A review of things you need to know before you go home on Thursday; TD rate rises, record house prices, inflation expectations up, carbon price at record high, swap rates firm, NZD firm, & more

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

MORTGAGE RATE CHANGES
None to report here today.

TERM DEPOSIT RATE CHANGES
Rabobank raised rates. It now has the highest rate for any bank at 2.25% pa (even if it is for five years). Their 6 month rate is 1.35%, their one year rate is 1.55%. These are all the highest for any bank for those terms.

HOUSE PRICE RECORD
REINZ reported that the national median selling price for transactions they monitored in July (more than 90% of all transactions) rose to a new record high of $826,000, +$11,000 higher than for June and up +25% in a year. In Auckland, a record high was reported there as well at $1,175,000, up $25,000 in one month. But in a growing number of other provinces prices declined or were unchanged, and that could be a telling sign house prices are at or past their peak. Eight of sixteen provinces are now in this category.

FOOD PRICES UP
Food prices were up +1.3% in July 2021 compared with June 2021, mainly influenced by higher prices for fruit and vegetables, and grocery foods, Stats NZ said today. That may not seem a lot for one month, but for the whole year they were only up +2.8%, so half of that has come in the past 45 days. Grocery food was up +9.5% in a year, which is a lot. It was only because meat, chicken and fish were unchanged that the overall index was restrained.

RENTS UP
Rental prices are up nationally by +4.9% in July from a year ago and still being pushed up by increases in provincial areas. Now however Auckland seems to be rising to, up +3.1% and that is its highest in 28 months. Wellington is up +5.4% in a year, and Christchurch is up +4.0% in a year.

PROFITS UP - 'ROBUST GROWTH' FOR BNZ
BNZ's parent National Australia Bank (NAB) has posted its third quarter trading update saying its NZ unit delivered "robust growth" with lending up +2.7%. NAB's unaudited cash earnings rose +10%, versus the third quarter last year, to A$1.7 billion.

INFLATION EXPECTATIONS JUMP
The influential RBNZ survey of business expectations (M14) reports Q3 inflation at 3.02% in one year and 2.27% in two years, both large rises in terms of this survey. More here.

DTIs THROUGH THE ROOF
Debt to income ratios of home buyers are still going through the roof, a crunch of the latest Reserve Bank figures on residential mortgage lending by debt-to-income ratio (DTI) shows.

NZGB YIELDS RISING
Today's NZGB bond tender offered $500 mln in three tranches, and got $1.08 bln in bids from 80 bids. 40 of them were successful. The May 2024 offer of $200 mln was won at a yield of 1.17% pa, much higher than the 0.88% pa in the same maturity two weeks earlier. The May 2031 $200 mln was won at a yield of 1.71% pa, but that was lower than the 1.79% at the equivalent auction seven weeks ago. The $100 mln for the April 2037 bond went for a yield of 2.17% pa which was above 1.94% two weeks ago.

LGFA YIELDS RISING
There was an LGFA bond tender today as well, with four tranches totalling $240 mln. Interestingly, the April 2027 $50 mln waqsn't popular, only attracting $45 mln in bids, an unusual shortfall. It has been six years since a situation like that has happened before. Yields for all the offers were all higher than at the pervious equivalent tenders.

CARBON PRICE HITS RECORD HIGH
The price one NZU is now at $49.65, a record high. At $50 the Government is supposed to release more capacity into this market. One NZ Unit is one tonne of CO₂ emissions. (The carbon price is 'live' in chart form in the RH sidebar of our Rural pages - but you will need a full desktop screen to see it.)

FED UP
In Australia, it is being reported that CBA group governance executive general manager Kara Nicholls is suing the bank for allegedly seeking to fire her last week in response to “whistleblower” complaints she made to senior officers and chairman Catherine Livingstone about the bank’s failure to respond to repeated warnings on understaffing and workers’ safety.

PRESSURE IN AUSTRALIA INTENSIFIES
The Australian Capital Territory is now in lockdown with a case popping up there. There were another 347 new community cases in NSW today with another 217 not assigned to known clusters, so they are still not getting on top of their outbreak. Victoria is reporting another 20 new cases today and their lockdown is to be extended. Queensland is reporting 11 new cases. Overall in Australia, more than 24% of eligible Aussies are fully vaccinated, 45% have now had at least one shot. There were eight new case in New Zealand at the border, but still none in the community. New Zealand reports 36% of its eligible population having had one vaccine jab, with 21% having had two.

GOLD UP
Compared to where we were this time yesterday, the gold price is up at US$1749 and a rise of +US$17 from this time yesterday. But it is down -US$3 from the New York close and up +US$5 from the afternoon London fix.

EQUITIES GENERALLY UP
The S&P closed its Wednesday session up +0.3% on Wall Street. Tokyo has opened today up +0.3%. Hong Kong has opened flat, and Shanghai is up +0.1% in early trade. The ASX200 is flat after yesterday's rise. The NZZ50 Capital Index is the outlier, down -0.4% in late trade.

SWAP & BONDS RATES STILL FIRM
We don't have today's closing swap rates yet and if there are significant ongoing changes we will note them here. They are probably higher. The 90 day bank bill rate is up +2 bps at 0.69%. The Australian Govt ten year benchmark rate is down -3 bps at 1.20%. The China Govt ten year bond is down -1 bp at 2.89%. The New Zealand Govt ten year however is up +1 bp to 1.73% and now above the earlier RBNZ fix of 1.71% (+2 bps). The US Govt ten year is now at 1.35% and staying up.

NZ DOLLAR STAYS UP
The Kiwi dollar has bounced back today after yesterday's fall, and now at 70.4 USc. Against the Aussie we are little-changed at 95.6 AUc. Against the euro we are firmer at 60 euro cents. The TWI-5 is now a touch higher at 73.5, still in the middle of the ten month 72-74 range.

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BITCOIN UP
The bitcoin price is now at US$45,992 and up +1.2 from this time yesterday and back to the Tuesday level. Volatility in the past 24 hours has stayed low at just over +/- 1.5%.

This soil moisture chart is animated here.

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