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
ASB is the last major to reduce fixed home loan rates. More here. But the bigger rate cut news is from SBS Bank who have launched a 3.99% rate for first home buyers. More here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
ASB also cut term deposit rates. We have an update of all the recent TD rates here. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
COST PRESSURE
Statistics New Zealand's Selected Price Indexes show food prices rose 0.7% in July from June as the annual increase hits +5.0% due to higher prices of grocery food, and that is a rise from +4.7% in June. That has markets expecting overall inflation is heading back to +3% (or higher) before the end of this year. It will have the RBNZ's attention.
DOWN TO ONLY +1000/MONTH
Fewer foreign migrants are arriving in this country and more NZers are leaving and that is pushing down migration-driven population growth.
BACK EXPANDING
The BNZ-BusinessNZ Performance of Manufacturing Index re-entered positive territory in July, after two months of contraction. The overall index is tracking the new orders component.
STALLED
Infometrics notes that June marks the second month in a row of falling tourism arrivals. Tourism arrivals in June were down -2.5% from May, which was -0.5% down from April (all on a seasonally adjusted basis). Although year-end growth in arrivals is still positive, at +5.0%, arrivals have stuck at 87% of pre-pandemic levels for the past three months, which is no better than the post-COVID level of activity first seen in February 2024.
NZX50 FIRMER AGAIN TODAY
As at 3pm, the overall NZX50 index is up +0.3% so far today. It is now up +0.3% over the past five days and down -1.5% year-to-date. But it is sitting +1.3% higher year-on-year. Market heavyweight F&P Healthcare is up +0.4% today so far. Vulcan Steel, a2 Milk, Investore Property, and SkyTV all rose 2%, balanced out however by falls by Vista Group, Freightways, Port of Tauranga, and Contact.
CHINA RETAIL SAGS
In China, retail sales rose +3.7% in July from a year ago, slowing from a +4.8% expansion in June. Markets were expecting a +4.6% gain in July, so this is a disappointment. This latest result is their weakest growth since December 2024.
CHINA INDUSTRIAL PRODUCTION SOFTENS
Meanwhile, China's industrial production expanded by +5.7% in July from a year ago, slowing from June’s three-month high of +6.8%. Expectations were for a 5.9% gain so this miss is small. But it is the softest increase in industrial production since last November. That comes after capacity curbs caused by unusually high temperatures and heavy rainfall in some regions.
ELECTRICITY PROCTION RISES
The more important metric of electricity production saw it rise +3.1% in July from a year ago, a faster expansion than in June. Hydro power was down -9.8% on the same basis, coal power up +4.3%, and nuclear power up +8.3%. The smaller renewals sector rise much faster than all of these.
SMALLEST RETREAT IN 16 MONTHS
China’s new home prices in the 70 major reference cities dropped by -2.8% in July from a year ago, easing from a -3.2% decline in the previous month. It was the 25th consecutive month of contraction, the softest pace since March 2024. Only five of those 70 cities had any increase, and those were all marginal at best. But then again, so were the dips. For resales, there were no cities showing any year-on-year gains and only one (Taiyuan, in Shanxi province) with a monthly gain.
SWAP RATES STABLE
Wholesale swap rates are will probably be little-changed today across all durations. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -1 bp at 3.14% on Thursday. The Australian 10 year bond yield is up +33 bps at 4.24%. The China 10 year bond rate is down -1 bp at 1.72%. The NZ Government 10 year bond rate is up +3 bps at 4.44% and up +4 bps at 4.42% in the earlier RBNZ fix today. The UST 10yr yield is also up +4 bps from yesterday at 4.27%.
EQUITIES MIXED
The local equity market is now up +0.4% in late Friday trade. The ASX200 is also up +0.4% in afternoon trade. Tokyo has opened up +0.9%. Hong Kong however is down -1.3% at its open but Shanghai is up +0.2%. Singapore has opened down -0.9%. Wall Street ended its Thursday session unchanged after being lower for most of its session.
OIL RISES
The oil price in the US is up +US$1 from yesterday at this time, now just under US$64/bbl and the international Brent price is now just under US$67/bbl.
CARBON PRICE HOLDS
There were few trades today and the price held at $57.00. 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 SOFTER
In early Asian trade, gold is down -US$26 from this time yesterday, still at US$3339/oz.
NZD IN NOTABLE PULLBACK
The Kiwi dollar is down -60 bps from this time yesterday at 59.2 USc. Against the Aussie we are down -10 bps at 91.1 AUc. Against the euro we are down -30 bps at just on 50.8 euro cents. This all means the TWI-5 is down more than -40 bps at 66.9.
BITCOIN EASES BACK
The bitcoin price is now at US$119,011 and down -3.7% from this time yesterday. Volatility has been moderate at just on +/-2.5%.
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26 Comments
Inflation is heading up.
The cost of a Toyota Corolla appears to be around $671m and it's still not in the garage
Strong economic management ensures we wait longer, get smaller ferries, and pay more.
The Adults are in the room
...ferries that don't require a few billion more of additional infrastructure & can fit through Tory channel entrance - so paying a lot less
Edit: BTW, how long do you think it would have taken to build the new terminals? The boats would have arrived with nowhere to park
We've already paid $671 million, that's before the cost of any new ferries, and any cost overruns on the new ferries. We'll be getting smaller and worse ferries for at least the same if not more.
Worse...we have paid around 240 million for nothing other than Nicola Willis' ego.
remember the $3-4B NZ Rail "surprise" that Grant Robertson refused to sign off on 6m b4 the election so as to give someone else the hospital pass
“Our solution will be markedly cheaper than the cancelled $3.1 billion programme and the $4 billion warning the previous Government received. That’s because of a minimum viable and maximum reuse approach for the port infrastructure,” Mr Peters says.
https://www.beehive.govt.nz/release/rail-ferries-and-straightforward-in…
Lol..oh dear, politics.
We have no idea what the proposed infrastructure would have ended up costing just as we have no idea how much the new infrastructure will cost.
We do however know what the quote for 2 ferries delivered in 2027 was.
Ideology...gotta love it or you'd go mad.
Some people fail to understand basic budgeting principles & sunk cost fallacies
Care to hazard a guess as to how much will be spent on Picton and Wellington port infrastructure over the next decade?
Not to mention the opportunity cost of an additional (at least) 2 years delay in delivery.
I'll just stick to my beer
Imagine tokenized gold as a means of exchange like using cash in a supermarket, etc and as savings instrument? Perth Mint played with the idea back in 2019 but it was discontinued in 2023, partly because of lack of demand.
And if companies are putting BTC on their balance sheets, why not tokenized gold?
A slew of companies have recently said they are pivoting to a crypto treasury strategy, raising capital by selling shares and issuing debt and investing in tokens like bitcoin and Ethereum.
BioSig is taking a different approach. The merged entity is positioning itself as a gold treasury company while betting on the red-hot tokenization trend. Tokenized assets, or traditional instruments like stocks, funds and commodities on blockchain rails, are projected to become a multitrillion dollar market over the next years, reports by BCG, McKinsey and Standard Chartered said.
The company plans to hold physical gold through a top-tier bullion bank and denominate much of its balance sheet in the yellow metal rather than fiat currency.
https://www.coindesk.com/business/2025/07/08/biosig-streamex-to-raise-1…
Any currency based on a hard asset is very problematic; the value fluctuates too much outside of goods and services.
for sure 1's and 0's on a magnetic raid disk are way better..... no one notices as you pull fairy dust out of your ass
even based on human excrement it would be somewhat limited, what we have now is the CBers have the power to decimate peoples savings
simply by creating more.
Any currency based on a hard asset is very problematic; the value fluctuates too much outside of goods and services.
It's not problematic at all. Prices of goods and services are typically listed in fiat currency.
Consumer prices generally increase in currency terms, as does the gold price.
But the purchasing power of gold increases over time, while fiat currency doesn't.
Over time, but in shorter durations it can dip massively.
Over time, but in shorter durations it can dip massively.
Average daily variation in XAUUSD since 2000 ranges 0.80%-1.30% per day. As a general rule, 52% of those days are positive.
XAUNZD has fallen >3.4% on only 4 trading days since 2000. On a single trading day in April 2013, XAUUSD fell approx 9%.
I'm talking about much longer time frames.
It's not the form of the money that's the problem.
Ultimately currency is dependent upon what is available for its trade....it matters not what it is measured with if there is insufficient for it to be traded for.
The value of currency as with most things is the faith people place in it. We could always start trading in Nicaraguan Cordoba, but nobody would have faith it is worth anything.
Here's a great "opportunity" for an Interest.co imputed rent enthusiast
"The Opportunities Party is looking for a new leader, and has taken to Seek to find them."
https://www.rnz.co.nz/news/political/570130/top-goes-public-in-hunt-for…
I see some merit in this approach, but it may not be popular with the current crowd.
Interesting article about recent attack on the claims by Ray Dalio that excess debt accumulation inevitably results in financial crises "is part of the ongoing debate between deficit hawks and doves in China over debt-fuelled fiscal spending."
The article cites Dalio as saying: "Over the long run, debts can’t rise faster than the incomes that are needed to service the debts, and interest rates can’t be too high for borrower-debtors or too low for lender-creditors for very long."
MMTers are right when they say that countries can service debt in their own currencies, and this is especially true in China, where Beijing controls the banks, sets all interest rates, and can restructure liabilities at will.
But they are wrong in claiming that because it can be serviced, a rise in the sovereign debt burden doesn't matter. It does, because if debt rises faster than the value of goods and services produced, the only way the government can service it is through hidden transfers.
Chinese economists recruit Ray Dalio and MMT in their battle over deficit spending
https://www.chinabankingnews.com/p/chinese-economists-recruit-ray-dalio…
US and maybe China is one thing, but garden variety countries like NZ, Zimbabwe, Lebanon and Latin America need to follow the laws of the market and excess printing leads nowhere good
What are these laws of the market?
https://en.wikipedia.org/wiki/Say%27s_law
Keynes had his own version...an economy with spare capacity is better served paying people to dig holes and fill them in again.
You will note that these observations do not differentiate between nation states.
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