A review of things you need to know before you sign off on Thursday; more rate cuts, more housing market sceptics, Fonterra boosts payout, two banks report profit stutters, swaps stay down, NZD stays down, & 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
Heartland cut its reverse mortgage rates by -65 bps. BNZ cut its floating rate by only -15 bps. SBS Bank cut theirs by -20 bps, ICBC cut their fixed rates. CFML cut floating rates. We should also probably note that ASB has been conspicuous in its silence. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
We are tracking the savings account rate cut announcements here, with changes ranging from no-change to -30 bps. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

HOUSE PRICES WILL FALL - MORE RATE SUPPORT TO COME
The RBNZ is forecasting that house prices will fall this calendar year. They admit surprise that the house prices have not been increasing - but points out that only about half of the impact of the interest rate cuts made so far have fed through into the economy.

BOOSTERISM CULMINATES
And analysts at CoreLogic/Cotality aren't positive about house prices either. They have shifted from being a real estate booster, to being a sceptic. They now say the rest of 2025 may be just as subdued for the housing market as the first 7-8 months of the year, despite Wednesday's OCR rate cut.

LOOKING AHEAD
The BNZ chief economist doubts home owners will 'rush' to longer fixed term mortgages. Mike Jones says mortgage fixing behaviour now appears less sensitive to current relative pricing, and more focused on the risks and opportunities from the shape of the next interest rate cycle.

RECORD HIGH
Fonterra makes late +15c boost to a record milk price for farmers. They are now indicating farmer shareholders will get $10.15 per kilogram of milk solids for the season that finished in May. For the current season it is $10/kgMS. Full perspective is here.

KICKBACK CHARGES
Open Country Dairy referred allegations of bribery involving one of its managers to the SFO. The SFO has now charged the former group market manager for allegedly receiving more than $250,000 in financial kickbacks. A court will now decide allegations that Simon Stewart provided information, including sensitive price information, and assistance to OCD Indonesian based customer, PT. Anta Tirta Kirana (Anta Tirta), and in return he received undisclosed payments.

WANDERLUST CULMINATES?
There was very little of note in today's release of credit card activity or balances through to July. But one thing did stand out; activity on domestic cards used overseas was -5.7% lower than the record high in July 2024. In fact, this was the largest year-on-year retreat since the pandemic-affected period in 2020/21, and prior to that in 2010. So perhaps we have done our dash with the wanderlust, crimped by the slow economy locally.

LOWER PROFITS, BUT BETTER TIMES AHEAD (?)
Heartland posted a $39 mln net result in June-year profit, half the prior year, but are targeting a doubling of underlying profit to $85 million for the upcoming 2026 year.

GOOD GROWTH BUT LOWER PROFITS
Kiwibank has posted a -5% lower $191 mln profit as slimmer margins undercut their strong loan growth.

A LESSER JULY NEGATIVE
July usually starts a five month period when our trade balance goes seriously negative. This year we booked a -$578 mln deficit in the month, about half the level in July 2024 and July 2023. Exports were +10% higher than a year ago. Imports were +3% higher.

STABILISING AT THE BOTTOM
For the past nine months, the level of tractor sales has plateaued at about 2000 per year. But in July, for the futs time in a while, there was a [minor] uptick with sales above year-ago levels for the month. Perhaps we have touched bottom?

FAST TRACK APPROVAL
Big projects by the Port of Auckland are the first to be granted approval in the new "fast track" process. Thirteen more are under consideration.

STILL STRONG DEMAND
There were three NZGB bonds tendered today, attracting 131 bits worth a bit more than $1.6 bln for the $450 mln available. All three maturities attracted yields that were slightly lower than the equivalent tenders two weeks ago.

DIRECTORS DUTIES & LIABILITIES
The Law Commission has launched a review of the legal duties and liabilities of company directors. If will be led by Geof Shirtcliffe.

NZX50 RISES EXTEND
As at 3pm, the overall NZX50 index is up another +1.2% so far today, extending the momentum after the OCR cut. It is now up +3.0% over the past five days and up +1.2% year-to-date. It is now sitting +5.8% higher year-on-year. Market heavyweight F&P Healthcare is up another impressive +2.1% so far today, up +3.5% for the last five trading days. Skellerup surges on FY25 results; Heartland, a2 Milk, and Mainfreight also rise. Auckland Airport, Fletcher Building, Stride Property, and Meridian Energy all decline.

NOT HIGH FLYING
Matching the average recovery in the tourism industry, Nikko analysts see Auckland Airport underperforming. They noted the "fairly cautious outlook that references seat capacity constraints, higher depreciation due to significant upgrade works and New Zealand’s soft economy means that underlying NPAT guidance is below market expectations." (H/T OB)

COMPENSATION QUESTIONED
Xero is a sharemarket darling. But is its CEO, Sukhinder Singh Cassidy, who got the role in late 2022, worth NZ$30 mln in pay? When she took over, the Xero share price was AU$69. Today it is AU$170/share.

GROWING FASTER I
The S&P Global/Markit August PMIs are quite upbeat. They said Australia's business activity growth accelerated midway through the third quarter, with faster expansions across both the manufacturing and service sectors. This was supported by higher new work inflows, including a renewed expansion in exports. In turn, Australian private sector firms raised their staffing levels at a faster rate to cope with additional workloads. Business sentiment also improved slightly from July.

MEANWHILE AUSSIE INFLATION EXPECTATIONS ARE EASING
Australian consumer inflation expectations fell to 3.9% in August from 4.7% in July, easing for the second straight month and marking the lowest level since March.

GROWING FASTER II
Meanwhile, Japanese business is also on the rise. Business activity across Japan's private sector expanded at the fastest rate since February midway through the third quarter, according to the August PMI survey data. The upturn was supported by a fresh increase in factory production alongside a further solid rise in activity at service providers. Total new business also expanded at the quickest rate in six months, though this was driven solely by the service sector. New export business fell at a steeper rate, however.

SWAP RATES SOFT AGAIN
Wholesale swap rates are will probably be down again today, maybe by another -5 bps at the short end. 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 3.14% on Wednesday. The Australian 10 year bond yield is down -2 bps at 4.27%. The China 10 year bond rate is up +3 bps at 1.80%. The NZ Government 10 year bond rate is down -4 bps at 4.39% and down -16 bps at 4.35% in the earlier RBNZ fix today after the OCR cut. The UST 10yr yield is down -2 bps from yesterday, now at 4.29%.

EQUITIES RISE LOCALLY
The local equity market is now up +1.2% in late Thursday trade, the best of the markets we follow. The ASX200 is however up +1.0% in afternoon trade. Tokyo has opened down -0.6%. Hong Kong is unchanged at its open but Shanghai is up +0.5%. Singapore has opened up +0.2%. Wall Street ended its Wednesday session with the S&P500 down -0.2%.

OIL FIRM
The oil price in the US is up +US$1 today, now just on US$63/bbl and the international Brent price is now just on US$67/bbl.

CARBON PRICE HARD TO KNOW WITH SO FEW TRADES
There have been few trades again today, in another dry patch, 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 FIRMER
In early Asian trade, gold is up +US$28 from this time yesterday at US$3344/oz.

NZD STABILISES
The Kiwi dollar is unchanged from yesterday at this time, still down at 58.2 USc. Against the Aussie we are up +20 bps at 90.7 AUc. Against the euro we are also down -10 bps at just on 50 euro cents. This all means the TWI-5 is holding at at 66.6.

BITCOIN HOLDS
The bitcoin price is now at US$113,992 and up +0.5% from this time yesterday. Volatility has been low at just under +/-1%.

This soil moisture chart is animated here.

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