A review of things you need to know before you sign off on Thursday; Westpac boosts some short TD rates, housing confidence crumbles, retail retreats unexpectedly, SMEs suffering, BNPL casualty, swaps firm, NZD holds, & much more

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

MORTGAGE RATE CHANGES
No changes to report today.

TERM DEPOSIT RATE CHANGES
Westpac has raised some term deposit rates for terms of 1 year and less.

"HOUSING CONFIDENCE ... CRUMBLING"
ASB says the public's confidence in the housing market has finally cracked. In their survey, housing market confidence is now at its lowest level in 13 years.

RECESSION RISK
Almost all economists were surprised by the fall in retail spending in the June quarter, which raises the possibility the country may have gone into a technical recession in the first half of the year.

SMEs SUFFERING
The Xero Small Business Index for July showed sales have slumped as the cost of living begins to impact small businesses. Sales fell -1.5% year-on-year in July, down from a +4.4% growth in June and now the lowest it has been since September 2021. The "shop local" and "support Kiwi business" impetus has faded or even evaporated.

PROGRESS IN THE FIGHT AGAINST CYBER FRAUD
Reported cyber security incents reported fell in the June quarter according to CERT. But despite the overall fall, there was a spike in scam calls where attackers were pretending to be from a bank to try and trick recipients into sharing financial information, giving access to their bank accounts or allowing remote access to their devices or PCs.

DIVERSIFYING AWAY FROM NEW ZEALAND
The proportion of KiwiSaver assets invested in New Zealand has fallen to its lowest level ever, just 43.5% as at the end of June 2022. It peaked at 61% in September 2008 and has been steadily falling since. Having said that, is is now at $38 bln, but this is -10% lower than a year ago and lower than its peak of $42 bln at the end of 2021. The New Zealand investments are more risk-averse than the international investments.

COMPARING THE BANKS' KEY METRICS
The RBNZ released its Dashboard data today which allows you to compare detailed bank financial statement data between each of them. We have now updated our Bank Key Metrics tool which uses that same data (and which we suspect many readers will find easier to use).

THE MINNOWS GROW MARGINS FASTER THAN THE MAJORS
Yesterday we noted the good rise in net interest margins (NIMs) in the June quarter by the local banking industry. Today we got the detail in the RBNZ Dashboard, and that shows the main banks all raised theirs modestly (+0.1%) to about 2.1% except Kiwibank which grew theirs by +0.2% to 2.3% and the highest of any main bank. The real movers were the challenger banks where MINs rose strongly. TSB recovered from 1.9% to 2.1%, SBS held at 2.6%, Cooperative Bank rose to 2.5% from 2.3%, and Heartland rose from 4.3% to 4.6%.

HUMM SHUTTING NZ BNPL SERVICES
Humm Group says it has made "the strategic decision" to close its buy now pay later (BNPL) services bundll and humm in New Zealand to focus investment on its card portfolio. The company says none of its NZ cards or commercial products are impacted and its Auckland office will remain open. In NZ humm's BNPL products won't be available after September 25. Bundll was launched in partnership with Westpac just 13 months ago.

NEW RABOBANK CHAIRMAN
Rabobank NZ says former Farmers Mutual Group CEO Chris Black will join its board and succeed Andy Borland as Chairman in November. Borland is Managing Director of Scales Group and will leave Rabobank's board after a six year stint.

ANOTHER RATE HIKE IN KOREA
The Bank of Korea raised its base rate by +25 bps to 2.5% during its August meeting, as widely expected, citing persistent inflationary pressures and high inflation expectations. Today's move came after they delivered an unprecedented +50 bps rate increase in July and as they try to prevent capital outflows amid more rate hikes in the US. The latest decision was also the 7th increase in borrowing costs since they lifted their base rate for the first time in August 2021. South Korea's inflation rate to hit 5.2% this year, the highest level since 1998.

CHINA SPLASHES MORE CASH
China has rushed out more economic stimulus with a further ¥1 tln set of policy measures to try and rebuild some growth, guard against the effects of their pandemic policies and try to fix the corrosion of their property market crisis. A 19-point policy package announced yesterday included another ¥300 bln that SOE banks can invest in infrastructure projects, on top of ¥300 bln already announced in June. Local governments will be allocated ¥500 bln of special bonds although this is not all strictly 'new'.

SWAP RATES FIRM
Wholesale swap rates are probably higher again today, still on those global influences we have been noting recently. The curve steepening still still there too. The 90 day bank bill rate is up +3 bps at 3.42%. The Australian 10 year bond yield is now at 3.72% and up another +7 bps since this time yesterday. The China 10 year bond rate is at 2.66% and little-changed and still near its lowest since May 2020. The NZ Government 10 year bond rate is now at 3.86% and up only +1 bp from this time yesterday, and now matching the earlier RBNZ fix for this bond which was down -1 bp to 3.86%. The UST 10 year is now at 3.10% and up +6 bps from this time yesterday.

EQUITIES FLAT
On Wall Street, the S&P500 rose +0.3% today as it ambles toward the end of their summer holiday period and awaits the Powell speech on Saturday. Tokyo is up +0.5% in Thursday trade so far and making back yesterday's fall. Hong Kong is shut on a typhoon alert although it may open later as the storm passes, and Shanghai is flat in early trade today. The ASX200 is up +0.8%, and the NZX50 is up +0.2% in late trade, led by Freightways, Vital Healthcare, and Heartland Group. It is being held back by Summerset, Ryman, SkyCity, and Contact Energy.

GOLD HOLDS
In early Asian trade, gold is unchanged from this time yesterday at US$1,746/oz.

NZD MARGINALLY FIRMER
The Kiwi dollar is a tad firmer from this time yesterday, still at 62.1 USc. Against the AUD we are softer at 89.4 AUc. Against the euro we are little-changed at 62.1 euro cents (and notice, it is at parity with the USD now which is a big comedown, and a 20 year event). That all means our TWI-5 is now at 71.1 and up very slightly.

BITCOIN ALSO MARGINALLY FIRMER
Bitcoin is in another quiet period, up +1.0% from this time yesterday at US$21,530. Volatility over the past 24 hours has been modest at just on +/- 1.7%.

This soil moisture chart is animated here.

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