A review of things you need to know before you go home on Tuesday; NZCU Baywide cuts TD rates, dairy futures sink, China growth sags, QSBO rises, tourism strong, swaps lower, NZD lower

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

TODAY'S MORTGAGE RATE CHANGES
No changes to report, so far.

TODAY'S DEPOSIT RATE CHANGES
NZCU Baywide reduced some TD rates today.

IT COULD BE UGLY
The signs are not good for tomorrow morning's dairy auction. Trading on the dairy futures market today points to a bigger fall than was indicated just a few days ago.

NOT AS BAD AS SOME FEARED
Growth in the Chinese economy was reported at +6.8% pa for Q4, marginally below analysts expectations. Chinese retail sales were up +11.1% pa in December, also marginally less than analysts forecasts. But these are still solid results and the NZD rose on the news as did the Shanghai stock indexes. However things turned more negative when it was realised that the +6.8% growth number is their lowest in 25 years. Even Shanghai stocks could not hold their gains.

'REFRESHINGLY UPBEAT'
The NZIER's Quarterly Survey of Business Opinion (QSBO) rebounded from four year lows in the December quarter. Businesses increased hiring and a few pushed through price increases. In fact, capacity utilisation rose to its second highest level on record. These results are consistent with Q4 GDP growth of +3% and confirm other similar surveys (eg ANZ's Truckometer). It also suggests we will have a solid start to 2016.

A SECTOR ON THE RISE
National guest nights for November 2015 were +4.6% higher than the same month a year ago, Statistics New Zealand said today. The South Island is leading the way in the tourism stakes, where the Otago region had the largest increase in guest nights, boosted mainly by Queenstown and Wanaka.

RBA SEEN CUTTING
Market contagion from China and low energy costs are expected to weigh on the Australian central bank, pushing it to cut its policy rate. According to interest rate futures pricing, the chances of a cash rate cut to 1.75% from the current 2% have jumped to a certainty this week, up from 50% late last year. And don't forget, Aussie headline CPI inflation was last reported as +1.5% pa. The RBNZ makes a rate decision in the final week of January.

WHOLESALE RATES DOWN AGAIN
Swap rates fell today by about -2 bps across most terms, but not the one year. But it is worth noting that the one year swap rate is now at a 3 year low. The 90 day bank bill rate is down -1 bp to 2.74%. (And a technical note for those who follow such things: we have rebased our CDS spread chart series to the updated iTraxx set.)

NZ DOLLAR HOLDS
The New Zealand dollar has held it lower levels today, dropping after the Chinese GDP data was released. It is now at 64.3 USc, unchanged against the Aussie at 93.8 AUc, and is down at 59 euro cents. The TWI-5 is now under 70. Check our real-time charts here.

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