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
No changes here today either. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.

HOUSING SUPPLY TIGHTENS
New build homes being completed in Auckland were down -31% from the 2024 peak in June and back to near a four year low.

HOLDING HIGH
Business confidence fell 2 points in August to 54, while expected own activity eased 1 point to 48. Both remain at very high levels. Inflation indicators were mixed. Inflation expectations lifted from 3.14% to 3.26%, and more firms are expecting cost increases and to raise their own prices. But the size of expected cost increases is getting smaller.

NZIER’S SHADOW BOARD IN FAVOUR OF OCR HIKE
Over half of the NZIER’s Monetary Shadow Board nine members have recommended that the Reserve Bank (RBNZ) raise the Official Cash Rate (OCR) by 25 basis points on Wednesday. The Shadow Board, which is independent of the RBNZ, said raising the OCR from 2.5% to 2.75% reflects the view that the OCR needs to continue on its path of returning to neutral levels, given that inflation remains high (annual inflation came in at 4.1% in the June quarter). Across the Shadow Board member vote for the September meeting, BNZ head of research Stephen Topliss, BusinessNZ chief economist John Pask, Westpac NZ chief economist Kelly Eckhold, Victoria University emeritus professor Viv Hall and Sharesies co-CEO Brooke Roberts supported the OCR being raised to 2.75%. Kiwibank chief economist Jarrod Kerr, University of Otago associate professor Dennis Wesselbaum and Boffa Miskell CEO Kerry Gupwell thought the OCR should be held at 2.5%. Shadow Board member and former RBNZ Chairman Arthur Grimes provided no specific comment in the release from NZIER.

CANCELLED
Bowing to competitive political pressure, the Government has now formally cancelled the 12c/L fuel excise hike planned for next year. The road transport industry is not happy with what they expect will be deferred highway maintenance.

RISING AT THE INTEREST RATE
Housing debt rose +$1.4 bln in July from June, up +5.6% from a year ago. Just saying, but 5.6% is about the average interest rate on new and refixed home loans recently, and a cynic might say this is the main driver of housing debt growth. Business debt grew +4.4% and unremarkable over the past year. But rural debt rose +2.4% in July from a year ago, its second fastest expansion since September 2019. More than two thirds of the rural debt growth is by borrowers in the dairy industry.

MORE IN LARGE TDs
Household term deposits rose almost +$1.5 bln again in July from June, the fourth straight month of gains at this level or more. This month they were joined by strong company TD rises as well. (+$1.3 bln) but this only restored the unusual June dip. Transaction account balances were stable-to positive, savings account balances recorded the same minor rise. A third of all household term deposits (by value) are those between $250,000 and $1 mln. One in seven are between $1 mln and $5 mln. And a marginally smaller proportion (one in 7.4) are in the $50,000 to $100,000 range. One in eight are in the $10,000 to $50,000 band.

ELECTION PRESSURE STRIKE
Almost 10,000 public service workers will go on strike on Tuesday over bargaining for their respective collective agreements, including those working at the Department of Internal Affairs (DIA), the National Emergency Management Agency (NEMA), and the Ministry for Ethnic Communities (MEC); the Ministry of Business, Innovation and Employment (MBIE); and the Ministry of Social Development (MSD).

‘VERY CONCERNED’ ABOUT THE POLITICAL ENVIRONMENT
An ASB survey shows investors are keeping a close eye on domestic politics, with a record 40% saying they are ‘very concerned’ about how local political uncertainty will impact their investments. A further 46% said they were ‘concerned’, taking total concern to 86%. Global geopolitical and economic concern levels are also at a record high with 57% of investors ‘very concerned’. However the same survey shows rising concern has not translated into more investment changes, with no increase in the proportion of people making or considering changes as a result.

BANK LEVERAGE
Our bank leverage summary page has been updated with the latest RBNZ Dashboard data. Of note is the slippage in bank returns to under 10% for the first time since the pandemic, and before that the GFC.

NZX50 REBOUNDS LED BY F&P HEALTHCARE
As at 3pm, the overall NZX50 index was up +0.7% today, but down -0.2% for the past 5 trading sessions. It is up +1.5% from six months ago. From a year ago it is now up +6.0%. Market heavyweight F&P Healthcare is up +1.5% so far today. Gentrack, SkyTV, Vista Group, and Kathmandu also rebound, while Vulcan Steel, Briscoes, Goodman and Tourism Holdings fall.

RISING EXPECTATIONS
In Australia, the Melbourne Institute’s survey shows inflation expectations rose by 0.2 percentage points in August to 4.9%. This follows from a three-month period of moderating inflation expectations. Wage expectations also rose in August, after remaining static for a prolonged period.

BOUNCE-BACK
After the unexpected fall in June, Japanese retail sales surged back in July to be +4.4% higher than year-ago levels and restoring the strong gains they have been posting since March.

STILL CONTRACTING
In China, their factory PMIs for August improved marginally as expected but not by quite enough to avoid another contraction. Meanwhile their service sector PMIs were also expected to improve, but they didn’t, staying with the same contraction they recorded officially in July. We need to note that these official surveys have been running more conservative than the private S&P Global alternatives recently. The S&P Global version is due out tomorrow for the factory sector, and on Thursday for the services sector.

SWAP RATE CURVE MOVES
Wholesale swap rates will likely be higher at the short end, lower at the long end today as rates flatten noticeably. Keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was up +2 bps at 3.05% on Friday. Today, the Australian 10 year bond yield is down -1 bp to 5.08% and still near 2011 levels. The China 10 year bond rate is down -1 bp at 1.69%. The Japanese 10 year bond is up +1 bp at 2.94% and a new 30 year high. The NZ Government 10 year bond rate is now at 4.76% and down -1 bp.. (The RBNZ data is now ‘prior day’ with the Friday rate up +1 bp at 4.74%.) And the UST 10yr yield is now at 4.71%, and down -1 bp from this morning’s open.

EQUITIES MOSTLY LOWER, EXCEPT THE NZX
The NZX50 is now up +0.7% from Friday’s close and that is the best of the markets we follow. The ASX200 has opened up +0.1%. Tokyo has opened down -1.6%. The KOSPI has fallen -1.0% at its open today. Hong Kong has opened down -.0.8% while Shanghai is down -0.4% at its open. Singapore is up +0.4% in early Monday trade today. Wall Street futures suggest the S&P500 will open on Wall Street tomorrow down -0.2%.

OIL PRICES RISE
American oil prices are up +US$1.50 from this morning on the Persian Gulf flare-up with the WTI benchmark is now just on US$85/bbl, while the international Brent price is now just on US$90/bbl and up +US$2.

CARBON PRICE FIRMISH
There have been quite a number of smaller traded today and the price now up +50c to $51.50/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$25/oz from this time yesterday, now at US$4429/oz. Silver is unchanged at US$66/oz.

NZD IN FIRMISH HOLD
The Kiwi dollar is up +10 bps from this morning, now just on 59.2 USc. Against the Aussie we are unchanged at 82.6 AUc. Against the euro we also unchanged at 51.1 euro cents. This all means the TWI-5 is now just under 62.7 and up +10 bps from this morning’s open.

BITCOIN RETREATS
The bitcoin price is now at US$77,580 and down -1.8% from this morning. Volatility has been modest at just on +/- 1.6%.

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

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