A review of things you need to know before you go home Wednesday; SBS Bank trims a rate, jobless rate falls, participation rate heroic, labour penalties high, housing market cools, rents unchanged, swaps rise, NZD firms

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

MORTGAGE RATE CHANGES
No changes reported today.

DEPOSIT RATE CHANGES
SBS Bank reduced its headline 7 month TD rate today to 3.30%, a -35 bps cut. Perhaps that is in anticipation of a new TD 'special' for a different term?

BEST IN NINE YEARS
Today's headline is that the unemployment rate fell to 4.6%, its lowest since late-2008. Construction jobs were up +10% from a year ago. Wages were boosted by the Government accepting the pay equity deal. The working-aged population rose by +87,600 in the year to September, but the number of people employed rose by +102,700 in the same period. +41,100 of those were aged 25 and under, and +36,100 were aged 55 years and over. There was a good rise in hours worked as well. The participation rate leaped to a very impressive 71.1% which is miles higher than for other countries we reference ourselves with. Average ordinary time hourly earnings also rose, by +2.2% to $63,336 pa.

UNDERPAYING STAFF COSTS
A Labour Inspectorate investigation uncovered employment breaches in a series of connected Asian restaurants in Auckland, who now must pay nearly $200,000. The Employment Relations Authority ordered the restaurants to pay $99,000 in penalties for failing to provide minimum wage and correct holiday pay, as well as $97,000 in arrears to 132 employees.

MARKET COOLING BITES
The housing market could be in for a difficult summer, particularly in Auckland. New listings on Realestate.co.nz are well down on a year ago, but unsold stock is up in Auckland, Waikato, Wellington and Canterbury.

HOLDING HIGH
Rent levels are little changed in October. Essentially for a 3 br house in Auckland they are stable and near their highs (which was in May), In Wellington they are high and still near their April peak. And in Christchurch, they are still slipping and a long way lower than their peak first reached in February 2014.

A BETTER WAY FORWARD?
The NZIER is calling on the new Government to shift the RBNZ's focus from inflation targeting, to targeting nominal GDP growth. But that will mean the RBNZ will need the Government to be its 'mate'. 

'A SIGNIFICANT TURN OF EVENTS'
The Sydney housing market is now past their peak and falling. Prices there fell -0.6% over the quarter and were down -0.5% over the month. It marks the first rolling quarterly fall in Sydney since May 2016 when the first round of tighter borrowing requirements were still working their way though credit policies. It is the second month in a row Sydney prices have faltered after they slipped -0.1% in September.

A NEW RISING TIDE?
Here is something I wasn't expecting: more than half the babies born in China in the first eight months of 2017 were second children. Some 52% of the 11.6 mln babies born between January and August have an older sibling, according to official figures. That compares to about 45% in 2016, when 18.5 mln babies were born in hospital, the highest since 2000, according to the data.

WHOLESALE RATES TURN UP
Swap rates are moving back a little higher today after a few days of declines. This trend mirrors the US Treasury yields. The two year is up +2 bps, the five year is up +3 bps and the ten year is up +3 bps. The 90 day bank bill rate is unchanged at 1.94%. Markets are now waiting on tomorrow's RBNZ MPS signals.

NZ DOLLAR INCHES HIGHER
The NZ dollar has firmed over the past 24 hours, not by a lot, but across the board so it is now at 68.8 USc. On the cross rates we are at 89.9 AUc and recovered to 59.2 euro cents. The TWI-5 is still at 72.1. The bitcoin price has held above over US$6,000 again, and now it is at US$6,126, a +1.6% gain on the day.

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