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 rates are here. And note, you can compare mortgage offers with our new calculator that takes into account other costs and cashback incentives, here.

TERM DEPOSIT/SAVINGS RATE CHANGES
No changes here either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

STILL VERY PATCHY
If you squint, look very hard, and take an optimistic spin, you might be able to see signs of an improvement in retail sales from the August electronic cards data released today. Some might says that conclusion is wishful thinking. If there is an upside, it is very minor at this point but the hope is that it will build. Year on year, the retail component of this data is up +0.9%. But then you need to acknowledge this data is not adjusted for price changes – so the ‘real’ retail activity is likely negative on a volume basis. And it is down from +1.7% in July. It is about now that retail perceptions set up how retailers will respond to the holiday season.

A HOPEFUL GLIMMER DESPITE DISHEARTENING RETREAT
The overall factory PMI slipped back into contraction in August, a ‘disheartening” retreat. But there is hope because new order levels expanded again and to their best level in three years and the consecutive third month of expansion. But all other elements going into the overall PMI are running well below their ling run averages, and because any gains are now off a very low base, we shouldn’t get carried away by any ‘green shoots’.

OUR FISCAL MANAGEMENT PANNED
BMI (a unit of Fitch Solutions) has just published its outlook for New Zealand. They are projecting that our fiscal deficit will get worse. “We expect New Zealand’s public finances to come under moderate pressure in FY2025/26 as the government continues to support households and businesses facing elevated living costs. We project the fiscal deficit to widen to 2.8% of GDP, up from 2.4% in the previous fiscal year.”

NZX50 WEAKER
As at 3pm, the overall NZX50 index was unchanged after giving up earlier gains in its Friday session. It is also little-changed over the past five working days. But it is up +1.2% year-to-date. And it is now up +3.2% from a year ago. Market heavyweight F&P Healthcare is down -0.6% today so far. Gentrack, Mainfreight, Vista Group, and Tower lead the gainers as Spark, Oceania, Infratil, and Vulcan Steel drag.

WINDING DOWN FAST
Financial institution settlement accounts at the RBNZ fell a sharp -$4.5 bln in August to their lowest since March 2021. This is accelerating the reductions and they are now back to the April 2020 levels after peaking at $56.4 bln in December 2022. The Funding for Lending program is also winding down, now at just $5 bln after peaking at $19 bln in November 2022.

COFFEE INFLATION IS BACK
We should probably note that coffee prices are moving back up and are now near their record highs in the February to April period earlier in the year. Climate issues with Brazil’s huge crop are behind the shortages.

SWAP RATES STILL ON HOLD AT SHORT END
Wholesale swap rates are will probably be little-changed today at the one year term but a touch lower for longer durations. 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 2.99% on Thursday. Today, the Australian 10 year bond yield is down -2 bps from yesterday at 4.22%. The China 10 year bond rate is also down -2 bps at 1.80%. The NZ Government 10 year bond rate is down -2 bps from yesterday at 4.30%. The RBNZ data is now all delayed by one business day now, and was down -3 bps at 4.30% at the end of Thursday trade. The UST 10yr yield is down -2 bps from yesterday, now at 4.03%.

EQUITIES MOSTLY HIGHER
The local equity market is little-changed in Friday trade. The ASX200 is up +0.7% in afternoon trade. Tokyo has opened also up +0.7%. Hong Kong up +1.2% with Shanghai unchanged. Singapore has opened down -0.3%. Wall Street ended its Thursday session with the S&P500 up +0.8%.

OIL DROPS
The oil price in the US is down more than -US$1.50 at just under US$62/bbl with the international Brent price just under US$66/bbl.

CARBON PRICE FIRMISH
There are few trades today but the price has ticked up to $58. The next official carbon auction is on December 3, 2025 and likely heading for another failure. See our daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.

GOLD JUST OFF ITS HIGH
In early Asian trade, gold is up +US$15 from this time yesterday at US$3649/oz.

NZD RISES ON USD WEAKNESS
The Kiwi dollar is up +30 bps from this time yesterday, now at 59.7 USc. Against the Aussie we are down -20 bps at 89.6 AUc. Against the euro we are up +20 bps at 50.9 euro cents. This all means the TWI-5 is now at just over 66.9 and up +20 bps from this time yesterday.

BITCOIN RISES AGAIN
The bitcoin price is now at US$115,376 and up +1.3% from this time yesterday. Volatility has been again modest just under +/- 1.2%.

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This soil moisture chart is animated here.

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