A review of things you need to know before you sign off on Friday; lots of construction work planned, consumer confidence low & steady, ECQ cover doubles, households like TDs again, swaps up, NZD low & steady, & 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
The Police Credit Union raise two fixed rates today.

TERM DEPOSIT RATE CHANGES
The Police Credit Union raised its 90-day Notice Saver rate to 3.75%

TRACKING SIDEWAYS AT A HIGH LEVEL
The August level of new building consents suggest residential construction will remain strong, commercial construction will be even stronger. The number of new dwellings being consented is flattening with the first decline in townhouse consents in three years. But there's still strong growth in residential alteration work and the commercial building work pipeline.

LITTLE-CHANGE
ANZ reports that their September survey (with Roy Morgan) shows consumer confidence was unchanged in September at 85.4. The proportion of people who believe it is a good time to buy a major household item, the best indicator for retail spending, fell -8 points to ‑25, where it was two months ago. Inflation expectations were little changed at 5.1%, versus 5.0% last month.

BINANCE LAUNCHES IN NZ
Binance, the world's largest cryptocurrency exchange, has registered with New Zealand's Ministry of Business, Innovation and Employment on the Financial Service Providers' Register under the name Investbybit Ltd. Binance says this allows it to offer a range of financial services in NZ including spot trading, staking and NFTs. Binance NZ will be led by general manager Ben Rose, who has a sales and marketing background. Rose says Binance will offer access to the lowest trading fees, plus many exciting global product and service innovations. Registered in the Cayman Islands, Binance has been the subject of interest from regulators in several countries over the past couple of years. Just this month Reuters reported that US federal prosecutors asked Binance for extensive internal records about its anti-money laundering checks, along with communications involving its CEO and founder, Changpeng Zhao, in late 2020 as part of an ongoing Justice Department investigation into the firm's compliance with US financial crime laws.

FEWER COMPLAINTS OVERALL, BUT MORE SCAMS
The Banking Ombudsman reports that they handles nearly -2% fewer claims in the year to June 2022 and investigated -15% fewer due to a new triaging process. But they also reported that complaints involving scams are rising quickly, up +63%.

BETTER DIVERSIFICATION
Fonterra reported that its milk volumes are running almost -4% lower than the same period last year. This is not unlike more other dairy exporters, except in the US where production is rising. They also reported that August imports of dairy products were down a startling -25% in August to be -15% lower for the full year. But they are selling much more into Latin America, non-China Asia, the Middle East and Africa. These are more than making up for the China shortfall.

EQC COVER UPDATE
From October 1, 2022 insured homeowners will be covered for $300,000 of EQCover if their home is damaged by a natural hazard. This doubles the current EQCover building cap of $150,000 and takes effect when homeowners renew their policies or take out new ones. At the same time there is a reduction in the rate of levies from 20c to 16c per $100 of EQCover.

FOR UNDERPAID CLAIMS AVERAGING $1078 EACH, AIA GETS FINED $1828 EACH
The Auckland High Court has ordered life insurer AIA to pay a pecuniary penalty of $700,000 for making false and/or misleading representations to some customers. AIA admitted to the conduct last year in court. The FMA and AIA agreed a penalty of $700,000 reflected the seriousness of the breaches. In his judgment, Justice Michael Robinson was satisfied a penalty of this amount was appropriate, taking into account AIA’s admissions, self-reporting, cooperation during the FMA’s investigation, thorough remediation in compensating customers, and system errors being unintentional. The FMA said it wanted to denounce the misconduct, and hold AIA accountable for the breaches and any harm caused to the 383 affected customers, who were overcharged (or had claims underpaid by) more than $413,000. The FMA also wanted to deter financial institutions from having deficient processes or systems.

HOUSEHOLDS LIKE TERM DEPOSITS AGAIN
Household deposits rose +$642 mln in August from July to be +$16.8 bln higher than a year ago. This is the sort of increase we have seen for many months now and households have $224 bln in bank accounts. But term deposit balances rose almost +$2.6 bln, the same pace as the prior two months and taking TD balances up to $96.4 bln and the highest since September 2020. Most of this investment is a shift from savings accounts (-$1.2 bln) but current accounts shrank -$0.7 bln too.

WHIMPER
Housing debt rose +6.1% in the year to August according the latest RBNZ data. But the July to August rise was only +$951 mln, the second lowest since July 2017 (pandemic excepted). This confirms the weak end to the winter real estate selling period.

SWAP RATES BACK UP
Wholesale swap rates are probably back to where they were tow days ago, perhaps recovering +10 bps. But the key action comes near the close. Our chart will record the final positions. The 90 day bank bill rate is up +3 bps at 3.85% settling in as we are now only two business days away from the RBNZ OCR review. The Australian 10 year bond yield is now at 3.97% and up +7 bps since yesterday. The China 10 year bond rate is up +1 bp from yesterday at 2.76%. The NZ Government 10 year bond rate is now at 4.31%, and up +99 bps and now well above the earlier RBNZ fix for this bond at 4.24% which was up +6 bps from yesterday. The UST 10 year is now at 3.79% and up +3 bps from this time yesterday.

EQUITIES ALL LOWER
Wall Street ended its Thursday trade down -2.1% on the S&P500 and a late steadying of the losses. Tokyo is down -1.4% in early trade today and heading for a -2.7% weekly loss. Hong Kong is down -0.5% at today's open and heading for a weekly loss of -4%. Shanghai is also down -0.5% at its open and heading for a -1.3% fall. The ASX200 is also down -0.6% in early afternoon trade today on the way to a -0.9% weekly fall. And the NZX50 is down -1.8% near the end of trade and about to book the worst weekly result of -4.5%

GOLD FIRM
In early Asian trade, gold is at US$1662/oz and a rise of +US$6 from this time yesterday.

NZD IN MINOR FIRMING
The Kiwi dollar has firmed slightly since this time yesterday to be just over 57.2 USc. Against the AUD we are up +20 bps at 88 AUc. Against the euro we are now at 58.3 euro cents and down more than -½c. That all means our TWI-5 is at 67.4 and down -20 bps from this time yesterday.

BITCOIN HOLDS
Bitcoin has risen today and is now at US$19,501 marginally lower than this time yesterday. Volatility over the past 24 hours has been moderate at just on +/- 2.2%.

This soil moisture chart is animated here.

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