A review of things you need to know before you sign off on Wednesday; financial markets react to what they think is a dovish RBNZ OCR move, dairy prices hold, insurers reprice climate risks, Fletcher in sell-off mode, swaps drop, NZD dives, & 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
There are only rate cuts by smaller institutions announced so far today, and only one by a bank, the Cooperative Bank. Given the cut was well signaled, this is something of a surprise. Update: The ANZ has passed through -20 bps to its floating rate. You can track them here as they come in. WBS and Unity Money cut fixed rates. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
There were term deposit rate cuts announced by Unity Money and General Finance, and savings account rate cuts by the Coop Bank. But no changes so far from the majors. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

EXPECTED CUT AFTER SPLIT VOTE
Today's big news is that the RBNZ cut its OCR by -25 bps to 3.00% and while that may have been expected, it came with a split vote. One of the two dissenters favoured no cut, the other a -50 bps. They week the potential for two more OCR cuts by early next year. Overall this is a slightly more dovish policy update that markets had priced in.

FINANCIAL MARKET REACTIONS
Immediately after the decision, the equity market built on its earlier momentum, the benchmark bond yields for NZGBs fell sharply on the dovish tone of the MPS, and the NZD fell a full -70 bps to 58.3 USc on the same interpretation.

DAIRY PRICE DIP LESS THAN FEARED
Today's full dairy auction revealed better demand from a wider range of markets than was expected so the declines anticipated were much less, in fact just -0.3% overall. Good buying of WMP and not only from China saw this rise slightly and that limited any overall downside. But there were lower prices for cheese, butter and SMP - lower, but about what was expected for these categories.

STRONG MILK FLOWS
Update: The release of July data on milk collections reveals that it is a third straight month of record volumes, even if it is in the offseason. July is +2.2% higher than year-ago levels.

CLIMATE RISKS BRING PREMIUM PRICING
General insurer Tower has extended its risk-based pricing to include landslide risks and sea surge risks, meaning rising premiums for some customers. Unfortunately for land owners in those zones, there are no climate-change denier insurance companies out there ready to rush in, to take these risks.

NZX50 JUMPS
As at 3pm, the overall NZX50 index is up +1.3% so far today, gaining momentum after the OCR cut. It is now up +2.6% over the past five days and up +0.2% year-to-date. It is still sitting +4.3% higher year-on-year. Market heavyweight F&P Healthcare is up an impressive +3.2% so far today. Kathmandu, Contact Energy, Vulcan Steel, and Heartland all lift the NZX50 while Tourism Holdings, Oceania, Gentrack, and Stride Property decline.

LOSSES TO BRING SELLOFFS
Fletcher Building lost over $400 mln in trading last year according to its annual accounts. It has taken a $700+ mln hit on writedowns. and given the clearest indication yet that it is going to sell its residential and development unit, in addition to the troubled construction business.

PROFILE UPDATES
We have updated both the Fletcher and Spark profiles in our NZX50 coverage.

SCAM WARNING
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JAPANESE MACHINERY ORDERS RISE
Japanese machinery orders are rising, more so for large items than the core industrial output.

TARIFFS CRIMP JAPANESE EXPORTS & IMPORTS
But Japanese exports are not rising, according to the July trade data released today. Nor are their imports. American tariff actions are getting the blame.

CHINA HOLDS RATES AT RECORD LOWS
China held its two Loan Prime Rates unchanged at 3.0% and 3.5% for a third consecutive time, remaining at record low levels.

SWAP RATES DROP SHARPLY
Wholesale swap rates are will probably be down very sharply today by at least -15 bps across the maturity bands. 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 3.13% on Tuesday. The Australian 10 year bond yield is down -4 bps at 4.29%. The China 10 year bond rate is unchanged at 1.77%. The NZ Government 10 year bond rate is down a massive -20 bps at 4.43% and up +3 bps at 4.50% in the earlier RBNZ fix today before the OCR cut. The UST 10yr yield is down -3 bps from yesterday, now at 4.31%.

EQUITIES LOWER, EXCEPT LOCALLY
The local equity market is now up +1.5% in late Wednesday trade, the best of the markets we follow. The ASX200 is however up only +0.4% in afternoon trade. Tokyo has opened down -1.5%. Hong Kong is also down -0.3% at its open but Shanghai is up +0.1%. Singapore has opened up +0.3%. Wall Street ended its Tuesday session with the S&P500 down -0.6%.

OIL SOFT
The oil price in the US is -US$1 today, now just under US$62/bbl and the international Brent price is now just under US$66/bbl.

CARBON PRICE STAYS SOFT
There have been few trades today with the price holding down at $56. 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$21 from this time yesterday at US$3315/oz.

NZD DIVES
The Kiwi dollar is down more than -1c from yesterday at this time, now at 58.2 USc. Against the Aussie we are down -80 bps at 90.5 AUc. Against the euro we are also down -80 bps at just on 50.1 euro cents. This all means the TWI-5 is down -80 bps at 66.6.

BITCOIN RETREATS
The bitcoin price is now at US$113,429 and down more than -2.0% from this time yesterday. Volatility has been modest at just on +/-1.3%.

This soil moisture chart is animated here.

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