A review of things you need to know before you sign off on Wednesday; more retail rate changes, business sentiment off the floor, building consent levels fade, housing lending too, Households target TDs, swaps stable, NZD soft, & 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
TSB raised its floating rate by +50 bps to 7.55%. Midland Income Fund also raised their floating rates, but by +100 bps.

TERM DEPOSIT RATE CHANGES
BNZ raised term deposit rates today and among the rises their six month rate is now 3.10%. Kookmin Bank and HSBC also raised rates. Cooperative Bank raised its six month TD rate to 3.00%. Update: ANZ has moved quickly to match BNZ's 3.10% six month rate.

PERSONAL LOAN RANGE CHANGE
Cooperative Bank tightened its rate range for personal loans from 6.99%-19.99% to 6.99%-17.75%.

SPRING IS HERE
Today is the last day of Winter, Spring starts tomorrow and banks will be turning their attention to the upcoming Spring real estate selling season. From this vantage point it looks like a lackluster period is ahead, inhibited by highish home loan interest rates, and excessive numbers of houses for sale. But really, who knows? ASB expects house prices to keep falling until mid-next year and interest rates to remain high until 2024.

GONE BY JUST AFTER LUNCHTIME
The Government has dumped the plan to extend GST to funds management fees after criticism & National leader Luxon saying he would unwind it

OFF THE FLOOR, BUT STILL NEGATIVE
Business confidence has climbed off the floor, but expectations of future inflation still remain "far too high", according to the latest monthly ANZ Business Outlook Survey. ANZ chief economist Sharon Zollner said overall business confidence lifted 9 points in August to -48, while expected own activity rose 5 points to -4.

HOUSE BUILDING FADES
July building consent levels for dwellings were little-changed in July from June, at 4100 for the month. This is however almost -3% lower than year-ago levels. Consents were down -25% for houses in July, down -21% for apartments and down -20% for retirement units. But they were up +48% for townhouses from year-ago levels to 1853 nationally in the month. 1514 of them were in Auckland. There were only 311 houses consented in the Queen City in July, the lowest of any month since January 2017 and the lowest of any non-Christmas month since 2012.

FADING FAST
Housing loans rose +$848 mln in July from June the smallest monthly rise in five years (excluding the pandemically affected April 2020 month). Year-on-year they are up +6.2% but the pace is slowing significantly now. However, total housing loans now exceed $340 bln for the first time ever. More here.

ON THE RISE
Bank lending to business is picking up, although it is more lumpy than residential lending. But it is up +8.5% year-on-year to $121 bln.

UP & SHIFTING
Household deposits are shifting out of transaction and savings accounts and into term deposits and the shift is quite large. Term deposit balances rose +$2.7 bln in July, and that was on top of +$2.9 bln in June after the prior three months all grew by more than +$1 bln. They are up +$12 bln in a year. The incentive of rising interest rates certainly motivates savers. Meanwhile savings account balances fell -$700 mln in July from June and are down -$2 bln in the past four months. And household transaction account balances fell -$1.2 bln in July from June. So all up that means household bank account balances only rise +$800 mln in the month but are up +$17 bln in a year.

PRODUCTIVITY IMPAIRED
Ports of Auckland has sailed into the red in the latest financial year thanks to the automated container terminal project their masters forced them to axe. The loss reported was more than -$10 mln. Their inability to complete important productivity improvements will keep them consigned to being the least productive port in the Oceania region (see pg 57).

LOWER SUPPLY, HIGHER DEMAND
Fonterra said its July milk collections were very strong in the South Island, but weak in the North Island. Meanwhile they report that demand is up strongly everywhere - except from China.

NOT JUST HOUSING
Total construction work done in Australia unexpectedly fell by -3.8% on a quarter-on-quarter basis for the three months to June, sharply missing expectations of a +0.9% rise and following a -0.9% fall in the first quarter. It was the second straight of quarter decline in construction work done, due to a fall in building work done (-4.6%), residential (-6.8%), non-residential (-1.1%), and engineering work (-2.7%). Don't move to Australia for a construction job.

UNINSPIRING
The official measure of Chinese factory activity contracted for a second straight month and the fifth decline in the past six months. These signs of weakness are building up now. Meanwhile the official Chinese service sector PMI is still expanding but at a slower pace. They can take some heart from that expansion even if it is their slowest in three months. The extended weakness has some analysts reducing their 2022 growth estimates down to just 3% and for such a large economy, that is a long way from Beijing's target of "about 5½%".

SWAP RATES HOLD HIGH
Wholesale swap rates are probably little-changed today but holding recent rises. Our chart will record the final positions. The 90 day bank bill rate is unchanged at 3.47%. That is its highest since July 2016. The Australian 10 year bond yield is now at 3.62% and down -6 bps from this time yesterday. The China 10 year bond rate is at 2.68% and also down -2 bps. The NZ Government 10 year bond rate is now at 3.98% and up +1 bp from this time yesterday, and now the same as the earlier RBNZ fix for this bond which was up +1 bp also at 3.98%. The UST 10 year is now at 3.11% and up +2 bps from this time yesterday.

EQUITIES WEAK
The S&P500 fell -1.1% in Tuesday trade, staying down all session. Tokyo is down -0.6% in Wednesday trade taking back about half of yesterday's rise. Hong Kong is down another -1.3%, and Shanghai is down -0.8% in early trade. The ASX200 is down -0.2% in afternoon trade after recovering some larger earlier falls, and the NZX50 is level-pegging today, and sort of bucking the worldwide trend.

GOLD FALLS
In early Asian trade, gold is down -US$6 from its level this time yesterday, down to US$1,722/oz.

NZD STAYS LOW
The Kiwi dollar is now back down at 61.3 USc and a dip of -¼c from this time yesterday. Against the AUD we are at 89.4 AUc. Against the euro we are at 61.2 euro cents soft. That all means our TWI-5 is now at 70.5 and down -30 bps since this time yesterday..

BITCOIN WOBBLES
Bitcoin is wavering today, now at US$20,378 and little-changed from this time yesterday after recovering a big dip. Volatility over the past 24 hours has been moderate at +/- 2.6%.

This soil moisture chart is animated here.

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