A review of things you need to know before you go home on Wednesday; TD cuts by banks, bond markets signal risk off, more dodgy Chinese milk scandals, swaps slip, NZD slips, & more

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No changes to report.

TERM DEPOSIT RATE CHANGES
ANZ has reduced its TD rates by about -10 bps. Heartland has also cut TD and savings rates.

RISK OFF?
Bond markets internationally are signaling rising concerns, with falls in yields and benchmark bond prices rise on demand for low risk assets. It's a view equity markets haven't adopted yet although Wall Street sold off sharply at the close today and the futures market is signalling more falls tomorrow (which is when the US Fed will report).

MAJOR REPUTATIONAL RISKS
Giant dairy companies Yili and Mengnui, both of who have locally significant ventures in New Zealand, are getting beaten up in their home Chinese markets because of some very dodgy practices. More detail here. In addition, some daigou traders are closing up here as direct online trade booms for trusted brands rendering their services passé.

RECOVERING SOME OF THE $479 MLN FROM KIWIS WHO DON'T PAY TAX HERE
Kiwis abroad who visit New Zealand for less than 90 days to be charged for staying in managed isolation, as will New Zealanders who leave the country now, and some temporary visa holders.

RE-SHORING
Westpac Australia has announced it is re-shoring 1000 jobs. It offshored them via Concentrix about three years ago, with services delivered from the Philippines and India. This move doesn't involve Westpac NZ. A spokesperson said, "This has no impact on Westpac NZ’s operations. Our contact centres are all based in New Zealand which means when our customers call us, they’re connected with one of our New Zealand based staff."

EASING UP
Aussie prudential regulator APRA has replaced emergency guidance on dividends with a 50% cap on dividend payout ratios.

DEFLATION IN AUSTRALIA
The steep fall in CPI inflation in Australia predicted happened, but just a whisker less than expected. They reported -1.9% deflation in June from the March quarter, and annual deflation of -0.3%. This was the largest quarterly fall ever in Australia. Since 1949, this was only the third time annual inflation has been negative. The previous times were in 1962 and 1997-98. The pandemic benefit of the public provision of free pre-school childcare was the main contributor, along with lower petrol prices. Without both they would have had a small amount of inflation. Food prices were up +4.1% pa in the year to June.

DOWN BUT NOT OUT
The international air cargo market is far, far healthier than the passenger market, but it has it's own steep decline to report. Overall aircargo volumes were down -19% in June from the same month in 2019 (which was a smaller decline than in May) and Asia/Pacific markets were down -20%. The smallest drop was in North America, down -9%.

EQUITY UPDATES
Wall Street tailed off sharply at the end of its trading session today and ended down -0.7%. Shanghai has opened up sharply, up +0.8% while Hong Kong has opened up +0.3%. Going the other way, Tokyo has opened there down almost -0.8%. The ASX200 is flat (unchanged) in early afternoon trade, while the NZX50 Capital Index is up +0.3% in late trade.

SWAP RATES UPDATE
Swap rates were probably lower today as risk worries grow internationally. We don't have final wholesale swap rates movement details yet but we will update this later in the day if they show a significant different movement. The 90-day bank bill rate is unchanged at 0.30%. The Aussie Govt 10yr is sharply lower by -6 bps at 0.87%. The China Govt 10yr is firmer at +2 bps at 2.94%. However the NZ Govt 10yr yield is -3 bps lower at 0.81%. The UST 10yr down -5 bps from this time yesterday and now at 0.58%.

NZ DOLLAR SLIPS
The Kiwi dollar has slipped today and is now at 66.5 USc. And against the Aussie we are down to 92.9 AUc. Against the euro we are marginally weaker at 56.7 euro cents. And that means the TWI-5 has slipped to 69.8.

BITCOIN STAYS FIRM
The price of bitcoin has held its new higher level, unchanged from this time yesterday at US$10,916. The bitcoin price is charted in the currency set below.

This soil moisture chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».