What happened Friday

Economy / news

A review of things you need to know before you sign off on Friday; no retail rate changes but big wholesale increases, truckometer declines, factory PMI stays positive, wool prices lift, Japanese PPI jumps, swaps jump, NZD lower, & more

11th Sep 26, 3:59pm by David Chaston

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
No changes to report 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
SBS Bank has made two minor tweak hikes to their 12 and 18 month rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

THE BOND MARKET IS GROWLING
There is severe upward pressure on global interest rates today. This is an interim review about mid-day. There are more updates in the items below. (Financial markets are essentially reacting negatively to incompetent American fiscal management which prioritises short-term sugar hits over proper long term responsibilities.)

HARDER TO MOVE UP THE PROPERTY LADDER

Sliding house prices likely reducing existing homeowners' equity - making it more difficult for them to move up to a more expensive home.

WEAK SIGNALS
The August ANZ truckometer is flashing declining signals. The Light Traffic Index fell -1.2% in August and is down -0.7% compared to a year ago. The Heavy Traffic Index fell -2.2% in the month as the lift off the winter low was smaller than normal, but it is still up +1.3% from a year ago.

THE EXPANSION CONTINUES
Although it dipped in August from July, the BNZ/BusinessNZ factory PMI was still positive, extending its positive run to 14 consecutive months. BNZ noted that the manufacturing industry expansion appears to be broadening despite the lower headline number. Every component rose again, except employment.

BETTER SIGNALS
As you may know by now, Stats NZ is getting ready to produce the CPI monthly, rather than quarterly. The preparation for thei change involves different ways of collecting the data, and much work on this sample collecting is either underway or completed and is in testing. Recently Stats NZ briefed the RBNZ on their change work, and you can see the briefing paper here.

NZX50 ENDS THE WEEK WEAK
As at 3pm, the overall NZX50 index is down -0.6% today. It is down -2.4% for the past 5 trading sessions. But it is up +2.6% from six months ago. From a year ago it is now up only +3.1%. Market heavyweight F&P Healthcare is down -1.6% so far today. There are 38 gainers led by Briscoes, The Warehouse, Kiwi Property, and Mercury. There have been 45 decliners led by Gentrack, Vulcan Steel, F&P Healthcare, and Spark

BACK IN AN UP TREND
Wool prices have lifted again, with PGG Wrightson's strong wool indicator up +20c. Restricted auction volumes, largely resulting from adverse weather conditions across much of the country, generated strong competition at the most recent sales resulting in favourable outcomes for sellers across all wool categories. Australian wool exporters were again well represented and active across all fine wool styles.

A MIXED PICTURE
Meanwhile, beef and lamb demand is struggling. Silver Fern Farms reports that global beef markets continue to send mixed signals. While China, the UK and parts of the Middle East are providing support, the US market remains the key concern. Uncertainty around additional tariff-free import volumes and subdued buyer activity is what they see. Sheepmeat demand in China remains steady but cautious ahead of the Mid-Autumn Festival. Market sentiment in Europe remains subdued. Market conditions in the Middle East remain constrained by ongoing logistics disruptions and fragile customer confidence. In North America, chilled lamb demand has continued to strengthen. However, seasonality, livestock availability and existing commitments constrain our ability to supply. Conditions in the UK have weakened further.

COUNTDOWNS
There are now 104 days until Christmas, 72 of them working days. There are now 40 calendar days to endure until the general election.

RISING AT A HEADY PACE
Japanese producer prices rose +7.6% in August from a year ago, following an upwardly revised +7.7% increase in the prior month, which had been the fastest pace since February 2023. Although fuel is a big part of these rises it is the only part, and the outsized rises have been consistent now in each month since April. Despite that, Japanese business sentiment rose to its highest level since 2021.

BIRD FLU UPDATE
Bird flu is still spreading in Australia, based on reported 'events'. Reporting by NZ MPI seems to have gone off the radar.

SWAPS JUMP
Wholesale swap rates will likely be much higher today on a growing bond sell-off. Keep an eye on our chart below which will record the final positions closer to 5pm. The RBNZ 90 day rate was up +1 bp at 3.06% on Thursday. Today, the Australian 10 year bond yield is up another outsized +9 bps at 5.37% and a new high since 2011. The China 10 year bond rate is little-changed at 1.68%. The Japanese 10 year bond is up +6 bps at 2.99% and a new 30 year high. The NZ Government 10 year bond rate is now at 5.05% and up +14 bps from yesterday at this time and its highest since 2023. (The RBNZ 10 year rate is 'prior day' and was up +9 bps to 4.88% on Thursday.) And the UST 10yr yield is now at 4.98%, and up +13 bps from this time yesterday. That is now above the brief 2023 spike, and is now its highest since 2007..

EQUITIES LOWER
The NZX50 is now down -0.7% from yesterday's close. The ASX200 has opened down -1.3%. Tokyo has opened down -2.8%. The KOSPI has retreated -2.5% at its open today. Hong Kong has opened down -1.1% while Shanghai is down -1.8% at its open. Singapore is down -0.3% in early Friday trade today. Wall Street was lower by -0.6% on the S&P500 and the Nasdaq was down -0.7%..

OIL PRICES HIGHER
American oil prices are higher from this time yesterday with the WTI benchmark up US$7 to just over US$103/bbl, while the international Brent price is up the same at just on US$108/bbl.

CARBON PRICE UNCHANGED
There have very few trades reported so far today. The price has held at $49.90/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD LOWER
In early Asian trade, gold is down -US$92/oz from yesterday, now at US$4323/oz. Silver is down -US$3 at US$63.50/oz.

NZD LOWER
The Kiwi dollar is down -40 bps from this time yesterday, now at 58.1 USc. Against the Aussie we are up +30 bps at 81.3 AUc. Against the euro we down -20 bps at 50.1 euro cents. This all means the TWI-5 is now just on 61.5 and down -20 bps from yesterday.

BITCOIN LOWER
The bitcoin price is now at US$76,863 and down -1.9% from yesterday at this time. Volatility has been modest, at just on +/- 1.3%.

HOW THE GLOBAL ECONOMIC FORCES AFFECT US
If you want to catch up on what happened last night, try our Economy Watch podcast, here.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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25 Comments

by Independent_Observer | 11th Sep 26, 5:01pm 1789102908

Mortgage rates likely to head higher in the coming weeks. The higher for longer (HFL) arguments (for and against) can recommence.

As I’ve said before, I’d be highly surprised if we ever see interest rates close to zero again in our lifetimes. But we can tell our ancestors in the decades to come that we lived through that period of mania (and the people who lost their minds..souls…under the prospect of capital gains and increased short term financial wealth - and those who were sucked in by vested interests and FOMO to buy during the frenzy).

by JimboJones | 11th Sep 26, 5:11pm 1789103476

I can definitely see it happening again if economies collapse. There is only so long we will continue the fight against inflation before we vote someone in to throw the rules away. The US are already trying it with Trump.

Lets hope that isn't the outcome for NZ.

by Bubbles1972 | 11th Sep 26, 5:36pm 1789105011

That depends on 'why' economies collapse? Chances are it's something that another lollie scramble can't fix.

by Phoenix (FKA JC) | 11th Sep 26, 5:27pm 1789104447

As I’ve said before, I’d be highly surprised if we ever see interest rates close to zero again in our lifetimes.

When I worked in corporate Japan, banks would often hustle us for business such as mortgage lending. Even though the cash rate in Japan was as close to zero you could find in the developed world, mortgage lending rates were still around 3-4%. One of the interesting things I discovered that for married borrowers, the mortgage rates often included insurance so if the main breadwinner died, the remaining mortgage owed would be largely paid off.

by Foxglove | 11th Sep 26, 5:40pm 1789105231

A right royal incentivised pit for uxoricide and/or mariticide then?

by Phoenix (FKA JC) | 11th Sep 26, 5:32pm 1789104753

Financial fraud in Aussie is off the charts. Never a dull day at the moment. Strike Force Myddleton has just busted one of the largest alleged financial-fraud syndicates in Aussie history - AUD600 million in fraudulent loans.

The fraud began with financing applications for luxury “ghost cars”: loans for vehicles that allegedly did not exist, using stolen identity information. Investigators subsequently alleged the activity expanded into fraudulent personal, business and residential-property lending applications across Australian financial institutions.

All stolen from the "safest banks in the world."

https://www.abc.net.au/news/2026-09-10/nsw-alleged-crime-syndicate-600-…

by KKNZ2025 | 11th Sep 26, 5:43pm 1789105408

Amateurs...Politicians are professionals

https://www.abc.net.au/news/2026-09-11/everybody-pork-barrels-sometimes/107137470

by Let me be Frank | 11th Sep 26, 5:50pm 1789105838

Cui bono?

by Colin Maxwell | 11th Sep 26, 6:01pm 1789106493

My word, the US-10yr, as near as damn is to swearing to 5%.

The Real-Asset Realignment: The Collapse of the Paper Illusion

The acceleration of the US 10-Year Treasury yield much past 5% is the ultimate technical tripwire. As such I see todays rate of ~4.9% as a blaring FIRE (Financial Insurance Real Estate) siren.

At these levels, mortgage rates hitting 9%–10% will freeze the housing market, while skyrocketing corporate refinancing costs trigger defaults and systemic recession.

To prevent total insolvency, dah Fed will have no choice but to print trillions of new fiat tokens to monetise the debt, exploding the remaining illusion of fiat credibility and sparking a definitive capital flight.

However, I don't foresee this capital fleeing into a rigid, gold-only bottleneck.

Instead, global trade and settlement are actively shifting Eastward toward a multilateral framework, backed by a basket of roughly 20 durable and essential commodities (energy, industrial metals, grains, etc) but also into currencies of trusted trading partners who are moving closer to a hard-backed model.

Within this resource-based architecture, gold transforms from an unworkable solo currency anchor into the supreme sovereign ledger, and the ultimate zero-counterparty risk asset, used to settle out international trade balances.

As physical demand completely decouples from 55 years of leveraged Western paper fixing, the true, hidden plunge in fiat purchasing power will be exposed.

In this scenario, gold will not merely rally - it will undergo a violent, geometric adjustment to its honest present-day valuation which could be north of U$40,000, serving the role of the apex asset, in a completely realigned, hard-backed global economy.

by Let me be Frank | 11th Sep 26, 6:06pm 1789106819

An annual return of 5% over the long term means diddly squat if those tokens can buy sweet FA...what will be the US' (or anyones) output in 30 years?

It is a bet that they can maintain purchasing power in the near term....the future is discounted.

by Colin Maxwell | 11th Sep 26, 6:20pm 1789107619

Its worse than "diddly squat", Frank - you get walloped with negative real returns on the coupon, and then lose most of your principal, in terms of purchasing power, at redemption.

The bond-con is one of the most obscene aspects of the fiat-Ponzi wealth heist.

by Let me be Frank | 11th Sep 26, 6:31pm 1789108267

The bond con though was only a con in the second half....that is important to understand

by Colin Maxwell | 11th Sep 26, 6:49pm 1789109351

Yes, agreed, Frank — the "second half" is essentially the 55 years since 1971 when all the existing currencies essentially became fiat tokens - point taken.

In an environment of negligible inflation, or even (heaven forbid :-) deflation, bonds could genuinely double as both a safe haven for savings, and a way of supporting your own country.

The problem arises when the monetary system shifts from that stable environment into one of persistent monetary debasement and inflation, and the maths no longer works any longer.

by Phoenix (FKA JC) | 11th Sep 26, 6:41pm 1789108898

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.”
- Alan Greenspan (2011)

https://www.cnbc.com/2011/08/07/no-chance-of-default-us-can-print-money…

by Colin Maxwell | 11th Sep 26, 8:17pm 1789114677

Phoenix, thanks for supplying the perfect quote from Greenspan, because it rather neatly illustrates the intellectual problem at the heart of the entire debacle.

Greenspan was technically correct in the narrowest possible sense - yes, the US can always create the dollars required to meet a dollar-denominated obligation, but that doesn't mean the debt can be honoured without consequence. It simply shifts the adjustment from an explicit default onto the purchasing power of the currency.

In fact, I would argue Greenspan is the quintessential architect of the mentality that has helped get the US into today's debt-doom-loop - ie, if you can always print the money, then the debt constraint apparently disappears.

Except it doesn't. The constraint merely migrates from solvency to purchasing power, interest costs, capital allocation and eventually confidence in the currency itself.

And here we are, a gnats breath away from that right now.

So Greenspan's "zero probability of default" isn't really the reassurance he appears to think it is. If your solution to an ever-growing debt problem is "don't worry, we can always print the currency in which the debt is denominated", you've solved the nominal problem while potentially making the real problem considerably worse.

That's not monetary genius. It's how you end up in the debt-doom-loop in the first place.

As a former Central Banker in Ireland, David McWilliams... paraphrased...

"Look, most of us think that central bankers know the heck what we are doing, and that we have control over everything - however, most of our job entails kicking the can down the road so that we are not the ones holding on to it, when it all blows up in our faces."

by JimboJones | 11th Sep 26, 8:05pm 1789113958

I keep arguing that same very obvious point. Sure you can print as much as you like, but what you're printing will be worth much less.

This is economics 101, you can't print your way to wealth, even if you are the USA.

by Phoenix (FKA JC) | 11th Sep 26, 8:33pm 1789115596

Sure you can print as much as you like, but what you're printing will be worth much less.

People don't really understand what "money printing" is. Nor do they understand what QE is.

That's why people talk about Japan and don't understand that their broad money growth is much lower than in the Anglosphere.

by interesting1234 | 14th Sep 26, 10:35am 1789338933

A currency is only as valuable ion the faith people have in it to retain it's purchasing power. A good example being Argentina using USD as an unofficial second currency for decades given the rampant inflation they have seen in their own peso. It was a bizarre realisation last I was there when the supermarket cashiers asked for dollars as a preference for payment when I pulled out pesos for payment.

by KKNZ2025 | 11th Sep 26, 7:28pm 1789111683

Been there done that...

https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic

by KKNZ2025 | 11th Sep 26, 6:45pm 1789109149

"Analyst warns of 'late-stage bubble' as bond interest rates and oil prices surge"

https://www.abc.net.au/news/2026-09-11/rising-oil-prices-bond-yields-falling-shares/107142006

by tis i | 11th Sep 26, 8:38pm 1789115887

Wow. 19 posts and no PDK end of times. Remarkable.

by The Person | 11th Sep 26, 10:22pm 1789122174

With global beef prices sitting at record highs all year, how come our farmers are suffering? All you hear in the news is how expensive beef is. Aussie exporting record amounts

https://www.beefcentral.com/live-export/live-export-cattle-shipments-an…
https://tradingeconomics.com/commodity/beef

by JimboJones | 12th Sep 26, 7:02am 1789153322

Not the first time that farmers are creaming it yet the country is doing badly. I feel like farmers make property investors look overtaxed.

by Palmtree08 | 13th Sep 26, 1:47pm 1789264056

How so Jimbo? CGT? The return on assets employed is so low only the most dedicated bother. Without farmers I guess the average urbanite could always forage in public parks?

by Marcus Traddles | 12th Sep 26, 9:35am 1789162525

Reading all the comments below, what does it all mean for the NZ economy? I am thinking house prices, inflation and the NZ$.

On the housing market I do wonder what is going on. Whatever area I look at on a housing search a good deal (around 20% +) are empty and/or entitled 'Must Sell/Huge price drop/Vendors have moved.

Then one sees the house has been on the market for many, many months.

From what I see there are: those who have left and are hoping to sell an empty house; those who bought in 2020-2022 and know they will make a loss; those who bought 2020-2022 and expect more, those who bought long ago and will gain...but not as much as they would like.

They say a crash occurs only when forced sales become widespread. I remember in the UK someone on a local street sold for a 30% discount (they had to sell), and that did it for that street and area. The first house we bought was priced 35% below the pre-crash price. The agents noted - that is how it works, a crash enable first time buyers like you access to housing. Most we now know, all now retired or close to, bought at the time, they all benefitted from that crash.