A review of things you need to know before you sign off on Wednesday; RBNZ sends dovish signals so TD rates now on watch, migration turns negative, tourism recovers, job ads dive, swaps fall sharply, NZD down, & more

Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).

MORTGAGE/LOAN RATE CHANGES
There are no changes to report today. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
None here either. All rates less than 1 year are here, for 1-5 years, they are here. Just saying, but if official rates do fall and markets start pricing those in, we are could possibly see an early reaction in TD offers being trimmed. Any offer 6% or more looks good in this environment.

'APPROACHING TARGET RANGE'
The RBNZ's July Monetary Policy Review had clear dovish overtones, more so than the slightly dovish tone expected. It has held the Official Cash Rate at 5.50% but noted this policy may be hurting the economy more than expected. The NZD fell -30 bps on the news and is now down -40 bps. The 1 year NZGB yield has been little-changed but the 10yr fell -10bps. Just prior to the release, the NZX50 was down -0.2% but then moved up into a +0.3% gain on the prospect of lower rates (so far at least). After this, it probably won't be a surprise is financial markets price in a better-than-even chance of a -25 bps rate cut at the next (August 14, 2024) MPS meeting & review.

INFLOW TURNS TO OUTFLOW
About 2000 more people left the country permanently in May than arrived permanently, according to data released by Stats NZ today. Ignoring the pandemic distortion, the last time an outflow was that big was 2012.

TOURISM IMPROVES BUT STILL BELOW PRE-PANDEMIC
There were almost 180,000 tourist visitor arrivals in May, +12% more than in the same month in 2023. (For perspective in May 2019, tourist arrivals were 219,300, so we are still -18% below than pre-pandemic benchmark.) As Infometrics noted, it is the lack of visitors from China that is restraining the recovery.

NO CHANGE
After being pressed by the Environmental Law Initiative and others, the Environmental Protection Authority has determined there are no grounds to review the approval for the use of glyphosate, the active ingredient in weed-killers such as Round Up. 'New data' supplied by ELI turned out to just be 'literature reviews' of old data. The EPA stands by its earlier assessment that glyphosate-containing substances can be used with the assigned rules for use. They were also assigned hazard classifications. The assessment process looks at potential effects on the environment, public health, Māori culture, people and communities, and the economy.

'A FASTER PACE OF DECLINE'
The BNZ/Seek employment report for June found job ads fell -8.2%, the largest monthly fall since the lockdown-affected month of August 2021. Excluding lockdown volatility, job ads are now at their lowest level since October 2013. More here.

OK BUT FALTERING
Transpower reports that hydro storage remained at 71% last week. North Island hydro storage dropped from 63% to 55% of the historic mean for the time of year, and South Island storage increased from 72% to 73%.

TARGETING CAR FINANCE
The Commerce Commission is progressing criminal proceedings in the District Court against El Cheapo Cars (trading as Ezybid Finance) in its third action in the car finance sector this year – alleging borrowers were not provided key information about their loans. The Commission is seeking a fine and compensation for the 478 borrowers who did not receive variation disclosure, following agreed changes to the terms of their existing loans. El Cheapo is cooperating with the proceeding and has entered guilty pleas to the seven charges the Commission filed against it.

WDC GETS AA-
Fitch Ratings has assigned Whakatane District Council a first-time Long-Term Local-Currency Issuer Default Rating of 'AA-' with a Stable Outlook, and a Short-Term Local-Currency IDR of 'F1+'. Credit rating perspective is here.

HARD TO MAKE PROGRESS
In Australia, monthly tax activity data (including GST) shows that business turnover fell -0.6% in May from April on a seasonally adjusted basis, to be up +1.6% for the year. If it wasn't for the mining sector's -5.5% annual retreat, it would have been more than this.

CHINA CPI DOESN'T RISE AS EXPECTED
In China, their CPI inflation is still positive, just. It came in at 0.2% from a year ago in June. Analysts had expected it to rise +0.4% from the April and may rates of +0.3%. Beef prices are still falling hard, now down -13% from a year ago. Lamb prices are down -7% on the same basis. Milk prices are down -1.8%.

CHINA PPI DEFLATES LESS
China's producer prices are still deflating, down -0.8% in June from a year ago. That was as expected and less than the -1.4% annual rate in June.

SWAP RATES DIVE
Wholesale swap rates are likely to be lower today after the MPR from the RBNZ. Immediately after the 2yr fell -8 bps and has kept on falling, now down -18 bps and the 10yr fell -4 bps initially, also more as time went on. And they are moving still. Our chart below will record the final positions. The 90 day bank bill rate was unchanged at 5.60%, a level it has hovered around for 125 days now. The Australian 10 year bond yield is up +1 bp from this time yesterday at 4.39%. The China 10 year bond rate is down -1 bp at 2.28%. The NZ Government 10 year bond rate is down -7 bps at 4.61% and the earlier RBNZ fix was at 4.65% and unchanged from yesterday. The UST 10yr yield is up +3 bps from yesterday at 4.30%. Their 2yr is still at 4.63%, so the curve is less inverted, now by -33 bps.

EQUITIES QUITE MIXED
The NZX50 is up +0.3% from yesterday in late trade. But the ASX200 is down -0.2% in afternoon trade. Tokyo is up a minor +0.1% at its open, holding its new all-time highs. Hong Kong is up +0.5%, but Shanghai is down -0.4% to open their day's trading. Singapore is up +0.6%. Wall Street ended its Tuesday trade with the S&P500 up an insignificant +0.1%.

OIL DOWN
The oil price is down another -US$1 at US$80.50/bbl in the US, and at just on US$84/bbl for the international Brent price.

GOLD LITTLE-CHANGED
In early Asian trade, gold is up +US$3 from yesterday at US$2367/oz.

NZD FALLS
The Kiwi dollar is down -40 bps from this time yesterday, now at 60.8 USc. (For perspective, that only takes it back to where it was at the beginning of July.) Against the Aussie we are down -50 bps at 90.3 AUc. Against the euro we are also down another -¼c at 56.3 euro cents. This all means the TWI-5 is now just under 70.

BITCOIN SLIGHTLY FIRMER
The bitcoin price has bounced back a bit more today, now at US$57,923 and up +1.3% from yesterday's recovery. Volatility of the past 24 hours has been modest at just under +/- 1.2%.

This soil moisture chart is animated here.

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