itself is a levy, for want of a better word, amounting to a wealth tax. In other words it is described as a charge by the council for its goods and service but in reality a household of say, six using all of those facilities can end up paying less than a household of one or two. The convenience is though, by being a goods and service charge, central government can acquire 15% GST on top of it all. About time local & central government ceased the charade, called rates for what they are, a straight out wealth tax, and the like of the Greens and TPM acknowledged that NZ already has a wealth tax up and running.
THE MOACF'S
I had a look at some numbers today to try to gauge where the longer-term market for US debt was heading, as we see that the US fiscal deficit has gone onto steroids, and what on planet Earth would inspire any confidence in the US leadership and economy, based on a past and an present, but never ending trail of intriguing/shocking headlines - the most recent to capture my attention...
(i) The wipeout of $88 billion off Market Cap from the Trump family's meme coin Ponzi.
(ii) Morgan Stanley and other US companies issuing yuan-denominated bonds in the domestic Chinese bond market.
This got me thinking about the market's pricing of risk when you look at how sound the big US banks are in terms of debt-to-equity ratios, and then also their huge derivative positions that also pose a systemic domino effect if any one of them tipped over.
This is particularly concerning given the extent of Goldman Sachs’ global derivatives and dark pool activities in credit default swaps, interest rate swaps, etc, that are conducted world wide and often through affiliates.
Investigations have shown up all manner of lack of transparency, regulatory failures, and practices that disadvantage retail investors, such as latency arbitrage and order rerouting. There is a strong argument that only 5-10% of retail investors’ orders create actual market demand due to this rampant dark pool routing.
In January 2025, Bloomberg reported that dark pools accounted for 51.8% of U.S. stock trading volume, underscoring their dominance, and in general the deriving of prices from public exchanges without independent price discovery.
IMO, there is a huge risk involved from just one of these banks going under because of the interconnectivity of these TBTF entities, and with many commentators expecting a stock market meltdown of 50-80%, plus Trump 'policy' contribting to what could become a perfect storm, the entire scenario looks decidedly dicey.
Yesterday the estimate of countries, either already at war or being deliberately destabilised by the US with the help of the UK and Israel, grew to a mind-numbing 40, constituting an extraordinary degree of geopolitical risks. I have thrown away 90% of my tracking charts - there are none for the context and number of these concurrent events.
BACK TO THE MEMECOINS
Yes, well – Melania’s and Captain Chao$’s meme coins - could there possibly be a more obscene scam on planet earth, when it comes to the occupier of the Oval Office monetising his position?
July 31 2025, sees more than $88 billion of carnage in the market cap of these Trump Ponzis.
$MELANIA:
Peak Market Cap: $13 billion.
Current Market Cap: $2.15 million.
Decline: $12.785 billion (98.35%).
$TRUMP:
Peak Market Cap: $75.35 billion (fully diluted).
Current Market Cap: $9.43 billion.
Decline: $65.92 billion (87.49%).
Is there a strong case to be made that punters, both domestic and abroad, and including the buyers of federal debt tokens, should have a similar degree of confidence in the Trump Admin’s eCONomic ‘policy’, as they do in these tokens?
Imagine the potential mid-term carnage when the wealth gap widens even more.
The top 10% of the U$ population own ~66% of total wealth.
The next 40% (50th to 90th percentile) own ~31.5%
And the bottom 50% own ~2.5% of total wealth.
Even if things don’t get any worse (fat chance), there is $9.2 trillion of Federal debt to be rolled over for the year ending 2025. By the end of 2028 (Trump's term), the US faces a cumulative total of around $28 trillion in debt refinancing needs.
Trump and his idiotic (Soros-man) Bessent’s, debt refinancing ‘policy’ attempts to diverge from Biden’s serially idiotic (Yellen’s really) short-end strategy.
The plan was to prioritise longer-term securities to try to mitigate refinancing risks driven by a fiscal strategy focused on deficit reduction and economic growth.
PROBLEM – the deficit is blowing out, and real growth will be negative as Trump’s tax cuts and tariffs introduce market uncertainty, and seriously undermine yield reduction goals.
With a combination of shocking real yield (when properly inflation adjusted), serious carnage in capital invested, and currency volatility, risk will have to be priced in, otherwise no one will front up for the auction.
Yellen’s short-term debt focus left the U.S. vulnerable to higher interest costs, and the Trump/Bessent/Lutnick and Miran’s crazy Mar-a-Lago plan will tank the economy even faster than the previous admin.
ANOTHER BOMBSHELL – MORGAN STANLEY RMB DENOMINATED PANDA BONDS
A Panda Bond is a yuan-denominated (RMB) bond issued in mainland China’s domestic bond market by a non-Chinese entity, such as a foreign company, financial institution, or government.
Denominated in Chinese yuan, this allows issuers to raise funds in China’s onshore market.
By definition, the issuers are non-Chinese entities, including multinational corporations such as Morgan Stanley, Apple, and international organisations like the World Bank, and even foreign governments.
Recently issued Morgan Stanley bonds, as I understand it, are 5-year notes issued at 1.98%.
This makes a lot of sense for private US companies, as they can borrow at these cheap rates in China, as opposed to issuing US dollar-denominated bonds and have to pay as high as 7.50-9.5% driven by risk premiums and potential spread widening.
Of course, the talking heads spin this as making sense because MS is a ‘high-quality’ company, which reflects why they can pay these yields and yet still attract buyers.
Morgan Stanley’s debt-to-equity ratio in comparison to the largest four US banks in terms of total assets…
1 Goldman Sachs ~13.17
2 JPMC ~11.76
3 Citigroup ~10.5
4 Bank of America ~9.67
5 Wells Fargo ~9.16
6 Morgan Stanley ~3.11
Below – the first number reflects the estimated (Y/E 2024) derivative book in trillions held by these banks in notional value, and the 2nd figure is their derivative book as a ratio of the company’s equity…
1 Goldman Sachs 41.7 – 347:1
2 Citigroup 39.8 – 185.1:1
3 J P Morgan Chase 57.0 – 159.7:1
4 Morgan Stanley 38.3 – 127.7:1
5 Wells Fargo 8.39 – 43.7:1
6 Bank of America – 36.3 – 9.67
Total Derivatives held by these 5 banks – $221.4 trillion
Morgan Stanley must be viewed as a comparatively safe bet if they can entice buyers into the Chinese domestic bond market at 1.98% – but Col has to ask that uncomfortable question – compared to what?
OK, it has a comparatively low debt-to-equity ratio at 3.11 compared to the other big banks, which are all at least 300% higher, but their derivative book is high at $38.3 trillion and the 4th highest of the 6 banks at 127.7 times equity.
And my point – yes, it took a while - how much longer will the RoW and BRICS continue to finance this idiocy, and their own victimhood, because the U$ 100% can no longer afford to finance their perpetual wars or financial hegemony.
It’s the MOACFs (Mother Of All Cluster F…s)
Col
The Trump family "made billions" on paper from holding vast token reserves as well as extracting tens of millions in trading fees. For instance, trading fees alone made up at least $58 million for the Trump organization in a single day, and estimates of aggregate profits from transaction fees and primary sales approach $100 million for the Trump memecoin and further substantial sums from the Melania coin.
Then, the anonymous early traders (“snipers”): Just before the public launch of Melania coin, approximately two dozen wallets bought large quantities of the token minutes before Melania Trump’s announcement, netting a collective profit of nearly $100 million. These traders acted on privileged timing, quickly selling up to 81% of their holdings within 12 hours. Notably, a single wallet reportedly made $39 million in less than a day, with further millions following over subsequent days. Blockchain analysts traced at least some of these pre-launch wallets to crypto entrepreneurs with histories in questionable launches.
Investigations show that executives and insiders behind Melania’s coin offloaded over 8% of the total supply for upwards of $35 million, flooding the market and contributing to a rapid price drop. Blockchain analysis revealed coordinated sales, with over 82 million tokens sold from 44 wallets, and multiple millions drained from so-called “community funds” for personal gain.
The vast majority of public buyers and late entrants suffered losses. Up to 764,000 crypto wallets lost money on the Trump coin, with similar patterns found for the Melania coin. Most profits came at the direct expense of these retail participants, given the highly centralized ownership and insiders’ ability to time buys and sells.
Great points, Phoenix - I understated the extent of grift, in the interests of trying not to make my comment into a marathon.
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