Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).
MORTGAGE RATE CHANGES
ASB announced increases for all its fixed rates to 3 years. The Resimac floating rate rises became effective today. All current mortgage rates are here. And note, you can compare mortgage offers with our unique calculator that takes into account other costs and cashback incentives, here.
TERM DEPOSIT/SAVINGS RATE CHANGES
The ASB also raised some TD rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
A SOFT ECONOMY DRIVES CHEAP COMMERCIAL PROPERTY
Construction of new offices and factories looking particularly soft. The latest building consent figures suggest a move towards building cheaper commercial properties.
THE FIVE FRIDAY BENEFIT
Consumer spending transacted through Paymark’s payments network was higher in July overall compared to the same month last year, but the spending lift seen in the early weeks was flattening by the end of the month. They reported transactions worth almost $3.8 bln in the month, up +1.7% from July a year ago (Auckland +1.9%, WaIKATO +3.7%, Wellington -0.8%, Canterbury +2.3%.). This year there were five Fridays however; last year only four. And Fridays deliver higher spending than most other days. Also, over the past year the CPI has risen +4.1%. These two factors consign the July 2026 as a poor result.
THE IRD IS WATCHING HORTICULTURAL EMPLOYERS
The IRD is calling out a number of practices in the horticultural sector which it believes pose a significant risk to the integrity of the tax system. The practices include workers being paid in cash, complex contracting arrangements being used to obscure what’s really going on, and obligations under the schedular payments rules not being met. They are so concerned that it has issued a Revenue Alert about the non-compliance.
NZX50 DIPS
As at 3pm, the overall NZX50 index was down -0.2% today, but up +1.5% for the past 5 trading sessions. It is up +3.9% from six months ago. From a year ago it is now up +8.5%. Market heavyweight F&P Healthcare is down -1.0% so far today. Serko, Scales, Precinct Properties and NZX have risen while the main decliners are Air NZ, Freightways, Meridian and Channel Infrastructure.
BIG DEMAND
Today's NZ Government bond tender was a big one, attracting 142 bids worth $2.366 bln for the $450 mln on offer in three maturities. That was the largest demand since March 2025 and it helped keep the yields similar to the prior equivalent maturities.
MILLER TO TACKLE FMA's PROBLEMS
Experienced company director James Miller has been appointed as the new Financial Markets Authority Chairman as the probe into the regulator's workplace conduct and culture gets underway.
CONSTRUCTION DELIVERED. NOW WE TEST THE PROMISED BENEFITS
Auckland's long-delayed and costly City Rail Link now has an opening date, September 13, 2026, a Sunday. The total cost is expected to be $5.5 bln, of which central government has contributed about half. The claim is that when working it will deliver faster journeys, more frequent services, better connections across the city, and take car trips off surface roads. We are about to find out if the money was worth it. It is a project that broke ground in June 2016 and was originally expected to be completed by 2024 at a cost of $3.4 bln.
A GOLDEN RESULT
Strong export growth in June delivered Australia an unexpected trade surplus, of +AU$1.9 bln when a deficit of -AU$1.1 was expected after May's -AU$2.4 bln deficit. Their exports rose +8.6% from a year ago, boosted by an unusual rise in gold exports, up more than +25% from the same month a year ago.
SWAP RATES HOLD
Wholesale swap rates may be marginally firmer today. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was unchanged at 2.94% on Wednesday. Today, the Australian 10 year bond yield is up +2 bps from yesterday at 4.93%. The China 10 year bond rate is holding just over at 1.70%. The Japanese 10 year bond is down -5 bps at 2.78% today. The NZ Government 10 year bond rate is now at 4.71% and up +1 bp from yesterday. (The RBNZ data is now 'prior day' with the Wednesday rate down -7 bps at 4.66%.) The UST 10yr yield is up +1 bp, now at 4.61%.
EQUITIES MIXED
The local equity market is now down -0.2%. Meanwhile, the ASX200 is up +0.4%. Tokyo however has opened down -1.6%. Hong Kong is down -1.8% but Shanghai is up +0.1% at its open today. Singapore is up +1.0% at its open. South Korea is has resumed its retreat, down -4.1% today so far. Wall Street ended its Wednesday trade with the S&P500 down -0.2% and the Nasdaq down -0.8%.
OIL PRICES FIRM
American oil prices have risen +US$1 from yesterday with the WTI benchmark is now just on US$75.50/bbl, while the international Brent price is just over US$78.50/bbl and also up +US$1.
CARBON PRICE HOLDS
There have been a few good trades so far today and the price has held at $55/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD RISES
In early Asian trade, gold is up +US$146/oz from this time yesterday, now at US$4275/oz. Silver is now just over US$62/oz and up +US$1.50 from the same time.
NZD FIRMISH
The Kiwi dollar is up +10 bps against the USD from yesterday, now at just on 58.9 USc. Against the Aussie we are also up +10 bps at 83.5 AUc. Against the euro we are up +10 bps at 51 euro cents. This all means the TWI-5 is now just over 62.5 and up +10 bps.
BITCOIN HOLDS
The bitcoin price is now at US$64,484 and up +0.3% from this time yesterday. Volatility has been low at just on +/- 0.8%.
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19 Comments
Their exports rose +8.6% from a year ago, boosted by an unusual rose in gold exports, up more than+25% from the same month a year ago.
Out of the blue, gold miner stocks came to life yesterday - the GDX ETF up a solid 7% in last night's session. Gold and silver been steadily declining after the fireworks, but something's in the air.
If UST reserves cannot be sold in a crisis without making the crisis worse by threatening a debt spiral, then UST’s are no longer fit for purpose as FX reserves.
In contrast, earlier this year, gold reserves were sold easily and quickly, which de-escalated the crisis.
Japan has trillions of USDs - a result of accrued surpluses over 50-60 years (and the investment gains on those surpluses). Few are thinking about what happens if Japan wants its trillions in USD assets to finance themselves.
Herron Todd White, Australia’s largest residential valuation firm by volume, will cut a net 40 roles as it consolidates operational and administrative tasks around the country into a new centralised service hub in South Australia. AFR points out that the slowdown in the Ponzi is contributing to this.
If there were any business that were right for efficiency and digital disruption, it would be the property valuation sector. These people are operating in the Stone Age.
https://www.afr.com/property/commercial/valuer-herron-todd-white-to-cut…
Amy chance there is a correlation between carbon trade and election polls? Genuine question? Might make a good hedge in case of a green/opportunity coalition
what happened today is C Luxon just became dead man walking
Bishop and Erica are next up
For National or Labour?
Labour is waiting until it can tell us hippy has run out of gas and Kieran Michael McAnulty is taking over... next 72 hours?
Both parties would be significantly better with those changes. So unlikely then.
when was the last time you saw hippy on screen?
The AI trade - scarfie sent me this to post from X
My wife is sleeping with our contractor. I want to be clear that I found out three hours ago and my first coherent thought was that this is vendor financing. I pay Todd. Todd is in my house nine hours a day. My wife is measurably happier. Our marriage counselor described this quarter as our strongest in years. So I paid Todd more. Do you see it? Every dollar I send Todd comes back to me as marital satisfaction, which I book as revenue, which justifies the next disbursement to Todd. One dollar out, several dollars of apparent demand back in. I am not a victim here. I am Nvidia. This is the thing nobody will say plainly about the AI trade. Nvidia takes equity stakes in the neoclouds, CoreWeave and Nebius and Nscale, and those companies turn around and buy Nvidia hardware, some of it with debt raised against Nvidia chips as collateral. The vendor funds the customer, the customer's purchase becomes the vendor's revenue, and the revenue justifies the valuation that funds the next customer. Demand looks broad and independent. It is neither. It's one organism holding hands with itself in a circle. My wife says I'm making this about markets to avoid making it about us. I said the whole point is that there is no distinction, the flows are the relationship, and she said "he finished the backsplash." He did not finish the backsplash. I need you to sit with that. The backsplash is the only verifiable claim in this entire story and it is false. Eleven months. Todd has signed off on work he has not commenced, which puts him in excellent company, because Moody's counts $662 billion of data center leases signed but not commenced, sitting off balance sheet where nobody has to look at them. The BIS, an institution so constitutionally boring it makes actuaries look flamboyant, wrote in its annual report that leverage does not disappear by being out of sight. They meant the hyperscalers. They also meant my kitchen. And the strain is real now, not theoretical. The big five will spend north of $600 billion in capex this year at a capital intensity above 30% of revenue, when the peak of the entire 1990s internet buildout was fifteen. Alphabet went free cash flow negative in Q2 for the first time in its existence and doubled its long term debt to $98 billion in six months. Amazon's long term debt jumped 81% in a single quarter. These are not startups burning venture money. These are the most profitable companies in human history discovering the bond market. It had a name last time. Vendor financing. Lucent did it. Nortel did it. Nortel was once a third of the entire Toronto Stock Exchange and now it's a trivia question. Here's my actual position, and I'm not being cute. The whole structure is a leveraged bet that intelligence stays expensive. That's the collateral. That's the moat. Every few weeks somebody publishes open weights that close half the gap for free, and the moat gets shallower, and the debt does not. Todd doesn't know any of this. Todd is happy. Todd has positive cash flow and a girlfriend and my Wi-Fi password. Anyway, I've got a spare room, a spreadsheet nobody wants to see, and no counterparty left. So it's you now.
Near miss.
"Thankfully last night we had a lot of heavy synchronous rotating generation on the grid at the time in the form of geothermal and hydro generation. This mechanical inertia would have helped to prevent the frequency falling further immediately after the trip.
...The key take away is again that energy may keep the lights on over the course of a winter, but it’s dispatchable power, inertia, and fast frequency response that keep the lights on over the next ten seconds."
it was dark and still.... the only thing that can hold frequency is hydro
as a young elect eng we saw videos of what happens
as freq falls it acts as a brake on the current gen rotational speed, ie the speed of rotation of the turbines bolted into the ground
Any massive braking force here starts exerting itself onto the bolts holding the turbines in place. they are forced to slow.
if the grid does not cut this off fast enough, the turbines will literally snap the bolts holding them in place and walk around the hall... it is not cute and so instead the grid cuts load
Get solar and battery!
And given the Northern Hemisphere situation, wildfire-wise,
Someone could get a conscience.
"This matters because so much of our future energy strategy centres on electrifying transport and industry while simultaneously adding large amounts of wind and solar to supply the generation. ...But on a cold, calm winter evening like last night, they contribute very little firm power when it is needed most.
The quiet hero of the evening was geothermal. It produced dependable base load electricity hour after hour, regardless of the weather. Alongside hydro, it formed the backbone of the system. If we can’t add more hydro, due to geography, then more geothermal is what we need to be building."
We are building more geothermal. There's like 10% More came online this year?
Without solar and wind those hydro lakes would be lower.
Inverter based resources can also support the grid if the regulations are updated to allow it. I think this is what you will see come out of the Iberian blackout, Inverters will be required to support the grid instead of being forced off-line.
this is one to watch a bushfire after 50 years of none - probably nothing
https://www.afr.com/property/residential/economist-forecasts-play-catch…
The speed of Australia’s housing price slump is forcing economists and analysts to review forecasts that in some cases they have only just made, as tax policy changes and higher borrowing costs hit activity and confidence in markets across the country.
Sydney house prices sank 3.3 per cent in the June quarter, the largest quarterly decline at the start of a downturn in more than 30 years of data, Domain said on Wednesday.
The housing downturn is going a lot faster than anticipated. Louie Douvis
“This is the deepest start to a downturn Sydney has ever experienced,” the listing company’s chief economist, Nicola Powell, said.
Domain, which only two months ago forecast a mid-range 5 per cent decline over the year to June 2027 for Sydney houses, now expected a result closer to its worst-case scenario of 7 per cent, Powell said.
“It is realistic to assume from our price forecast range that the deepest drop is likely to materialise,” she said.
Bigger number up, bigger numbers down.
Exponential growth in reverse.
Some 2 bed townhouse 20km from Sydney can't lose its $2 mil value can it?
its fun to watch but I bet their drop is twice as fast as ours as aussie are not as dumb and stupid, first out best dressed
even the RE agents in aussie talking blood bath vs ours denial denial denial
i reckon they fall faster and deeper then NZ but also exit faster, 2030 bring it on
meanwhile Auckland will be full of vendors looking for 2019 prices
aussie economist are revisiting price fall predictions from 3 months ago, i cannot remember NZ economist ever forecasting drops? for the first 20-25% falls, maybe now that AKL has fallen 20% is ANZ forecasting 2% falls
I'd say the media are less reliant on property money also over there and hence less beholden to keep pumping their ponzi as hard as ours did in such desperation on the way down.
P.S how much solar did you go with IT?
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