A review of things you need to know before you go home on Friday; more rate cuts, retail lull, Kiwibank reports lower result, KiwiSaver an offshore investment, swap rates rise. NZD firms, & more

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

MORTGAGE RATE CHANGES
HSBC trimmed most of its mortgage rates, taking -55 bps off its floating rate, and dropping its eighteen month and three year rates toi market leading levels. It cut all other rates except its four and five year fixed offers.

TERM DEPOSIT RATE CHANGES
HSBC cut almost all its rates, and they are now down to 2.20% for six months and one year. TSB also cut most of its rates.

NOTHING TO WRITE HOME ABOUT
Retail sales were just +3.4% higher in the June quarter from the same period in 2019, and that is the slowest rate of growth since early 2013. Stats NZ called it a "lull". It is quiet for grocery, food, pharmacy and furniture retailers, a bit better for most other categories and especially online and for recreation goods.

LESS PROFITABLE
Kiwibank cites banking fee reductions, bill paying services returning to NZ Post, and lower insurance income as its annual profit drops by -$7 mln to just $108 mln from $115 mln in the 2018 year. To put that in perspective, ASB who also reports to June, had net profit after tax up +$108 mln, or +10%, to almost $1.2 bln. ASB has loans & advances of $83 bln compared with Kiwibank's $23 bln so is 3.7 times as large. But ASB's profits are eleven times as large. Kiwibank's return on equity is +5.2% whereas ASB's is +15.2% and ASB has five times the equity of Kiwibank.

THE NEW CHALLENGES OF INFLATION TARGETING
The Reserve Bank and the International Monetary Fund are hosting a conference in Wellington next week to discuss broad issues around monetary policy, the labour market, and the future of inflation targeting. Special speakers include the head of the San Franciso Fed, Mary Daly. The event will bring together central bankers, "thought leaders" (?), academics, and policymakers from more than 20 countries.

NZX AN UNDER-PERFORMER
Most equity markets are up modestly in trade today - except the NZX50 which is down -0.8% so far and if it stays at this level it will end unchanged for the week. The ASX200 is likely to end up +1.7% for the week, Shanghai will be up +2.0%, Hong Kong up +0.6% and Tokyo up +0.4%.

KIWISAVER INVESTMENTS IN NZ ABOUT TO BECOME THE MINORITY
New data out from the RBNZ shows that we now have $59.6 bln invested in KiwiSaver accounts, up +17% from this a year ago in June 2018. The proportion invested in New Zealand is now down to just on 50%, a drop of -2.0% in a year. That means that of the extra +$8.7 bln growth in the past year, less than 40% was invested locally.

SWAP RATES FIRMER
Wholesale swap rates have risen sharply today, up by +4 bps across the whole curve. The 90-day bank bill rate is up +1 bp at 1.19%. Australian swap rates are little-changed so far today. The Aussie Govt 10yr is up 4 bps at 0.97%. The China Govt 10yr is unchanged at 3.07%, while the NZ Govt 10 yr is up +1 bp at 1.14%. The UST 10yr yield is up +6 bps to 1.65%.

NZ DOLLAR BACK UP
The Kiwi dollar is up off the carpet and back to the level it was this time yesterday at 63.9 USc. Against the Aussie we are firmer at 94.6 AU cents. Against the euro we are little-changed at 57.7 euro cents. That puts the TWI-5 back to 69.3.

BITCOIN BLIPS
Bitcoin is also back higher, now at US$10,107, up +1.6% from under the US$10,000 level in the past 24 hours. The bitcoin price is charted in the currency set below.

This chart is animated here.