What happened on Wednesday | interest.co.nz

Here are the key things you need to know before you leave work today (or if you’re already working from home, before shutting down your laptop).

MORTGAGE RATE CHANGES
Five banks revised fixed carded rates today, and all the changes were cuts. This involved China Construction Bank, ICBC, Cooperative Bank and SBS Bank. Our rate tables have all changes updated.

CHANGES IN TERM DEPOSIT RATES
Five institutions today revised some card term deposit rates, including BNZ, Kiwibank, SBS Bank, the Cooperative Bank and Unity Money. All of these changes were increases. More here. You must be skeptical about how long TD rates can go up when home loan rates go down. (Also, one reader pointed out that existing customers can often get slightly higher rates than advertised. You should ask for them.)

LOW-INTEREST PERSONAL LOAN FOR VEHICLE AND E-BIKE
Westpac has launched a new low-interest car loan for electric vehicles, including electric cars, electric bicycles, electric scooters and electric mopeds. After a $100 application fee, the interest rate is 6.99% per annum (a variable rate) and is available up to $50,000 for a maximum term of 5 years. If you borrowed the maximum over the full five years, your monthly repayments would be $992 and you would pay $9,420 in fees and interest. Westpac also has a discounted Warm Up loan and a Sustainable Agribusiness loan. Westpac’s normal car loan is variable at 14% per year.

INCREASE IN COMMERCIAL CONSENTS
The value of new office and warehouse buildings being approved is currently at record levels with nearly $800 million for this type of construction granted in the second quarter alone.

RECORD CONCRETE POURING
New data released today by Stats NZ shows that record amounts of ready-mixed concrete was poured for a June quarter, more than 1.2 million m3 during the quarter and the first time that it exceeded this level. Activity in Auckland drove the result, but the levels paid in Otago/Southland also stand out for their increase. The Wellington region is notable for its weakness. Nationally, nearly 4.6 million m3 were spilled over the past year, also a new record.

FALSE & MISLEADING
Cigna insurer has admitted to make false and misleading statements about its disclosure of inflation adjustments to its insurance coverage. This is a self-reported error after the FMA and RBNZ Life Insurance Conduct and Culture Review final report. It involves more than 50,000 policies and more than $13 million in additional costs from 2013 to 2019, or an average of $258 per policy affected.

RECORD PROFITS – AGAIN
ASB profit is pushing towards NZ$1.5 billion for its June year. CEO Vittoria Shortt says, “We’re here to help.” These results were part of the Publication of the ABC’s annual reportwhich shows CEO Matt Comyn earned A$7m (page 92), and up +35% from 2021. Page 93 reveals Shortt earned A$3.7m, up + 27% compared to 2021. She is the fourth highest paid manager in the CBA group. .

CHINA’S CPI RISES, BUT NOT AS EXPECTED
China annual inflation rate rose to 2.7% in July from 2.5% in June, but this was below the market forecast of 2.9% for July. Even so, this is the fastest rise in consumer prices since July 2020, driven mainly by a spike in food prices as the cost of pork rebounded sharply. Beef prices held steady, but sheepmeat prices fell sharply. Milk prices are stable.

CHINA’S PPI INCREASES EASE
Meanwhile, China producer price inflation has eased to a 17-month low of 4.2% in July, an easing from 6.1 in June and less than the market consensus of 4.8% for July. The latest figure marked the 19th straight month that producer price inflation has slowed following lower raw material costs as construction activity slowed.

A FINANCIAL STABILITY RISK
In China, their National Audit Office is now investigate loans through their parallel banking trust industry to real estate developers. These loans are now in jeopardy, jeopardizing the US$3 billion fiduciary industry and financial stability in China. This could be a background reason why the Taiwan issue has been raised, as a backdoor crisis that cannot be blamed on Beijing’s economic management.

A BIG HARVEST OF CEREALS TO COME
In Australia they are preparing for a record winter grain harvest. This comes at a lucky time for them as international demand and prices are high because conditions in the northern hemisphere are not good for food production.

SWAP RATES STOP FALLING
Wholesale swap rates are likely higher today, reversing some of yesterday’s pullback. The 90-day bank bill rate firmed slightly +1bp to 3.24%. The Australian 10-year bond yield is now at 3.23% and up +3 basis points from the same time yesterday. The Chinese 10-year bond rate is now at 2.76% and unchanged. The New Zealand 10-year government bond rate is now at 3.33%, up +1bp from the same time yesterday, and matches the RBNZ’s earlier fix for that bond which was down -2 bps at 3.33%. The 10-year UST is now at 2.79% and up +3 basis points from the same time yesterday.

SOFT ACTIONS
Wall Street closed slightly lower today in light trading, with the S&P500 down -0.4% from yesterday. Tokyo opened down -0.8%. Hong Kong slumped on its open, down -2.1%. Shanghai is down -0.6% in Wednesday morning trading. The ASX200 is down -0.2%. And the NZX50 is also down -0.2% late in the session, not helped by a -7.5% decline in A2 Milk (AT M#10) stocks. More here. Meridian (EMAIL, #6) is also down -1.6%. In the other direction, notable gains are from Ryman (OBLIGATE#12), ANZ #35 and Vector (VCT#25), all with gains greater than +2% on the day.

CABINET D’OR
In early Asian trading, gold was up another +US$9 from the same time yesterday, now at US$1,794/oz.

NZD CLOSED
The Kiwi dollar strengthened slightly again today at 62.9 USc compared to the same time yesterday. Against the AUD, we are firmer at just 90.4 AUc. Against the euro, we are unchanged at 61.6 euro cents. This means that our TWI-5 is now only 71.4.

BITCOIN FALLS
Bitcoin is now at US$22,811 and down -4.1% from the same time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 2.7%.

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