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
BNZ dropped all its fixed rates today matching its main rivals. They also simplified their carded rate offers, essentially making their old discounted 'Classic' rates their Standard rates in a move that mirrors what ASB did many months ago. It is a change that will benefit FHBs especially even if they kept their LEPs. There were also cust from the Police Credit Union, and WBS. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
The Police Credit Union cut rates today. Sharsies said its Sharsies Save account rate fell today from 4.60% to 4.35%. But it also said its promotional 5.00% rate will continue until August 31. All updated rates less than 1 year are here, for 1-5 years, they are here.
SELLER PRICE EXPECTATIONS CAPITULATE
The REINZ's national median price was down another -$17,000 in July from June, with the Auckland median down -$80,000. House prices continued to tumble in July but that's proving to be good news for buyers as sellers seem to be capitulating in some markets. Deals are getting done, with transaction volumes up to 5806 compared to 5070 in July 2023.
COMCOM PRESSES FOR MORE BANK COMPETITION
Commerce Commission backs away from recommending shake-up to banks' regulatory capital requirements in its final banking competition report. It pins its hopes for more competition in the sector on a capital-bolstered Kiwibank & open banking. More here.
CONFLICTED MORTGAGE BROKERS IN CROSSHAIRS
In its response to the ComCom report, Consumer Affairs Minister Bayly notes the Commission found mortgage brokers are aligned with the banks and often only put forward one home loan offer to their clients. "I will be encouraging the Financial Markets Authority to pull every lever they can to ensure mortgage advisers are transparent about who they act for and what commission structures are in place," he said.
SIGNS OF LIFE
Latest SEEK NZ employment report shows signs of life in July with particular strength in Bay of Plenty and Manawatu. They say job ads rose in July recording first monthly increase since January.
DEFICIT SHRINKS SLIGHTLY
In July 2024, compared with July 2023, goods exports rose by +$770 mln or +14% to $6.1 bln in the month. The import of goods rose by +$558 mln or +8.5% to $7.1 bln. That meant we ran a monthly trade deficit of -$963 mln. In July 2023 that deficit was $1.174 bln.
GOVERNMENT CUTS ETS UNITS BY 24 MILLION
The Government has decided to reduce the number of units in the Emissions Trading Scheme available between 2025 and 2029, by more than half, throwing out 24 million units in the process. Climate Change Minister Simon Watts made the announcement that the Government had reduced the number of units available between 2025 and 2029 from 45 million to 21 million. The Climate Change Commission (CCC) had advised the Government to trim the “oversupply” of New Zealand Units (NZUs) earlier this year. Watts said on Tuesday that the Government is going to retain the current auction floor price, the cost containment reserve price, and current reserve volumes of New Zealand units in the Emissions Trading Scheme (currently 7.7 million units). “Reducing the number of units will likely see the carbon price rise. We need the carbon price to encourage businesses and individuals to reduce their emissions to meet our climate targets,” Watts said. ANZ Agriculture Economist Susan Kilsby said the changes were “largely aligned” with the CCC recommendations so were unlikely to surprise the market.
HUGE SYNDICATION, HUGER DEMAND
The Debt Management Office of Treasury has today announced that $6 bln of the nominal 15 May 2036 New Zealand Government Bond has been issued via syndication. It was done at a yield to maturity of 4.365%. Total book size exceeded NZ$22.7 bln.
EYES ON DAIRY PRICES
There is another full dairy auction tomorrow, and actually the chance of another small rise is real. Last week's Pulse event brought a +0.4% rise from the prior week's full GDT event. And the derivatives markets suggests another ~3% rise is on the cards tomorrow. For WMP, last week's Pulse event delivered a +1.0% rise from the prior full GDT event. The derivatives market suggests an additional +1.5% is possible tomorrow.
EARNINGS SEASON UPDATES
Our NZX50 profiles have been updated with the recent release of full year results to June 30, 2024 for A2 Milk (ATM, #10), Freightways (FRT, #21), Skellerup (SKL, #33), Contact Energy (CEN, #9) Vital Healthcare Property (VHP, #23), and Mercury (MCY #4).
NEW FEATURE
Check out our new quick update of how the NZX is faring today, as at 3pm. We welcome comments on that update story.
CHINA HOLDS RATES UNCHANGED
China held its Loan Prime Rates unchanged, as expected. The 1-year loan prime rate (LPR) is still at 3.45% while the 5-year rate was retained at 3.85%. Both rates are at record lows, coming after unexpected rate reductions in July.
UPSIDE RISKS HIGHLIGHTED
The RBA released the minutes of its August 6 meeting (what takes them so long?) and those warned of upside risks to inflation and therefore monetary policy. The risk of inflation not returning to target within a reasonable timeframe had increased, those minutes showed. The situation came amid the slow pace of disinflation, signs that the gap between aggregate demand and supply was larger than previously anticipated, and the upward revision to the forecast for final demand. Markets didn't react immediately to the 'warning'.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed today. Our chart below will record the final positions. The 90 day bank bill rate is up +1 bp at 5.25%. The Australian 10 year bond yield is unchanged at 3.96%. The China 10 year bond rate is down -3 bps at 2.16%. The NZ Government 10 year bond rate is up +4 bps at 4.26% and the earlier RBNZ fix was at 4.21% and up +6 bps from yesterday. The UST 10yr yield is down -3 bps from yesterday at 3.88%. Their 2yr is now at 4.07%, so that curve is now inverted by -19 bps.
EQUITIES MIXED
The NZX50 is down another -0.9% in Tuesday trade. The ASX200 is up +0.3% in afternoon trade. Tokyo has opened up a strong +1.7% in a clear recovery. Hong Kong is down -0.3% at its open. Shanghai is down -0.9%. Singapore is up +0.7% at its open. The S&P500 ended its Monday session Wall Street up +1.0%.
OIL FALLS
The oil price is down -$2 from yesterday at just under US$73.50/bbl in the US, and at just under US$77/bbl for the international Brent price.
CARBON PRICE JUMPS
Today the carbon price is up +$6.50 to $60/NZU today in reaction to the Government announcement that future NZU releases will be sharply trimmed back. See above.. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD SLIPS SLIGHTLY
In early Asian trade, gold is down -US$4 from yesterday, now at US$2499/oz.
NZD FIRMER AGAIN
The Kiwi dollar is up +40 bps from this time yesterday, now at 61.1 USc. Against the Aussie we are up +20 bps at 91 AUc. Against the euro we are also up +20 bps at 55.2 euro cents. This all means the TWI-5 is up +30 bps from yesterday at 69.2.
BITCOIN RISES
The bitcoin price has jumped +3.2% from this time yesterday, now at US$60,520. Volatility of the past 24 hours has been moderate at just on +/- 2.6%.
USE OF AI
No articles on this news service are produced with AI. Occasionally we use AI to derive images. They are always identified in the attribution.
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