A review of things you need to know before you go home on Tuesday; firms pay later, Shanghai holds, BNZ chases KiwiBuild business, why pay lags, swaps firm, NZD soft

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

MORTGAGE RATE CHANGES
No changes today.

TERM DEPOSIT RATE CHANGES
ANZ has reduced its Serious Saver potential rate by -10 bps to 2.10% which will be effective on October 1, 2018. This will leave ASB's Savings Plus, and BNZ's Rapid Saver as the bonus savers with the highest rates at present.

LARGE & LATER
New Zealand businesses paid their bills on average 6.8 days 'late' in the June quarter, (after their due date). Interestingly, the larger the business, the later the payments. Businesses with 500 or more employees were late by an average of 8.9 days (even though this is a substantial improvement from this time last year). Companies with 50-200 staff are late 7.9 days, and companies with 6-20 staff late by only 6.6 days. Agriculture firms are the fastest payers (3.5 days late) while the wholesale trade is the slowest, 9.7 days late on average. (But even our slowest is faster than the average 11 days late recorded in Australia.)

CONFIRMED ?
Today was the first day of trading in Shanghai after the heady jump last week (+2.5%) and after their Mid-Autumn Festival holiday. But those higher levels are holding, even if there is a small dip today, down -0.6% - which interestingly is the same drop as the -0.6% for Wall Street's Dow earlier today.

BIDDING FOR KIWIBUILD CUSTOMERS
Competition to finance buyers for the KiwiBuild program is hotting up. The latest offer is from BNZ who will lend qualifying borrowers up to 95% of the purchase price, and will give conditional pre-approval for up to 12 months. Remember, the RBNZ LVR restrictions don't apply to new-builds, so banks can offer more flexible terms in this market.

WHY PAY IS LAGGING
A new research paper in Australia suggests a reason why pay rates have stagnated. They observe that productivity growth is concentrated in a few large firms. Rather than share the benefits with their workforce, they are capturing it themselves. Most forms aren't achieving productivity growth so have little to share, and pose no competitive threat to the large efficient firms. The net result is wage growth lower than productivity growth. The situation won't change until productivity growth becomes widespread, and pay rises forced on unproductive companies may just cause them to go out of business.

GETTING THERE
In Australia, their +2.9% economic growth has helped to deliver a smaller budget deficit that expected of -0.6% of GDP. Their deficit was -AU$10.1 billion in the year, a +AU$19 bln improvement on the deficit originally estimated for the period. But it is still expected to be another two years before they move into the black. (The NZ budget is expected to deliver a surplus this year, probably around +2.8% of GDP, although that will be significantly lower than the previous year. The New Zealand outcome will be reported on Tuesday, October 9, 2018.)

SWAP RATES FIRM
Swap rates are up +1 bps across the curve, although the 10 year is up +2 bps. The UST 10yr is also up by +3 bps and now at 3.10% with the UST 2-10 curve unchanged at +26 bps. The Aussie Govt 10yr is up strongly at 2.75% (up +4 bps), the China Govt 10yr is at 3.70% (down -1 bp), while the NZ Govt 10 yr is at 2.70%, and up +1 bp. The 90 day bank bill rate is up +1 bp at 1.92%.

BITCOIN LOWER
The bitcoin price is lower today at US$6,409, down -4.6% from this time yesterday.

NZD SOFTER
The NZD is down -½c at 66.3 USc. On the cross rates we are unchanged at 91.7 AUc, and at a little softer 56.5 euro cents. That puts the TWI-5 at 70.

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