A review of things you need to know before you sign off on Friday; more home loan rate cuts, inflation still lurking, migration eases, tourism stalls, PMI rises, swaps stable, NZX50 firm, NZD soft, & 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 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%.

This soil moisture chart is animated here.

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