A review of things you need to know before you go home on Friday; one TD cut to new low, reno work easing, skinny yields in demand, house price inflation expectations surge, swaps low, NZD holds low, & more

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

MORTGAGE RATE CHANGES
No changes today.

TERM DEPOSIT RATE CHANGES
ASB has cut all TD rates, and taken them down to market-lows, generally below all of their main rivals. This is a signal that others will no doubt follow.

GOING SOFT
Building consent figures suggest home renovation work is easing off. The value of consents issued for alteration work to existing dwellings has hit its lowest point in five years - with both Auckland and the Bay of Plenty particularly soft.

DOING BETTER
Shamubeel Eaquab has been tracking Auckland's L3 lockdown compared with the previous lockdown. Details here. Activity has fallen during the restriction he notes, but business and economic activity seem to be holding up better under current restrictions than last time.

HEAVY DEMAND FOR VERY SKINNY YIELDS
Another big Government bond tender today, and another overwhelming show of demand. All up $950 mln was offered and it attracted $2.25 bln in bids. The April 2023 was won with an average yield of 0.05% compared to the 0.32% yield at the previous tender. The April 2029 tender was won at 0.48% (compared top the previous 0.67%), and the April 2033 tender was won at 0.75%, down from 0.89% at the prior tender.

WE ARE PAYING THEM OFF FAST
Domestic billings on NZ issued credit cards fell -1.5% in July from a year ago. Balances on cards are down -13.3% year-on-year.  These cards are still incurring average interest rates of 17% pa. Under 60% of these balances now incur interest, cycle low levels.

ASSET PRICE BOOM
Expectations of housing inflation roared back in the September quarter according to an RBNZ survey. More than half of respondents think house prices will rise from here, although at a fairly modest rate (+2.2% pa). That is quite different to the June quarter when no-one thought house prices would rise. None of this is surprising however when the RBNZ is creating the conditions for asset price inflation.

FULLER, BUT NOT ENOUGH
We are ending the week with slowly rising reservoir levels in Auckland, now up to 62% full. But normal is 88% for this time of year. The recent heavy rain helped less than hoped for. The hydro lake situation is equally concerning.

AUSSIE RETAIL SALES BUMP
In Australia, retail sales rose at a +3.3% month-on-month pace in July, up +12% year-on-year with a bounceback effect, with household goods sales up +30% from a year ago. And this was with data for Victoria declining in their lockdown.

INSOLVENCY FIRMS INSOLVENT
And more than 300 insolvency firms are registered for Australia's JobKeeper support program because their public moratorium on insolvent trading has seen their business collapse.

THE REAL TRACK ISN'T WHAT THE POLITICIANS CLAIMED
The Australian Government famously called itself in surplus late last year, and too early. It never eventuated. Now official independent analysis shows that their federal budget will not return to surplus this decade and not at least until at least the 2030s. By 2030 Australia's government debt will be AU$800 bln higher than without the pandemic.

NO MORE MR NICE GUY
Inability to pay the rent on time has seen Westfield board up 129 stores run by Mosaic Brands in Australia. Landlords are getting desperate.

'AN UPTREND, SHIRKING OFF SHORT TERM RISKS'
Ratings agency Fitch sees the NZD holding its own. It says: "We now expect that the New Zealand Dollar will average USD0.640/NZD (from USD0.625/NZD previously) in 2020 as the unit remains on a recovery path despite the resurgence in new Covid-19 cases. With elections scheduled for October, we believe that the unit will remain vulnerable over the coming months, however, a good track record in terms of combating the Covid-19 outbreak could mean that the currency could finish strongly towards the end of the year. We retain our view that over the long term the currency will continue appreciating against the US dollar with economic fundamentals seen to be strengthening over 2021."

EQUITY UPDATES
The S&P500 ended the session in New York today up +0.3%. That followed European markets last night that were down sharply. Today, Shanghai has opened up +0.8%. Hong Kong has opened up +1.3%. Tokyo is up +0.3%. In Australia, they are flat in early afternoon trade. Here the NZX50 Capital Index is finishing the week up a strong +1.3%. That is heading for a +3.2% rise for the week.

SWAP RATES UPDATE
Swap rates were down sharply at the end of trading yesterday, but we don't have today's result yet, We will update this note if it is a significant movement. The 90-day bank bill rate is unchanged at 0.27%. The Aussie Govt 10yr is up +2 bps at 0.89%. The China Govt 10yr is unchanged at 3.02%. But the NZ Govt 10yr yield down -4 bps to 0.62% and a new all-time low. The UST 10yr is down -2 bps at 0.65%.

NZ DOLLAR LOWER
The Kiwi dollar is lower that this time yesterday at 65.4 USc. Against the Aussie we are softer at 90.8 AUc. Against the euro we are also softer at 55.1 euro cents. All those changes have pushed the TWI-5 down to 68.3. But all these rates are slightly higher than where we opened this morning.

BITCOIN RISES MARGINALLY
The price of bitcoin has firmed today by about +US$100, to US$11,842 and a gain of +0.7%. The bitcoin price is charted in the currency set below.

This soil moisture chart is animated here.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».