Here are the key things you need to know before you leave work today.
TODAY’S MORTGAGE RATE CHANGES
ANZ and ASB both cut rates today, with the ASB reductions being the most interesting in that they will press their main rivals to respond, one would think. And late in the day, the Cooperative Bank came out with more cuts to their 12 and 18 month fixed rates.
TODAY’S DEPOSIT RATE CHANGES
SBS Bank and the Nelson Building Society both cut some term deposit rates.
The big news you may have missed is that China today lowered is Yuan Reference Rate by a record 1.85%. That move is pushing around world cross rates. The Kiwi dollar slipped -70 bps when it was announced vs the greenback, and against the euro, but is little changed against the Aussie. Just a reminder that the Yuan is not a free floating currency with levels set by the market; rather one where rates that are uncomfortable to Beijing are manipulated based on their vast reserves to back them up. Policy risk is high in that currency.
ANZ Truckometer report came out today with the headline “Flat Tyre”. The Heavy Traffic Index fell -0.3% in July, and is down -0.2% in on a 3 month/3 month basis (seasonally adjusted). It has now receded six months out of the last seven; a clear slowdown is apparent. They say this shows an economy facing strengthening headwinds. Fair enough. But it rather seems to signify a deceleration and hardly seems to justify the “Flat Tyre” tag. What will they say when the signaled slowdown actually arrives?
RETAIL STRENGTH SURPRISES
The value of core electronic card transactions rose a seasonally adjusted +0.5% in July to sit +6.6% higher than a year earlier. The July increase was a stronger start to the September quarter than expected, given the deterioration of consumer confidence in recent months.
RETAIL WORKER UNREST
It seems bargain prices can’t support the Living Wage. Workers at two more Warehouse stores have voted to strike, following similar action at other stores in the chain. Given that ex-ceo and still major shareholder Steven Tindall is the current face of ‘compassionate’ and ‘sustainable’ investing, and the company has touted its Career Retailer Wage as ‘leading edge’, all this comes across as quite embarrassing.
ANZ’s monthly Inflation Gauge posted a +0.3% increase in July which was the highest monthly rise since February, although typical for the month of July. “Upward contributions were housing-centric, led by rises in local authority rates (seasonal), construction costs and rents, offsetting lower vehicle licensing fees. Prices from our Underlying Ex-housing Gauge were flat in July, and were down slightly in the three months to July.”
WHOLESALE RATES FLATTER
Swap rates are basically unchanged today. But the 90 day bank bill rate is down again, today by another -3 bps to 2.97%. That is starting to price in part of a second additional OCR cut.
NZ DOLLAR HOLDS
The NZ dollar is currently at 65.5 USc, at 89.4 AUc, and at 59.6 euro cents. The TWI is at 70.4. Check our real-time charts here.
You can now see an animation of this chart. Click on it, or click here.