A review of things you need to know before you go home on Wednesday; TD rate changes, catastrophe bonds issued, Councils score 7% more revenue, factories struggle, swap rates fall, NZD rises

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

TODAY'S MORTGAGE RATE CHANGES
No changes today.

TODAY'S DEPOSIT RATE CHANGES
Both Asset Finance and Heartland cut some term deposit rates today, although Asset actually increased its five year rate - to 6.3%.

BIG CHEESE
Fonterra opened its expanded cheese facility at Eltham in Taranaki today. From this plant it can now make enough cheese for 3 bln cheeseburgers per year. (But as impressive as that is, McDonalds makes 25 bln of them alone, worldwide. And they have 'only' a 17% market share.) So by my calculations, this Eltham plant makes about 3% of the cheese used in the world's burgers.

BUYER BEWARE
IAG announced today that it has issued $350 million of unsecured, subordinated, convertible notes at a rate of 5.15% pa. I just hope investors know what they are getting into with these things. If IAG gets into trouble, these bonds could well become essentially worthless and will be compulsorily converted into 'equity' just at the time their 'equity' has vanished. They do not rank as a bond in the usual way you think about these things; they are subordinated to everything. Make sure your 'professional manager' did not load your fund up with them, KiwiSaver or otherwise.

BIG 'INVESTMENT'
The Government has launched a 15 year program to modernise the Defence Force. The expected cost is stated to be almost $20 bln.

3 MORE TOURISM PROJECTS
Three more regional tourism projects were funded today by the Government. Today's projects included $250,000 to Wildwire Wanaka for the extension of a climbing route equipped with fixed ladders that will soar to the top of a 700m twin waterfall based in Wanaka; just over $320,000 for the establishment of night-time light show, suspended among trees in Rotorua’s iconic Redwood Forest; and $150,000 for Queenstown Resort College to expand its Ambassador Program to a further 10 regions beyond Queenstown and Wanaka. This brings the total to 25. The Government has seeded $15 mln in total to support $45 mln contributed by the private sector.

ASIC SUES NAB OVER ALLEGED RATE RIGGING
The Australian Securities and Investments Commission has launched legal proceedings against BNZ's parent National Australia Bank alleging "unconscionable conduct and market manipulation" in relation to NAB's involvement in setting Australia's bank bill swap reference rate (BBSW) between June 2010 and December 2012. ASIC alleges NAB traded in a manner intended to create an artificial price for bank bills on 50 occasions. NAB's chief risk officer David Gall said the bank does not agree with ASIC's claims. NAB is the third bank targeted by ASIC this year over alleged rate rigging, following ANZ and Westpac.

A GOOD BUSINESS (MONOPOLIES)
Local Authority revenues from rates and 'regulatory income' (ie fines and fees) were up +7% in the year to March, according to data released by Statistics NZ today.

TOUGHER IN THE COMPETITIVE SECTOR
In contrast to the rise in Council revenues, factory sales were down -0.9% in the same period, led by a fall in meat and dairy product manufacturing. Apart from those two, overall factory sales were up +0.7%.

OUCH !
Residential home lending fell -1.8% in April in Australia. For "investment housing" the decline was a steep -5.0%.

JAPAN GROWS
Japan published its Q1 2016 GDP growth data today and that rose +1.9%, which is a creditable result and maybe a surprise given the usual narrative of "Japan is in the dumps".

SWAP RATES STEEPEN, SORT OF
Today brought a small steepening of our wholesale rate curve. One, two and three year terms fell -2 bps while five years fell -1 bp and ten years rose +1 bps. NZ swap rates are here. The 90-day bank bill rate fell -1 bp to 2.36%. Essentially, the markets have no idea about the stance the RBNZ will take tomorrow. Just one day out they are only pricing in a 35% chance of a cut; most money is on a hold.

NZ DOLLAR FIRMS
The currency markets seem more certain about 'no-change' tomorrow bidding up the Kiwi dollar slightly today. Is now at 69.8 USc, at 93.7 AUc, and 61.4 euro cents. The TWI-5 is now at 72.9. Check our real-time charts here.

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