A review of things you need to know before you go home Tuesday; ASB cuts a key mortgage rate, QSBO slips, rents up, changing demographic profile, RaboDirect sells managed funds line, swaps and NZD slips

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

MORTGAGE RATE CHANGES
ASB has reduced its 1 year 'special to 4.39%.

DEPOSIT RATE CHANGES
No rate changes to report, but see the note on RaboDirect below.

'ELECTION JITTERS'
NZIER's quarterly survey of business opinion for September was lower, buffeted by election uncertainties said NZIER. Only a net +7% of respondents were more positive than those negative. However, hiring and investment plans remain positive. Businesses report increased difficulty in finding unskilled workers, while shortages for skilled labour remain acute. There are no implications for monetary policy flowing from this survey.

RENTS UP BUT VARY REGIONALLY
Rents for 3 bedroom houses rose nationally back to $430/week, a level first reached in March. That was driven by rises in Wellington which are up to $580/week, and near their all-time highs. In Auckland, those rent levels fell to $620/week from $640/week in May. In Christchurch the long decline continues, with September rents at $410/week, and down from the $450/week first reached in February 2014.

CHANGING DEMOGRAPHICS
Statistics NZ today released a range of estimates for population growth by our various ethnic groups. The broad Asian ethnic group’s share is projected to be higher than the Māori ethnic share by 2023, and is projected to be 22% of the total population by 2038. The Māori ethnic share is projected to rise to 18% by the same data to over 1 mln. Despite the ‘European' group’s population rising from 3.3 mln in 2013 to 3.6 - 4.0 mln in 2038, the ethnic share of this group is projected to fall from 75% in 2013 to 66% in 2038. Overall, our population is expected to rise to 5.8 mln in 20 years. Auckland's will be 2.2 mln by that time and be 47.6% 'European' by then, compared with 55.7% now. (It was 73% 20 years ago.)

NO-FEES WINS
RaboDirect is getting out of distributing managed funds. It has sold that part of its business to InvestNow. That pushes the funds under management at InvestNow up by around $125 million to $225 mln, a quick jump from its March 2017 launch. The acquisition means those invested in any of the 45 managed funds offered through RaboDirect will have the option of transferring to the InvestNow platform. While RaboDirect charged customers up to 0.75% on fund purchases, InvestNow doesn't impose any administration or transaction fees. Mike Heath, who set up RaboDirect's managed funds business in 2006, is now the general manager of InvestNow.

GROWING HEADROOM
The banking system's core funding ratio now stands at 86.8%. In the past year, loan and advances have grown by +$26.1 bln or +7%, whereas core funding has risen by +$27.2 bln or +8.6%. Each bank must stay above a 75% minimum. They are not even close to testing that limit. (However, bank funding maturity is still 80% less-than-one-year. In August, it slipped just below that level for the first time since March 2011.)

WHOLESALE RATES SLIP
Local swap rates are down -1 bps across the board today. The 90 day bank bill rate is also down -1 bp, to 1.94%.

NZ DOLLAR SOFT
The Kiwi dollar has slipped further today. The NZD is now at 71.8 USc. On the cross rates we are slightly softer at 91.9 AUc but we are up a bit at 61.3 euro cents, and up against the yen. The TWI-5 is now at 74.7. The bitcoin price is pretty much unchanged today and still at US$4,419.

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