What happened Monday

Economy / news

A review of things you need to know before you sign off on Monday; only minor TD rate changes again, service sector stunted, migration up from lows, tourism nears full recovery, farmer profitability strong, swaps flat, NZX down, NZD lower & more

14th 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
Kiwibank has made two minor tweak hikes to their 6 and 12 month rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

VERY MIXED
The latest service sector PSI for August is very mixed for a tame net gain. The expansion is modest, based on rising new orders, but the detail is troubling with most other components not growing much or retreating. Among the industries covered, there is weakness in retail, wholesale, property, and hospitality. Gains are in transport, communications, finance, and the health sector.

MIGRATION TURNS UP FROM LOW LEVELS TO MODEST LEVELS
There was a net migration gain of +20,350 people in the 12 months to July which is more than double the +9592 in the same 12 months last year, but less than half the long-term average.

VISITOR NUMBERS RISE
Annual short-term visitors were 256,600 in July, and have increased to 3.7 million in the July year. Despite the global tensions, demand for NZ tourism and a weaker NZD has been supporting the local economy. More than 64% of the monthly increase in tourist arrivals is accounted for by Australian (+8,000 to a record 134,900) and Chinese (+5,400) visitors. July 2026 arrivals amounted to 100% of pre-pandemic (July 2019) levels, the first month showing a full recovery from the pandemic. Arrivals over the year to July 2026 amounted to 95% of pre-pandemic, with full recovery on an annual basis potentially a year or more away, as the rate of recovery has slowed in 2026.

JAM TODAY, GRUEL TOMORROW
An updated Federated Farmers confidence survey of their members shows 'an incredibly positive result' around farm profitability, but with more of them not expecting it to last with nearly 30% of farmers expecting conditions to worsen.

SUPPLY-INDUCED RISE
Rabobank sees greater support to global dairy commodity prices and upside potential for the New Zealand farmgate milk price, and has raised its new season forecast to $10/kfMS, the highest of any dairy analyst at this time, and above Fonterra's current $9.25/kgMS.

LOOKING FOR HIGHER LOCAL CONSUMPTION
The avocado industry is looking ahead to a record season. Almost eight million trays are expected to enter domestic and export markets in 2026-27, worth around $160 mln at wholesale. They also point out that if local consumption from the current 3kg per person rises to Australia’s 4.7kg, it could grow the domestic market from about $60 mln to more than $90 mln annually.

LOW GROCERY INFLATION
The pace of supplier cost increases to Foodstuffs supermarkets in August was in-line with the result from last month, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average +1.9% increase in what suppliers charged in August 2026, compared with a year earlier.

NZX50 TURNS UP
As at 3pm, the overall NZX50 index is up +0.6% today. It is down -2.1% for the past 5 trading sessions. But it is up +3.7% from six months ago. From a year ago it is now up only +3.4%. Market heavyweight F&P Healthcare is up +0.8% so far today. a2 Milk, Summerset, Napier Port and Sanford are gainers while Briscoes, Oceania, Vital Healthcare and Serko fall.

SWAPS HOLD SOFT
Wholesale swap rates will likely be little-changed-to-a-little-softer today. Keep an eye on our chart below which will record the final positions closer to 5pm. The RBNZ 90 day rate was up +3 bps at 3.09% on Friday. Today, the Australian 10 year bond yield has settles a minor -1 bp to 5.36%. The China 10 year bond rate is little-changed at 1.68%. The Japanese 10 year bond is down -1 bp at 2.98%. The NZ Government 10 year bond rate is now at 5.04% and down -2 bps from thsi morning. (The RBNZ 10 year rate is 'prior day' and was up +15 bps to 5.03% on Friday.) And the UST 10yr yield is now at 4.98%, and unchanged from this morning..

EQUITIES MIXED BUT FIRMISH
The NZX50 is now up +0.6% from Friday's close. The ASX200 has opened little-changed. Tokyo has opened down -0.8%. The KOSPI has retreated another full -2.0% at its open today. Hong Kong has opened up +0.2% while Shanghai is up +0.1% at its open. Singapore is also up just +0.1% in early Monday trade today. Wall Street futures suggest the S&P500 will open up +0.5% when trading resumes tomorrow.

OIL PRICES RISE
American oil prices are higher from this morning with the WTI benchmark up US$3 to just under US$103/bbl, while the international Brent price is up the same at just on US$107.50/bbl.

CARBON PRICE HOLDS
There have been some reasonable trades reported so far today. The price has held at $49/NZU. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD SOFTISH
In early Asian trade, gold is down -US$15/oz from this morning's open, now at US$4335/oz. Silver is down -50 USc at US$64/oz.

NZD LOWER
The Kiwi dollar is down -20 bps from this time morning, now at 57.9 USc. Against the Aussie we are down -20 bps at 80.9 AUc. Against the euro we down -10 bps at just under 50 euro cents. This all means the TWI-5 is now just on 61.2 and down -20 bps from thsi morning.

BITCOIN LITTLE-CHANGED
The bitcoin price is now at US$77,761 and up +0.6% from this morning. Volatility has been low, at just on +/- 0.8%.

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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13 Comments

by Phoenix (FKA JC) | 14th Sep 26, 4:58pm 1789361884

Quite possible the AI apocalypse has started. Cautious and dystopic announcements from Anthropic CEO Dario Amodei and researcher Jacob Coxon seem to have put everyone on edge. SK Hynx and Kioxia down sharply today and futures on IREN already down 4%+.

Could be Black Monday tonight.

Looking forward.Either the US govt assumes Anthropic, OpenAi roles as buyers of compute.

The Fed prints money to bail out insurers who hold AI debt that went bad because there was no longer a buyer of compute.

Either option requires money printing.

by KKNZ2025 | 14th Sep 26, 5:02pm 1789362174

Even Musk backed the Anthropic warnings

...Trump said no worries "whoever wins AI, wins."

https://www.bbc.com/news/articles/c7v48vp31mdo

by powerdownkiwi | 14th Sep 26, 5:27pm 1789363639

The end-game was always obvious - these people are smart but incredibly dumb.

And where we should be getting warning journalism - we get lightweight fluff.

by Phoenix (FKA JC) | 14th Sep 26, 6:02pm 1789365739

Wendy’s is making service improvements part of a broader strategic overhaul. Chief Executive Bob Wright is also reviewing the company’s trials of artificial intelligence in drive-throughs to determine whether it is serving customers and restaurant operators.

“The best service experiences feel natural to the customer,” Wright said.

https://www.wsj.com/business/hospitality/americas-fast-food-chains-are-…

by Let me be Frank | 15th Sep 26, 7:15am 1789413328

"Either option requires money printing."

Correction...requires 'more' money printing.

There is no shortage of money (promises are limitless, keeping them a different story)....unfortunately money is pretty useless.

by Phoenix (FKA JC) | 14th Sep 26, 6:29pm 1789367394

I have cheerleaded how the likes of Revolut for challenging the banks. Revolut received a request for information disguised as a legitimate government agency request. The request originated from an unauthorized email account created directly within an official government authority's domain infrastructure. The communication carried genuine domain authentication credentials leading Revolut to fulfill the request under the reasonable belief that it was an authentic government agency request.

According to notifications reviewed by reporters, the data potentially included:

Names, dates of birth, home and email addresses, and phone numbers
Passport or driver’s-licence copies
Verification selfies
Account statements and transaction histories, potentially including crypto/Bitcoin activity

The threat actors who targeted Revolut with information-demand emails are now posting sensitive customer data online, including that of high-profile clients such as tennis player Shevchenko.

https://finance.yahoo.com/technology/articles/revolut-confirms-customer…

by KKNZ2025 | 14th Sep 26, 7:17pm 1789370252

So, Revolut passed on its clients private details simply on an email request rather than a legal requirement?, something far short of a contempt of court conviction & gaol sentence

Snowflakes. They dont deserve the business.

by Colin Maxwell | 14th Sep 26, 10:34pm 1789382043

The Miracle of the 1.9% Loaf: How Economic Metrics Gaslight Main Street

"The pace of supplier cost increases to Foodstuffs supermarkets in August was in-line with the result from last month, with the Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index (GSCI) showing an average +1.9% increase in what suppliers charged in August 2026, compared with a year earlier."

Try pulling the other one, GSCI. It has jingle bells on it.

Our grocery bill in the Kerikeri area has gone up far more than 20% over that time frame. We have the proof right in front of us: their magically disappearing, fax-printed cash register receipts, scanned and hard-copied onto A4 paper to prove that these corporate numbers are complete shite.

Welcome to the magical world of macroeconomic indexing, a mystical realm where food price increases have slowed to a polite, practically unnoticeable 1.9%. If you just walked out of a New Zealand supermarket with your usual basic groceries, along with a receipt resembling a mortgage repayment, do not trust your lying eyes. The spreadsheets say you are doing just fine.

The Great Checkout Illusion

The GSCI operates on a level of statistical abstraction so pure it has morphed into farcical black comedy. It doesn't measure what we actually pay at the checkout in Kerikeri. Instead, it measures what a multi-billion-dollar supermarket cooperative pays its wholesale suppliers before slapping on freight, fuel adjustments, franchise markups, and its hefty duopoly profit.

It is the economic equivalent of a meteorologist standing inside an air-conditioned bunker, looking at a computer model, and declaring it a mild 21 degrees while your roof is actively being blown off by a cyclone.

This metric-induced gaslighting relies on two time-honoured corporate tricks:

The Amnesia Pivot: When a report proudly declares supplier costs have slowed to 1.9%, it relies on consumers forgetting that this 1.9% is piled squarely on top of the cumulative, compounding 20% to 30% price hikes endured over the previous few years. The fire isn't out; it’s just running out of things to incinerate.

The "Average" Illusion: If the wholesale cost of luxury French triple-cream brie drops by 10% because nobody can afford it, and the wholesale cost of broccoli jumps by 40% because of bad weather, the index merges them together and tells us everything is perfectly fine and dandy. I mean, do we really need to get all bitter and twisted over a paltry 1.9%?

The View from Main Street

Main Street sees right through this charade because it operates in the real world of hard cash, not corporate spreadsheets.

While the technocrats celebrate a beautifully flat line on a chart, Kiwi parents are left scratching their heads as to how they are even going to be able to continue to put food on the table.

It's time to stop letting corporate indexes pull the wool over our eyes - the hard-copy receipts don't lie.

by Phoenix (FKA JC) | 14th Sep 26, 6:56pm 1789369013

Love it. Well-paid bank economists sitting at their desks hunched over keyboards don't really understand inflation through lived experience of the independent shoppers of the aggregate.

And everything in Kerikeri tends to be more expensive compared to Pak n Save Whangarei and Kaitaia.

by LouB | 14th Sep 26, 7:33pm 1789371207

The key element in that announcement is that is movement in supplier sell/buy prices, not retail prices.

Stacking supplier price increase beside retail price increases would I suspect, illustrate how the concentrated market power of the supermarket is hammering suppliers and elevating retail margin.

by Phoenix (FKA JC) | 14th Sep 26, 8:29pm 1789374545

The key element in that announcement is that is movement in supplier sell/buy prices, not retail prices.

Ponzinomics pushes costs up across the supply chains, mainly through land prices and taking credit from productive enterprise and stifling competition. Aotearoa / Aussie do not have the mkt size and efficiencies in grocery to counter the Ponzi.

concentrated market power of the supermarket is hammering suppliers and elevating retail margin.

Aotearoa supermarket margins are not that much different from the U.S.

Also,
Kroger's revenue has risen directly in-line with their expenses up to 2022, and at a slower pace than the growth of money supply (38% in the prior 5 yrs to 2022). Kroger's profit margins have averaged 1.43% annually since 1990;

by LouB | 15th Sep 26, 8:51am 1789419088

Who or what is Krogers? Ahh US supermarket chain.

With supermarkets few, centralised distribution centres model, reliance on longhaul transport expands and so adds cost. E.g. the ludicrous situation of Otago apricots shipped to the Christchurch distribution centre the shipped back to Alexandra, Cromwell or Queenstown, and marketed as locally grown.

Consumers just have to suck up that additional cost. And I'll bet my bottom dollar suppliers, particularly of fresh produce, are being screwed to offset that cost too.

by Let me be Frank | 15th Sep 26, 7:05am 1789412723

Ever more.