A review of things you need to know before you sign off on Friday; Westpac raises rates, food prices tame, fuel prices high, rents dip, regional winners, trade deficit stuck, job ads trend up, swaps soft, NZX soft, 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
Westpac has raised all its fixed rates today by between +16 bps an +26 bps. Details here. 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 has raised most of its term deposit rates for 1-5 years. Details here. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

FOOD PRICE PRESSURE LOW
Food prices rose just +1.9% from a year ago. Grocery food was up just +1.7%. These August results largely confirm the Infometrics/Foodstuffs supplier cost monitoring. Not low are increases for household electricity and gas, up +9.0% and +11.0% year-on-year respectively. But the month-on-month rises for both are negligible suggesting the pressure is going out of these costs. There are no surprises in this data.

FUEL IN FOCUS
Today's Selected Prices inflation report reveals that petrol rose +18% over the past year to August, diesel was up +46%. These are large outsized rises and are costs that flow though to businesses as well as consumers. And they will be higher when the September data is released (on October 16). All the same, there are no real surprises here. But what is difficult to reconcile is why the Americans are facing much sharper cost increases, almost double ours; +38.7% for petrol and +72.6% for diesel. After all, they are a net oil exporter. We are a 100% importer. Why is this the case? Some policymaking there is seriously out of whack.

LOWER RENTS AS THE NUMBER OF RENTED PROPERTIES AT A 10 YR HIGH
Despite a surge in properties being rented in July the median rent fell. There has been no growth in residential rental income for landlords as the number of newly tenanted properties hits a 10-year high for the time of year - and the median rent goes backwards.

RESTRAINED BUDGETS
There were just 208 new tractors registered in August, -17% below the average of the prior ten years of 250 in the same month. Good farmgate returns aren't translating into investments in new tractors.

REGIONAL WINNERS - AND LOSERS
High dairy and meat prices are really helping those urban centers closely tied to agriculture. The ASB Regional Economic Scorecard shows that dairy and meat powered Canterbury, Taranaki and Southland into the top three spots, boosted by Fonterra’s capital return and strong export earnings. But the Bay of Plenty recorded the biggest fall, dropping from first to 11th, while Gisborne, slipped from 5th to 13th. Auckland fell one place but remains in the top half of the rankings. Inflation rose, unemployment increased and the housing market softened in Q2-2026, but strong export demand continued to shine through as a bright spot for the economy.

SHIFTING TRADE RELATIONSHIPS
July to October are the four months where we run our largest monthly trade deficits and this year is no different. The August export data released today reveals a +15.4% rise to $6.65 bln. But our imports rose 13.1% to $8.0 bln. In dollar terms exports rose +$888 mln and imports rose +$924 mln from a same month a year ago. So no net progress for the deficit which was -$1.35 bln. Meat, gold and aluminium where the biggest export gainers in August. Of course, fuel rose the most for imports. But we also bought a seriously large volume/value of commercial machinery, and cars. We actually ran a -$600 mln trade deficit with China in August (cars?) which was much larger than the year-ago level. But we ran a +$275 mln surplus with Australia, a +$60 mln surplus with the US, we have a balance with Japan, and a huge -$650 deficit with Korea (cars again). And also interesting is how small our trade is with the EU and with the UK.

TREND BREAKING HIGHER
The August edition of the BNZ/SEEK employment report shows that job ads increased +5.3% in August from July following a revised -4.2% drop over July. August’s data makes the prior dip look more like noise than signal. In fact, job ads are threatening to break free from the tight range they have operated in over the first half of the year with an upward trend becoming clearer. Job ads are +9.7% stronger than a year ago.

MORE WEAK GROWTH AHEAD
The RBNZ's weekly update to its GDP Nowcast suggests that Q3-2026 GDP will only bring a minor +0.4% expansion from Q2, based on the real time data that they currently see. At least that is not worse than Q2.

WATER STORAGE UPDATE
Auckland's dam water storage is currently at 94% full. Normal for this time of year is 84%. This time last year they were exceptionally full at 99%. Auckland's water supply is in a good place if we go into a dry summer. Nationally the hydro lakes are currently about 50% above average (although this is measured on a capacity to generate basis rather than % full). These are all in good shape for a dry summer given that spring snowmelt is about to start.

NZX50 RETREATS TODAY
As at 3pm, the overall NZX50 index is down -0.6% today so far. But for the past 5 trading sessions it is up +0.6%. It is up +2.7% from six months ago. From a year ago it is now up +4.2%. Market heavyweight F&P Healthcare is down -0.8% so far today. Serko, Port of Tauranga, The NZX and AirNZ gain, while Gentrack, Mainfreight, Kathmandu and Auckland Airport retreat.

SECURITISED CAR LOANS
Toyota Finance has securitised $240 mln of their loan book via both a 3 Year Floating Rate bond and a 7 Year Fixed Rate bond. The floating rate note has been priced at the Base Rate plus the Issue Margin of 0.48%, and the seven year note is at 5.355%.

LOW INFLATION, NO PRESSUE
Japan's CPI inflation rate held at +1.9% in August as it was in July, and their core inflation rate eased to 1.7%. Both results were at the bottom end of expectations, and should have taken pressure off the Bank of Japan who have been meeting as this data was released. But they have other issues weighing on them including defending the yen, and facing bullying pressure from the Trump Administration. All the same, inflation this low when the global price pressure is high is an achievement, even if Japan is only one many Asian economies that are managing to replicate that result.

UP & MORE TO COME
As universally anticipated and earlier implied, the Bank of Japan delivered its +25 bps rate hike today, taking its policy rate to 1.25%. They said they will "continue to raise the policy interest rate and adjust the degree of monetary accommodation, in response to developments in economic activity and prices as well as financial conditions."

SWAPS SOFT
Wholesale swap rates will likely be notably lower today. Keep an eye on our chart below which will record the final positions closer to 5pm. The RBNZ 90 day rate was unchanged at 3.15% on Thursday. Today, the Australian 10 year bond yield has fallen back another -6 bps to 5.27%. The China 10 year bond rate is little-changed again at 1.68%. The Japanese 10 year bond is down -3 bps at 2.96%. The NZ Government 10 year bond rate is now at 4.96% and down -7 bps from yesterday. (The RBNZ 10 year rate is 'prior day' and was also down -2 bps to 5.00% on Thursday.) And the UST 10yr yield is now at 4.94%, and down -7 bps from yesterday at this time.

EQUITIES MIXED
The NZX50 is now down -0.8% from Thursday's close and giving up yesterday's gain. The ASX200 has opened down -0.1%. Tokyo has opened up +0.8%. The KOSPI has risen +2.2% at its open today. Hong Kong has opened up +0.7% while Shanghai is up +0.8% at its open. Singapore however is down -0.2% in early Friday trade today. Wall Street ended higher with the S&P500 up +1.1% and the Nasdaq was up +1.7%.

OIL PRICES SOFTEN SGHTLY
American oil prices are down -US$1 from yesterday with the WTI benchmark now at just under US$101.50/bbl, while the international Brent price is just under US$104/bbl and down -US$2.

CARBON PRICE HOLDS
There have been few reported trades today. The price has held at $52/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD UP SLIGHTLY
In early Asian trade, gold is up +US55/oz from this time yesterday, now at US$4337/oz. Silver is up +$2 at US$65.50/oz.

NZD LITTLE-CHANGED
The Kiwi dollar is little-change from this time yesterday, still at 57.2 USc. Against the Aussie we are down -30 bps at 80.3 AUc. Against the euro we down -10 bps at just over 49.8 euro cents. This all means the TWI-5 is now just under 60.7 and little-changed from this time yesterday.

BITCOIN FIRMS
The bitcoin price is now at US$77,387 and up +1.3% from yesterday. Volatility has been modest at just on +/- 1.0%.

HOW THE GLOBAL ECONOMIC FORCES AFFECT US
If you want to catch up on what happened last night, try our Economy Watch podcast, here.

This soil moisture chart is animated here.

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