A review of things you need to know before you sign off on Wednesday; June retail sales very soft, housing activity slow, construction costs rise, dairy prices fall, China data timid, swaps dip, NZX soft, NZD firm, & 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
No changes to report today although late yesterday SBS Bank announced its +25 bps rate hike to its floating rates. Update: Cooperative Bank increased its floating rate by +25 bps late today. 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
SBS Bank has raised its savings account rates too. Update: The Cooperative Bank changed many savings account rates, mostly by less than +25 bps however. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

CONSUMERS CONTINUE TO CUT BACK
There is disappointment for nearly everyone in the June retail indicators that come via StatsNZ's electronic card transaction data. Basically it undercut the recent narrative that "things are looking up". They may be for the rural economy, but not the urban economy. Fuel costs usually get the blame, but in fact in June we spent -1.7% less on fuel, even as we generally spent less on almost everything else. So the fuel cost savings did not boost other spending. That is likely due to continuing negative sentiment about what is to come and the recent geopolitical chaos. Overall, card spending fell -1.4% in June. Within that, durables fell -3.9%, apparel -2.2% and hospitality by -1.9%.

HOUSING MARKET WEAKER
The latest REINZ figures show national house prices and sales numbers both declined in June.

CONSTRUCTION COSTS RISE
This country's residential construction costs continued to edge higher in the June Quarter, rising +1.1% in the three months to June this year, slightly higher than the +1.0% growth in the March quarter, according to the Cordell Construction Cost Index, compiled by property data company Cotality, On an annual basis, residential construction costs were up +3.5% in the 12 month to June this year, up from +3.0% in the 12 months to March. Annual cost growth in the second quarter was at its highest level since mid-2023. Although that is still below the long term average of +4% annual growth, the latest figures suggest the recent period of unusually subdued construction cost growth has begun to fade. Annual residential construction cost growth has now accelerated for three consecutive quarters as the construction sector emerges from a prolonged downturn, with a significant lift in residential building consents.

DAIRY PRICES TURN LOWER, AGAIN
There was a Pulse dairy auction overnight and prices mostly dipped from last week's full event. Both butter and SMP dipped -0.4%, but the exception was WMP which rose +0.3%. The recently higher NZD has made those changes less in local currency, reinforcing the Fonterra payout reduction.

NZX50 DIPS
As at 3pm, the overall NZX50 index is down a minor -0.1% so far today, now with a weekly fall of -1.0%. It is also down -0.2% from six months ago. But from a year ago it is now up +7.5% (moving up due to base effects). Market heavyweight F&P Healthcare is down -0.4% so far today.

JAPANESE FACTOPRY ORDER RETREAT
After impressing in April, Japanese machinery orders took an outsized tumble in May. down -12.4% from April and far worse than market forecasts for a -4.2% decline. It seems a broad-based weakness in business investment is setting in. Orders from manufacturers dropped -14.9% (vs 5.1% in April), while non-manufacturing orders fell -9.3% (vs 6.7%).

CHINESE HOUSE PRICE RETREAT SLOWS
Chinese house prices are still falling but at a slower pace now as
background support measures and market cleanup activity is putting a floor under this weakness. China’s new home prices across 70 cities fell -3.3% in June from a year ago, the mildest contraction since February. Shanghai was a standout with a +3.1% rise on that same basis, the only one with a measurable gain. Meanwhile, pre-owned home sales prices fell almost -6% on the same basis, and resale prices in Shanghai were negative too.

WEAK CAR SALES UNDERCUT CHINESE RETAIL DATA IN JUNE
Retail sales in China were up +1.0% in June from a year ago, restrained in large part by shrinking retail sales of cars. Without that, sales would have been up +3.0%, just enough to be higher than their CPI inflation.

CHINA CLAIMS FAST INDUSTRIAL EXPANSION IN JUNE
Industrial production in China rose +5.3% in June, its fastest pace in three months. Meanwhile, electricity production, which some think is a more realistic indicator of industrial activity because it is less susceptible to regional manipulation, rose +2.0% in June from the same month a year ago.

CHINESE GDP SLOWS IN Q2-2026
Through all of this, China said its economic activity was up +4.3% in June from Q2-2025. This was slower than the +5.0% in Q1-2026 and lower than the anticipated +4.5% that analysts had forecast. And it is its slowest since Q4-2022. The uneven results posted today won't reassure Beijing. Markets are thinking they will announce new stimulus soon.

SWAP RATES EASE BACK
Wholesale swap rates will likely be slightly lower today but not really altering the rising trend. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +2 bps at 2.87% on Tuesday. Today, the Australian 10 year bond yield is -2 bps softer from yesterday at 4.90%. The China 10 year bond rate down -1 bp at 1.73%. The Japanese 10 year bond is down -9 bps at 2.67% today. The NZ Government 10 year bond rate is now at 4.68%, down -3 bps from yesterday. (The RBNZ data is now 'prior day' with the Tuesday rate up +5 bps at 4.66%.) The UST 10yr yield is down -2 bps at 4.60% in a minor risk-off hesitation.

EQUITIES UP, EXCPET THE NZX50
The local equity market is lower from yesterday, now down -0.2% so far. But the ASX200 is up +0.3% so far on miner strength. Tokyo has opened up +0.9%. Hong Kong is up +1.3% but Shanghai is little-changed at its open today. Singapore is up +1.1% at its open. Wall Street ended its Tuesday up +0.4% on the S&P500 with the Nasdaq up +0.9%.

OIL PRICES FIRM
American oil prices are up another +50 USb from this time yesterday with the WTI benchmark now just over US$80/bbl, while the international Brent price is just on US$86/bbl and up another +US$1.50, or +1.8%.

CARBON PRICE RECOVERS
There have been a number of much larger trades so far today but the price has firmed +$2 and back to $54/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD FIRM
In early Asian trade, gold is up +US$27/oz from yesterday, now at US$4038/oz. Silver is up +US$1 at just on US$58.50/oz.

NZD RISES
The Kiwi dollar has firmed against the USD from this time yesterday, now just on 58.2 USc and up +40 bps. Against the Aussie we are down -40 bps at 83.2 AUc. Against the euro we are up +10 bps at 50.9 euro cents. This all means the TWI-5 is now just over 62 and up +20 bps from this time yesterday.

BITCOIN RISES
The bitcoin price is now at US$64,456 and up +3.2% from this time yesterday. Volatility has been moderate at just under +/- 2.2%.

This soil moisture chart is animated here.

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