A review of things you need to know before you go home on Monday; NZ service sector strong, calls for more irrigation, ANZ to issue hybrids, Japan factories expanding, NZ swap rates fall, NZD lowest in 4 years

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

TODAY'S MORTGAGE RATE CHANGES
Kiwibank launched a market-leading 5.89% five year 'special' - as we predicted on Friday. Given today's -6 bps fall in five year swap rates to 3.67% if is not hard to see them being followed - even trumped - by similar moves by other banks.

TODAY'S DEPOSIT RATE CHANGES
There were no changes announced today.

END OF YEAR TOP UP
The New Zealand service sector is in good shape, according to the latest BNZ-BusinessNZ PSI index for December that was out today. The survey showed that 'expansion improved' in the sector and the data confirmed the upbeat NZIER QSBO confidence reading. The trend has been up since the start of 2011 and for the full year this was the highest yearly average score since the survey began in 2007.

'STORE MORE WATER'
The east coast dry spell has ramped up calls for more water storage and irrigation schemes.

TAKE CARE
ANZ and the NAB are both reported to be about to issue a large 'hybrid' capital note issue as a way for them to bolster their capital. We have reported on these types of toxic issues before and suggest you do extensive due diligence before you buy any. They really are not for retail investors and have regulators nervous - because they are designed to protect the bank by transferring all their risk to holders of these securities. The real worry in New Zealand is not that retail investors will actually fall for the offer - it is that their KiwiSaver funds will bulk up on them. Warning issued.

ON THE RIGHT TRACK?
Japan’s trade deficit halved in December from the same month a year earlier as exports jump 13%, a sign that the nation’s trade balance may be starting to improve, despite a record annual shortfall in 2014. Separately, the latest factory PMI for Japan showed continuing expansion. That is much better than for China which is contracting, but not as strong as reported for the USA.

WHOLESALE RATES FALL
The local swap rates fell -5 or -6 basis points today across the curve following the trend on Wall Street on Friday. The curves are still marginally positive, although Westpac is picking inverted rates for possibly as long as one year, before reverting to a long positive trend. The 90 day bank bill rate dropped -2 bps today to be at 3.65%.

NZ DOLLAR LOWER
Check our real-time charts here. The NZ dollar was lower again today falling until about 1pm then staging weak rebound. It is still lower than where it started when it opened this morning. Having said that, it has still done better than the Aussie. It is now at 74.4 USc, at 94.2AUc, and the TWI is now at 77.8. Against the US dollar this is the lowest we have been since December 2010.

You can now see an animation of this chart. Click on it, or click here.