A review of things you need to know before you go home on Wednesday; Co-op Bank cuts Step Saver, rents up in halo regions, community finance scheme extended, occupancy rate up, swaps up, NZD lower

Here are the key things you need to know before you leave work today.

TODAY'S MORTGAGE RATE CHANGES
No changes here today.

TODAY'S DEPOSIT RATE CHANGES
The Co-operative Bank today cut its Step Saver account rate by -10 bps, so their potential top return is now 2.65%.

HUGE INTEREST
Yesterday we noted the Aussies are about to offer a 30 year Government bond. Our guess of a 3.25% yield looks like it is close, and it is apparently attracting "huge" interest with over AU$11 bln pledged already. Demand is apparently coming from insurers who like the relatively high rate for a AAA bond, and from speculators keen to bet on the basis they will win big capital gains if a slowdown in China forces further RBA rate cuts.

CAN THE HALO LAST?
Infometrics is reporting the 'rent halo' is still glowing despite an Auckland slowdown. Waikato, Bay of Plenty, and Queenstown continued to be the hotspots for rental growth in the September quarter. However, nationwide rental inflation held steady at +4.5% pa in the quarter, with accelerating rental growth in the areas mentioned above offset by a slowdown in Auckland. At +3.7% pa, rental growth in Auckland is now at its weakest in two years.

COMMUNITY FINANCE PARTNERSHIP EXTENDED
Social Development Minister Anne Tolley says a community finance partnership, trialed in west and south Auckland, is being extended to Whangarei, Auckland's Mt Wellington, Christchurch, Wellington, Palmerston North and Invercargill. Napier, Hastings, Tauranga, Rotorua, Dunedin and Hamilton are to follow. The partnership involves the Government, BNZ, Good Shepherd NZ and the Salvation Army. Budget 2016 pledged $4.2 million in operating funding over four years to widen the scheme's reach. The scheme provides loans to people described as "financially vulnerable", meaning they don’t meet standard bank criteria and have exhausted their Work and Income options. BNZ says 280 loans have been approved and suggests the $700,000 of lending to date has saved borrowers about $380,000 in interest and charges when compared to borrowing the same amount through alternative lenders. The bank says it has committed $60 million in lending over the long-term.

DIVING IN
First home buyers put more than $0.5 bln extra towards a house purchase in the year to March by accessing KiwiSaver and HomeStart grants. 31,400 people accessed $485 mln in KiwiSaver funds – up from 14,600 and $214 mln in the previous year. HomeStart grants were accessed by 13,054 people and totaled $60.4 mln in the same period, as compared to 6,357 and $26.4 mln in the previous year. These values are in addition to straight savings for a house deposit. If those 31,400 people all purchased a median-priced house, that means they made house purchases in excess $14.5 bln.

THEY KEEP COMING, EVEN IN THE OFF SEASON
A surge in foreign visitors is keeping our tourist accommodation fuller in August 2016 than in any equivalent month in earlier years. The occupancy rate in August was 35.2%, also an August record, and now well above the levels achieved during the 2011 Rugby World Cup (32.1%).

BIG RETRENCHMENT
In Australia, engineering construction is in something of a free-fall. It fell -10% from March to June, and is down -25.9% year-on-year. This sector is doing it tough over there.

THANKS FOR THE PREMIUMS
Australia's CommInsure scandal prompted regulator ASIC to investigate the life insurance industry over there. They found one life insurance company declining more than one in three total and permanent disability claims made by its customers. Three other life insurers dismissed a quarter of total and permanent disability claims. The number one denier of claims rejected 37% of them ! ASIC didn't name any of them so it is impossible for customers to avoid the risks. (See page 106.)

WHOLESALE RATES RISE
The wholesale rates are up +1 bps today for terms 2 to 5 years, and +2 bps for 7 and 10 years. The 90-day bank bill is down another -2 bps today to 2.15%. That suggests markets are pricing a 40% chance of an OCR cut on November 10. There was a lower tinge to NZGBs yields, with yields down -1 to -3 bps today with the shorter terms taking the bigger falls.

NZ DOLLAR LOWER
The fall in the NZD overnight has been maintained today. The NZD/USD is now at 70.7 USc. On the cross rates, it is trading at 93.4 AUc, and is at 64 euro cents. The TWI-5 is 74.7. Check our real-time charts here.

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