Here are the key things you need to know before you leave work today for the long weekend (or if you work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
Westpac was the first to move its floating rates after the RBNZ OCR hike. They have been followed by Kiwibank and BNZ. More here. That story will be updated as other banks announce their rate changes. All current mortgage rates are here. And note, you can compare mortgage offers with our unique calculator that takes into account other costs and cashback incentives, here.
TERM DEPOSIT/SAVINGS RATE CHANGES
Westpac raised its bonus saver rate by +25 bps, its Simple Saver rate by +15 bps, and kept its Notice Saver rate unchanged. Kiwibank raised all its floating savings rates by +25 bps. Sharesies has also raised its rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
GOING TO TRACK UP
The Reserve Bank’s first Official Cash Rate hike in three years divides bank economists, but all agree more increases are coming before the year is out. Some interest rate strategists say this prospect means it is a good time to fix loans that are on floating rates currently, advice being proposed to commercial borrowers.
FACTORIES NOW EXPANDING FASTER
According to the latest BNZ-BusinessNZ Performance of Manufacturing Index, the manufacturing sector expanded significantly in June. New orders climbed the most since between April and June and the critical production measure is also rising strongly. The region with the strongest results is Otago, followed closely by Canterbury then Auckland. Wellington is the weakest by an unfortunate margin, in fact still contracting.
TRAFFIC ACTIVITY STLL CONSTRAINED
For all the other metrics that show an improving level of economic activity, ANZ's truckometer doesn't show that yet. The Light Traffic Index fell -0.5% in June from May and is down -0.4% from June a year ago and reflecting the impact of higher fuel prices. More positively, the Heavy Traffic Index\ rose +1.8% in the month, but is only up 1.3% from a year ago.
NEW SEASON DIPS
The first wool sale of the new season opened with a clear price adjustment down compared with the final sale of last season two weeks earlier, reports PGG Wrightson. Buyers were notably selective, with purchasing reflecting a tighter trading environment for crossbred types, particularly second-shear and lambs’ wool. After the strong price gains seen in recent months, some buyer resistance was to be expected, they said. However, when viewed in context, current price levels remain broadly in line with where the market was around five weeks ago. Mid-micron wool was the standout, with a quality offering attracting solid support from the trade.
BIG COUNCIL, BIG SPENDING CAPACITY
Auckland Council has now adopted its 2026/27 Annual Plan which has a $11 bln budget (up +0.5% from a year ago - yes, just +0.5%) requiring an average of +$320/year rates increase/property. $3.6 bln of that (40%) is directed to its capital budget (down -15% from the prior year) with $7.4 bln in its operating budget (up +10.5%). (see page 36 here.).
NZX50 FIRMS
As at 3pm, the overall NZX50 index is up +0.3% so far today to end our shortened week, with a weekly rise back up to +0.9%. It is now unchanged from six months ago. From a year ago it is up +7.3%. Market heavyweight F&P Healthcare is unchanged so far today. There are losses from Serko, NZX, Kathmandu and Ryman, but Fletcher, Freightways, Argosy and Precinct lead the gainers.
SKI SEASON ARRIVING
Ski fields are opening, but still have variable conditions.
GOVERNMENT SHIFTS AWAY FROM OUTRIGHT BAN ON CRYPTO ATMS
The Government has walked back on a blanket legislative ban on crypto ATMS. In June 2025, Associate Justice Minister Nicole McKee said the Government wanted to ban crypto ATMs in order to make it more difficult for criminals to convert cash into cryptocurrencies, which are considered high-risk assets by the Government. But McKee announced on Thursday that the Government wants to take a “targeted and proportionate approach” instead of an outright ban. She says crypto ATMs presented “real risks” but policy analysis had found that they could also have “legitimate uses”. Instead of an outright ban, McKee says the Government will establish “regulation-making powers” that will allow the Government to restrict cash transactions for virtual assets, although a specific timeline for this was not disclosed.
MINTER ELLISON SAYS NEW AML/CFT LEVY STRUCTURE EXEMPTS ‘SIGNIFICANT NUMBER’ OF ENTITIES
Following Cabinet’s approval of the final structure of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) levy, MinterEllisonRuddWatts says the Government’s decision to limit the levy to medium-high and high-risk sectors will mean a “significant number” of reporting entities won’t contribute to the cost of the AML/CFT system. “The decision to apportion the greatest share of the levy burden to banks and deposit takers (85%) reflects the Government’s assessment as the highest-risk sector and their relative capacity to absorb costs,” the law firm wrote on Thursday. Of the other 15% of the levy, casinos, TAB and Entain are contributing 9%, while Non-Bank Financial Institutions (NBFIs) and Designated Non-Financial Businesses and Professions (DNFBPs) are contributing the final 6%. The industry levy is intended to support the Government’s AML/CFT National Strategy 2026-2030. “Those within scope may question whether their sector classification is appropriate, given the financial consequences of that categorisation,” MinterEllisonRuddWatts says.
STEP-CHANGE IN RENT HIKES
In Australia, rents are rising faster, especially house rents. The increase was both stronger than seasonal norms and relatively abrupt in some cities, pointing to a step-change in pricing behaviour rather than a gradual tightening in market conditions.
LOW & MANAGEABLE
China's consumer price inflation annual rate eased to +1.0% in June from +1.2% in both April and May, slightly below market expectations of +1.1%, and the softest increase in three months. Beef prices rose +4.2% in the year, lamb prices by +6.0%. Dairy products fell -1.7% over the same period.
HIGH & TOPPING OUT
China’s producer prices rose +4.1% in June from a year ago, faster than the +3.9% rise in the previous month and matching market forecasts. It was the fourth consecutive monthly increase and the steepest pace since July. Industrial Producer Purchase Prices rose +6.4% led by higher copper prices (+21.6%). But we should also note that the June change from May was a slight -0.2% dip, suggesting the impetus may have passed now.
SWAP RATES RISE
Wholesale swap rates will likely be up sharply today, especially at the short end (+8 to +10 bps?). 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 2.74% on Wednesday. Today, the Australian 10 year bond yield is up +1 bp at 4.90% from yesterday at this time. The China 10 year bond rate down -1 bp at 1.73%. The Japanese 10 year bond is down -1 bp at 2.87% today but still near its high since 1996. The NZ Government 10 year bond rate is now at 4.59%, up another +4 bps. (The RBNZ data is now 'prior day' with the Wednesday rate up +8 bps at 4.51%.) The UST 10yr yield is unchanged at 4.58%, still their highest since mid-May.
EQUITIES MIXED & VARIABLE
The local equity market is firmer from yesterday, now up +0.2% so far. However, the ASX200 is down -0.7% so far. Tokyo has opened up +2.0%. Hong Kong has dipped -0.2% and Shanghai is down -0.3% at its open today. Singapore is up +0.6% at its open. Wall Street ended its Wednesday session with the S&P500 -0.3% lower. The Nasdaq had a +0.2% gain.
BUY THE MYSTERY, SELL THE HISTORY
It might be worth noting that it has been four weeks since the over-hyped SpaceX IPO which launched at US$160/shar in June 12. It peaked at US$202 and has fallen since, now at US$148/share and a -8% fall from its listing, a -26% drop from the hyped highs. It's really just a meme stock. Meanwhile Nvidia is down -2.2% over the past month, down -13.5% from its May 14 peak. And while we are at it, here are the one month price changes for a selection of big US tech stocks: Apple +3.9%, Amazon -0.7%, Google -0.7%, Meta +3.0%, Micron no-change, Microsoft -6.9%, and Oracle -34%. Investors seem generally wary of these valuations. How does your KiwiSaver/fund manager think about their holdings if they have you exposed to any of these?
OIL PRICES RISE +4%
American oil prices are up another +US$2 from yesterday with the WTI benchmark now just under US$74.50/bbl, while the international Brent price is just on US$79/bbl and up +US$3. This is after more attacks on tankers in a widening escalation.
CARBON PRICE LITTLE CHANGED
There have been many trades today but the price has firmed only marginally to $54/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD DOWN
In early Asian trade, gold is down -US$59/oz from this time yesterday, now at US$4066/oz. Silver is down -US$2.50 at just on US$58/oz.
NZD FIRMER
The Kiwi dollar has risen +20 bps against the USD from yesterday, now just on 57.2 USc. Against the Aussie we are up +40 bps at 82.5 AUc. Against the euro we are up +10 bps at 50.1 euro cents. This all means the TWI-5 is now just over 61.1 and up +20 bps from yesterday at this time.
BITCOIN DOWN AGAIN
The bitcoin price is now at US$61,748 and down -2.0% from this time yesterday. Volatility has been modest at just over +/- 1.2%.
MATARIKI
Friday, July 10 is a public holiday in New Zealand, Matariki. We will not be publishing our Breakfast Briefing or a 4pm Review. But we will be publishing other articles and updating our data resources. Our Weekend Briefing and weekly auction report will be available as normal on Saturday.
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15 Comments
Associate Justice Minister Nicole McKee said the Government wanted to ban crypto ATMs in order to make it more difficult for criminals to convert cash into cryptocurrencies
Crypto ATMs are pretty much useless for non-money launderers - the economics are poor. For money launderers, too risky as far as I can see. Likely have daily limits on withdraw. Interestingly, crypto ATMs are effectively absent and tightly constrained in Dubai. The laundering risk there is more about OTC/P2P channels and VASP misuse. For large-scale money launderers from Aotearoa and Aussie, Dubai can probably do something for you.
Interesting read from Noah Smith about how the idea that China has been able to see its residential Ponzi collapse but still keep positive GDP growth is not all that it seems.
I don’t want to detract from China’s accomplishment here, or say that its macroeconomic stability is entirely fake. China has invented — or, perhaps, perfected — an alternative tool for macroeconomic stabilization. Countries all over the world, including the United States, should study China’s financial stabilization policy and think about how to accomplish something similar without direct government control over bank management.
But at the same time, I don’t think we ought to be idolizing Chinese macroeconomic policy either. Even if there don’t turn out to be long-term productivity costs — which is a big “if” — China still hasn’t managed to rewrite the rules of aggregate demand and aggregate supply.
https://www.noahpinion.blog/p/no-china-did-not-manage-to-avoid
Nobody has.
Nor can they.
And supply is directly linked to depletion.
Aussie may be last man standing in the "what happens if the Ponzi folds" debate / water cooler banter.
Even now, there is talk that an annual fall of 8-12% in house prices would be equivalent to economic Armageddon.
That should suggest to anyone that something is seriously, potentially wrong with an economy.
There budget has really put people of buying homes
Yes ultimately the economy however it's a direct consequence of previous Left/Right Govts excessively favorable policy settings on investment housing tax and their self managed Super options. Can't really blame the Aussies for doing their best to get ahead, the central & state govts clip the ticket in many other ways
Yes ultimately the economy however it's a direct consequence of previous Left/Right Govts excessively favorable policy settings on investment housing tax and their self managed Super options. Can't really blame the Aussies for doing their best to get ahead, the central & state govts clip the ticket in many other ways
The common thread across the Anglosphere in the different Ponzis is related to the shared paradigm on money supply and how credit creation should be applied. Basel capital rules contributed to housing and broader Ponzis across the Anglosphere mainly by making mortgage lending relatively cheap in regulatory capital terms, encouraging banks to create mortgage credit out of thin air at the expense of business lending, and amplifying existing pro-housing tax and policy biases.
That being said, each country shapes its own policy accordingly.
poor Aussie, where a Qantas baggage handler or a Sydney harbour ferry deck hand make $150k a year.
poor poor aussies.
Yes, but Tim Tams are twice the price compared to what one pays at Costco in the U.S.
I love the way the Aussie media are so convinced that house prices will fall exactly 9-12%
yeah like some magic breaking force will halt the fall around 10%,
sadly they will fall until they find enough buyers to stop the falls.
And in the case of Aussie, 4 yrs ago, when Team Albo came to power, the number of temporary visa holders in Australia was 1.7 million. At the time Housing Minister Clare O’Neil said the migration system was broken, the number was too high and she would reduce it.
That number is now 2.7 million.
Maccy B points out that they still use the same spin: affordable housing with limited detriment to existing house prices.
https://www.macrobusiness.com.au/2026/07/labor-says-housing-is-broken-a…
I agree with you, Phoenix.
In the Western private banking cartel model, banks are not even restricted by the traditional fractional reserve requirement of having to find savers first - as such the only speed limiter on how much mortgage credit they can create, is their Basel Capital Adequacy ratio (IOWs, their percived ability to absorb losses).
The loophole is that because Basel assigned artificially low risk weights to residential mortgages, banks needed to hold very little equity against them.
Combined with the ability to create money out of thin air, the low Basel risk weights acted like a massive accelerator, allowing banks to flood the Anglosphere with almost unlimited credit.
The disparity between how banks price loans for the productive economy (farms, small businesses, plants, and equipment) versus the speculative economy (housing) is the core mechanism that drives property bubbles while simultaneously starving real economy.
Banks structurally charge significantly more interest on commercial and agricultural lending than they do on residential mortgages. This creates a multi-layered distortion across the economy.
The Interest Rate Disparity: Commercial loans carry a risk premium margin that is typically 1.5% to 3.0% higher than residential mortgage rates.
Because banks require a much higher return to justify commercial loans, capital flows naturally along the path of least resistance -housing.
How This Blew the Property Bubble
The mechanism connecting high business rates to a property bubble relies on three institutional factors:
1. The Basel Capital Subsidy: Under the international Basel Accords, banks must hold roughly 3 to 4 times more regulatory equity capital against a business or farm loan than against a residential mortgage. Because mortgages are deemed "low risk," banks can leverage their balance sheets heavily. This means a bank makes a much higher Return on Equity (ROE) selling a cheap mortgage than an expensive small business loan.
2. Cross-Subsidisation: Industry analysts note that banks frequently use the higher, more lucrative interest margins extracted from farms and businesses to subsidise aggressive price wars in the residential mortgage sector. High business loan profits directly fund competitive, artificially low mortgage rates, pouring more fuel onto the housing fire.
3. Collateral Asymmetry: To secure a commercial loan at a semi-reasonable rate, banks almost always demand a general security agreement over a residential home as primary collateral. This structurally ties the ability to run a productive business to the ownership of real estate, reinforcing the cultural belief that property is the only "real" asset class.
How It Hinders the Productive Economy
Capital Starvation for Upgrades: When a manufacturer wants to buy a automated plant or a farmer wants to invest in environmental technology, they face high double-digit floating or overdraft rates. The return on investment (ROI) on a new piece of machinery cannot compete with the borrowing costs, so the project gets shelved. The productive economy stagnates.
The "Brain and Capital" Drain: If an entrepreneur has $500,000 in capital, they face a choice:
Start a business, buy plant equipment, hire 10 people, pay 9% interest, and face intense operational risk.Leverage that $500,000 into a $2.5 million residential property portfolio at 6.5% interest,.
Or, sit back, and wait for untaxed capital gains.The banking system makes the speculative choice vastly more profitable and less risky.
Generational Debt Trap for Young Farmers: Young operators trying to enter sectors like agriculture face crippling financial stress. Because banks view them as high-risk, they are priced at high margins, meaning the ownership of productive land increasingly consolidates or falls behind in modern capital reinvestment. (I know this from personal experience - spending almost 50 years in a debt-trap scenari0)
Summary
By making credit for building, manufacturing, and growing things expensive and capital-intensive, while making credit for bidding up the price of existing houses cheap and capital-light, the banking sector creates a self-fulfilling loop.
The property bubble inflates because it is the only asset class the financial system explicitly protects, while the real, wealth-generating economy is left to starve under the weight of higher borrowing costs.
Good summary. The Basel Capital Subsidy and Collateral Asymmetry are particularly important IMO. The latter is a real issue if the Ponzi goes in to reverse as credit constrains spill further in to the economy.
Having a births the same as 1949 will be hammering aggregate demand.
https://www.nytimes.com/2026/01/18/business/china-population-data.html
Phoenix, you said...
"Interesting read from Noah Smith about how the idea that China has been able to see its residential Ponzi collapse but still keep positive GDP growth is not all that it seems."
Precisely - However it needs to be stressed that there is a massive structural caveat unique to China.
Furthermore the sinophobic position of the entrenched Western system of ~97% of money creation being carried out (literally) by the private banking cartels, precludes more than 90% of us even hearing about this system, let alone having the nuts and bolts of money creation choices being explained to us.
Specifically - a huge percentage of the Chinese banking system operates as a public utility - a system that is often labelled the PBS (Public Banking Solution) because that is precisely what it is. It works for the working classes and the productive sector of the economy - IOWs, as a utility to create societal wealth, rather than for feathering the pockets of a tiny minority of obscenely wealthy plutocrats.
Neither did the Chinese invent this system, they simply borrowed it from the West, refined it, and then proceeded to increase their GDP some 25x, without ever imposing debilitating inflation on the economy. Of course this system is deemed the devil incarnate by the Western private monopolies because it, by definition, removes the silent tax imposed on the working classes, AKA as inflation, or currency dilution.
The PBOC exerts tight, direct control over their money creation model. While a Western central bank mainly influences money creation indirectly via interest rates, the PBOC exercises strict, hands-on control over the volume and direction of bank lending.
What Percentage of the Chinese System is Run as a Public Utility?
If we define a "public utility" as a financial entity owned, operated, and directed by the state to serve national policy goals, rather than pure profit maximization for the bank owners, roughly 85% to 90% of China’s entire banking system operates as a state public utility.
Virtually the entire banking apparatus is an extension of the state, broken down into three tiers -
The Policy Banks (100% Utility): Banks like the China Development Bank (CDB) operate entirely as non-profit public utilities to fund massive state projects, such as high-speed rail and the Belt and Road Initiative.
The "Big Six" State Commercial Banks (~43% of total assets): These giants (like ICBC and Agricultural Bank of China) are publicly traded, but the Chinese government maintains the definitive majority stake. Their top executives are appointed by the Communist Party, and their primary mandate is stabilizing the national economy rather than maximizing shareholder return.
Local and Joint-Stock Banks (~35-40%): Most smaller city and rural commercial banks are owned or strictly controlled by provincial and municipal governments.
The Private Sector (~10-15%): Purely private or foreign-owned banks make up a tiny, heavily restricted fraction of the overall market. These commercial banks create money, but follow strict PBOC credit quotas.
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