A review of things you need to know before you go home on Wednesday; property values still rising, banks not waiving paywave fees this time, still spending in L4, swaps rise, NZD rises too, & more

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

MORTGAGE RATE CHANGES
No changes to report again today.

TERM DEPOSIT RATE CHANGES
NBS raised some TD rates.

ON THE PUBLIC PAYROLL?
Government payments to businesses totaled $1.26 bln since the start of this lockdown, as the Wage Subsidy supports 28% of those in paid work.

TOPPING OUT YET?
The average market price of a dwelling increased by nearly +$15,000 in August, according to CoreLogic. But although property values are still rising in most parts of NZ, a drop in values in Hamilton and Rotorua may be a sign of waning investor activity.

WHERE IT'S TIGHTEST
Wellington, Taranaki, and the down the east coast of the North Island are all regions where housing market supply is tightest, as measured by realestate.co.nz's weeks of inventory levels. But its getting much harder to sell quickly in the Wairarapa.

GOTCHA!
The country's major banks are not repeating their 2020 waiving of contactless debit fees for business customers.

CARBON PRICE JUMPS
The price for a NZU (New Zealand Unit, which is equal to the equivalent on one tonne of CO2), has jumped to NZ$59.00 and up +15% in just one week. This mirrors big increases in the EU carbon price recently which has now reached €60.76 (or NZ$101.75, so the Kiwi price appears 'cheap' by comparison).

STILL SPENDING IN L4
Data from Kiwibank shows a significant drop in spending during the latest lockdown - but much smaller than the drop seen at Level 4 last year. BNZ is doing similar, and even more extensive analysis, and showing similar results

UNREASONABLE FEES DRAW $1 MLN SETTLEMENT
Vehicle finance company Mainland Finance has entered into a settlement with the Commerce Commission acknowledging that it charged unreasonable credit and default fees and agreeing to compensate borrowers $1.1 mln. It has agreed with the Commission that between 1 April 2015 and 30 March 2019 its consumer credit contracts with borrowers breached the Credit Contracts and Consumer Finance Act (CCCF Act) by providing for unreasonable fees. 

SUPER SHORT TENURE FOR ASB DIRECTOR & OTHER BANK BOARD CHANGES
1) ASB says Greg Cross, who joined its board as a director as recently as August 16, is stepping down immediately to focus on overseas business interests. Cross has led Microsoft NZ, been chairman of the IceHouse and chairman of NZ Trade and Enterprises’ Global Beachhead programme.
2) Heartland Group Holdings says it's appointing Geoff Summerhayes and Kate Mitchell as directors, effective October. Summerhayes, recently an APRA board member, has worked for National Australia Bank and Suncorp, and been an executive committee member of the International Association of Insurance Supervisors. Mitchell, a director of subsidiary Heartland Bank since 2019, worked for 20 years as an investment banker in the UK.
3) Westpac NZ says Malcolm Bailey retired from its board on August 31 after a nine-year stint. Meanwhile, three new directors are joining. David Havercroft joined as an independent director on August 19. Havercroft has been advising the Westpac NZ Board Technology Committee since 2020, and is a director of Southern Cross Cable Networks, KiwiWealth, Kordia Group, Connect 8 and Spark NZ. Additionally Christine Parker and Michael Rowland have joined as representatives of Aussie parent the Westpac Banking Corporation. Westpac NZ announced in July chairman Jan Dawson would retire on October 1 to be succeeded by Pip Greenwood.
4) Tony Carter retired as an ANZ NZ director effective August 28.

STRONGER THAN EXPECTED
Much to everyone's surprise, the Australian Q2 GDP recorded better-than-expected economic activity. (Some analysts had earlier in August even feared a retreat.) This has powered wholesale rates and exchange rates up, and the Kiwi is along for the ride. By any measure, this is a very good result. The key surprise – a curveball from “other” inventories – they added 0.5ppts in the quarter, accounting for 70% of growth in the Q2 period. For the full year to June 2021, nominal GDP now exceeds AU$2.067 tln, up +4.2% above the equivalent June year in 2020, and +5.9% higher than the pre-pandemic June year to 2019. New Zealand releases its Q2 GDP results on September 16, 2021.

CHINA'S ECONOMIC STAR IS DIMMING
The private Caixin PMI survey in China has reported a contracting factory sector. Yesterday, the official version suggested it has stalled. The differences between the two surveys are minor and both record a downward trend.

PANDEMIC PRESSURE REMIANS INTENSE
In Australia, there were another 1116 new community cases in NSW today with another 967 not assigned to known clusters, so they remain completely out of control. They now have 18,960 locally acquired cases. Victoria is reporting another 120 new cases today, so it is bad there too. Queensland is now reporting one new case. The ACT has 23 new cases. Overall in Australia, more than 35% of eligible Aussies are fully vaccinated, plus 24% have now had one shot so far. There was only one new case in New Zealand at the border, but 75 more in the community, all in Auckland. So far, 28% of eligible Kiwis now have both shots, another 25% the initial shot.

GOLD STABLE
Compared to where we were yesterday, the gold price is unchanged at US$1813/oz in early Asian trade, after finishing at US$1814/oz in New York and the same in the afternoon London fix.

EQUITIES SLIP EXCEPT TOKYO
The NZX50 is flat in late trade while the ASX200 is down -0.5% in early afternoon trade. Tokyo has opened up a very strong +1.1% today while Hong Kong has slipped -0.1% in very early trade. Shanghai is down the same. Earlier the S&P500 closed down -0.1% in their Wall Street Tuesday session.

SWAP & BONDS RATES JERK HIGHER
We don't have today's closing swap rates yet. They have probably moved higher, with the one and two year swap rates up +2 bps. We will update this if there are significant changes when the end-of-day data comes through. The 90 day bank bill rate is up +4 bps at 0.50%. The Australian Govt ten year benchmark rate is now at 1.25% and up a massive +10 bps. The China Govt 10yr is now at 2.84% and down -3 bps. The New Zealand Govt 10 year rate is now at 1.82%, also up sharply and by +9 bps and well above the earlier RBNZ fix for that rate at 1.76% (+4 bps). The US Govt ten year is now at 1.33% and +6 bps higher than this time yesterday. Globally, rates are responding to ECB tapering talk, bolstered locally by the Aussie GDP.

NZ DOLLAR STILL RISING
The Kiwi dollar is now at 70.5 USc, and and has held this new higher level all day. Against the Aussie we are unchanged at 96.3 AUc and still a sixteen month high. Against the euro we are slightly firmer at 59.7 euro cents. The TWI-5 is now at 73.6 and creeping to the upper end of the 72-74 range we have been in for most of the past ten months.

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BITCOIN STABLE
The bitcoin price is now at US$46,816 and virtually unchanged from this time yesterday. Volatility in the past 24 hours has been modest at +/- 1.8%.

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