What happened on Tuesday, Giant edition

Here are the top things you need to know before you leave work today (or if you already work from home, before you close your laptop).

CHANGES IN MORTGAGE/LOAN RATES
The BNZ cut all fixed rates today, but only to the levels their main rivals had already adopted. All rates are here.

TERM DEPOSIT/SAVINGS RATE CHANGES
No change today. All rates updated less than 1 year are Herefor 1-5 years, I am Here. This review might help.

THE SEA IS MOVING IN FAVOR OF FHB
Our July update a Home Loan Affordability Report shows that first home buyers are now benefiting from the combination of falling house prices and falling interest rates. Now half of all 28 urban areas surveyed allow FHBs to buy a top quartile home with a 10% deposit and a loan involving less than 40% of the service charge. (Repayments at 40% of net salary are the tipping point for a mortgage to be classified as affordable.)

WEAK COMMERCIAL PROPERTY MARKET OUTLOOK
The RBNZ is telling banks to be careful not to lend to the commercial property sector, which is known to be under cyclical stress. “While challenges in the commercial property sector are being managed, concerns could increase if economic conditions worsen. A downturn in the sector could affect construction and employment and increase the default rate, putting further pressure on banks.” they noted. Their analysis found vacancy rates of 20% in Auckland’s secondary office market.

GROWING ACCEPTANCE OF DIGITAL WALLETS AND OPEN BANKING
Pay NZ was topography payment habits and attitudes towards users of the generic payment system. They found that cards are still king (67%) when it comes to making everyday payments – but digital wallets are on the rise (15%). And when it comes to open banking, the number of consumers who enjoy sharing data with a third party has steadily increased – now at 37% of respondents, up from 27% in 2022 and 16% in 2020.

NZX STOCK MARKET UPDATE
See Us new fast update on how the NZX is doing today at 3pm. We welcome comments on this update story. Annual results updates were released today for Vulcan Steel (VSL#29), Vector (VCT#12) and tourist holdings (THL#42)..

MILK PAYMENT ESTIMATES ARE GROWING
ANZ outperformed all other leading analysts with a payout of $9.00/kgMS for milk forecast for the 2024/25 season. Fonterra’s recent rise has only been at a midpoint of $8.50, so the ANZ level is near the top end of Fonterra’s range. If it turns out the way ANZ thinks it will, it would be the second biggest ever (after 2021/22). This is the kind of measure that could change economic sentiment in the country. See all estimates Here.

AND COME TO #6…
Rabobank has RECORDED that Fonterra has become the sixth largest global dairy company in 2024, up from ninth in 2023. That’s half the size of France’s number 1 Lactalis. But Fonterra is almost certain to fall in those ranks as it sells its “non-core” operations, given its recent strategic shift to B2B ingredients and foodservice business. Overall, the entire global sector saw revenues grow by just +0.3% over the past year. Fonterra’s earnings for the current year will be released on September 25, 2024. January’s interim update showed Fonterra’s earnings were -15% lower than the previous year as its divestment program ramped up.

RUSH INFRASTRUCTURE, GROWING +$1.5B PER WEEK
Projects are rapidly being added to the national infrastructure pipeline now. Latest report from the Infrastructure Commission shows that the value of infrastructure projects under development totaled $148 million in June, an increase of over +20% from March. That’s $24 billion more in just 90 days. Almost 60% of these come from projects that are funded, partially funded or have a confirmed source of funding.

Flushed then a rise below the trend
BNZ economist Mike Jones said The current declines in mortgage rates are unlikely to fuel an immediate higher decline in the housing market. But they are likely to prevent a deeper correction, he believes. They don’t expect any house price growth this year, but they see a 7% increase in 2025. And when that happens, home loan rates will rise, perhaps quite quickly.

CONSTRUCTION COSTS ARE INCREASING VERY LITTLE
QV has updated values ​​in its CostBuilder tool. These updates show that the cost of building a new home has now largely stabilized, giving the builder more price certainty than at any time since the start of the pandemic. The cost per m2 increased by only +0.2% in the last quarter. The changes mean that construction cost estimates should be a much better indication of actual construction costs.

BNZ fulfills the SECOND OPEN BANKING API REQUIREMENT
The BNZ says it is the first bank to implement the second Open Banking Application Programming Interface (API) required this year by its minimum implementation plan set for the big four banks by Bank-owned Payments NZ. This second API standard is “the piece of the technology puzzle that means our customers have full control over the data they share, who they share it with and, importantly, gives them the control to stop sharing their data”, says BNZ. Around 250,000 BNZ customers are said to use services made possible by this technology, including services from Xero, Volley and Blinkpay, which connect to BNZ via secure APIs.

TSB FINED $2.47 MILLION FOR CCCFA VIOLATION
TSB was fined $2.47 million in the High Court for breaching the Consumer Credit and Finance Contracts Act in relation to fees set out in its standard contracts without referring to the requirements of the Act. In a case brought by the Commerce Commission, TSB admitted the overload approximately 42,000 customers with approximately $3.6 million that self-reported the problem to the Commission. Client remediation has taken place.

DEBIT SEARCH BANK REGISTRATION
Fintech Debut says it is applying to the Reserve Bank to become a registered bank with the aim of becoming “the first locally owned bank designed for an open banking environment and artificial intelligence (AI). In what it claims is a first, Debut says it currently applies a universal interest rate of 5.10% per annum on both transactions and savings accounts, with no penalties, lock-ins or minimum deposit requirements. Debut says it has about 7,000 people on its waiting list for early access to its app.

MODEST PROFIT GROWTH
China said profits at the largest industrial firms (mostly SOEs) rose +3.6% in the first seven months of 2024. This was little changed from June. They increased by +4.1% in July compared to the same month last year. That they are still generally profitable is a good sign and they are not getting any worse.

SWAP PRICES STILL CHANGED LITTLE
Wholesale swap rates they are probably slightly changed again today, perhaps with a touch of firmness. Our chart the final positions will be recorded below. The 90-day bank bill rate is unchanged at 5.22%. The Australian 10-year bond yield rose +1bp to 3.93%. China’s 10-year bond rate rose +1bp to 2.17%. The NZ Govt 10-year bond rate fell -1bp to 4.26% and the RBNZ’s previous peg was at 4.18% and down -1bp from yesterday. The 10-year UST yield was down -2bps from yesterday at 3.79%. Their 2 year is now at 3.90%, so the curve has now tightened, inverted by only -11 bps.

ALL SOFT ACTIONS
The NZX50 was down -0.5% in late Tuesday trade. The ASX200 is unchanged in afternoon trade. Tokyo opened with a minor -0.1%. And Hong Kong was down -0.2% at the open. Shanghai fell -0.3%. Singapore fell -0.4%. Wall Street ended Monday trading down -0.3%.

OIL
Oil prices are up almost +$2 from yesterday to just under $77/bbl in the US and just over $80/bbl for international Brent.

THE PRICE OF CARBON HOLDS
Today, the carbon price is unchanged today at $60.50/NZU. See our new daily chart tracker of the NZU carbon price, courtesy of emsTradepoint.

KEEPING GOLD IN RANGE
In early Asian trade, gold was down -$3 from this time yesterday at $2509/oz.

NZD SOFT
The Kiwi dollar is down -10bps from this time yesterday, now at USc62.1. Against the Aussie we are also down -10bps at AUc 91.6. But against the euro we are still at 55.6 euro cents. All of this means that the TWI-5 is now at 69.7 and marginally lower again.

BITCOIN ENCODES GAME
The price of bitcoin is down -1.6% since this time yesterday, now at $62,986. Volatility over the past 24 hours has been modest at just +/- 1.2%.

This soil moisture chart is animated here.

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