A review of things you need to know before you go home on Friday; Westpac cuts a mortgage rate, Harmoney raises most rates, cuts a fee, used car imports fall, new bond issues, swaps slip, NZD rises

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

MORTGAGE RATE CHANGES
Westpac has cut its two year fixed 'special' rate by -10 bps to 4.55% and matching ANZ, but still higher than BNZ or Kiwibank for that fixed term. Clearly it could not hold the old higher rate, given the competitive positioning of its rivals.

TERM DEPOSIT RATE CHANGES
No changes to report.

HARMONEY RAISES RATES
Peer-to-peer plaform Harmoney is raising interest rates and cutting its Platform Fee. Their interest rate on a loan is both the interest rate paid by Borrowers and the gross interest rate due to Lenders. Their grade A1 rate is unchanged at 6.99%, their B1 rate rises by +90 bps to 13.39%, C1 rises by +241 bps to 18.90%, D1 rates rise by +421 bps to 24.70%, E1 rates rise by +300 bps to 26.99% and their F1 rates rise by +136 bps to 28.99%. The Platform Fee paid by borrowers falls by -$50 to $450 (and is renamed an Establishment Fee). Lenders are charged a Service Fee of 1.25% p.a. of the principal and interest payments collected on each note. This fee is unchanged. Their changes are effective May 8, 2018.

WARNING SIGN
The shift lower in business confidence, and the more recent sagging of consumer confidence is taking its toll on car sales. We have earlier reported a -2% fall in new car sales. Now we have the data for used imports and they are down another -13% April-on-April on top of the -18% fall March-on-March. This may be signaling that the confidence headlines are shifting from 'business' to 'consumers'. Border control of stinkbugs might have something to do with the shift, but it is unlikely to be the key impulse here. Look at the chart, it has been downhill since November and we are now back to import levels we last saw in 2014. In fact, this is the largest 6 month decline since 1991 - it didn't fall this fast even in the GFC.

NAB ADDS CAPITAL TO BNZ
BNZ is about to issue NZ$500 mln of convertible subordinated unsecured notes to their parent National Australia Bank. These Notes are intended to qualify as Tier 2 Capital of BNZ for New Zealand regulatory purposes.

NEW CORPORATE BOND ISSUE
Christchurch International Airport is about to offer of up to $100 mln of 6 year, unsecured, unsubordinated, fixed rate bonds maturing on 24 May 2024. The expected credit rate is BBB+.

HANGING IN THERE
There is a small ray of improvement in the Chinese services sector. The Caixin services PMI expanded slightly faster in May to an index value of 52.9 (50 is neutral. The NZ services PSI is at 58.8.) But a dig deeper into the China components shows an underbelly of weakness still very present. This services sector assessment follows a tame-to-weak factory PMI.

TRUCKING ALONG OK
The RBA issued its May Monetary Policy Statement today. Essentially, it raised its view on the inflation outlook saying inflation "has troughed" and will pick up from here, and lowered its jobless rate forecast on healthy jobs growth as firms tell them they expect wage growth to pick up. The New Zealand MPS from the RBNZ is due on Thursday. It is not expected to be any more exciting than the Aussie one.

EXTRAORDINARY PAY
The CEO's of the large Aussie banks are paid a lot. Figures of over AU$5 mln in salaries and bonuses are usual. But none of this compares with the pay packets at Macquarie Bank, their other very large financial institution. Today they reported that the top ten executives were paid almost AU$120 mln last year. It is easy to see why Macquarie is known as "the millionaires factory". Their dividend was AU$1.65 bln for a bank that has AU$191 bln in assets and reported tax-paid profits of AU$2.5 bln (and far smaller than each of the four pillar banks).

MORE DETAIL
We have updated the price detail for log prices, to include monthly history back to 2014.

BENCHMARK INTEREST RATES FALL
Local swap rates repeat their yo-you swings. Yesterday it was steeper, today it is flatter. The two year is down -1 bp, the five year is down -2 bps, and the ten year is down by -3 bps. The UST 10yr yield is at 2.95%, down -3 bps. The Aussie Govt 10 yr is now at 2.78% (down -3 bps). The China 10 yr is at 3.68%, up +1 bp. The NZ Govt 10 yr is down -4 bps at 2.81%. The 90 day bank bill rate is unchanged at 2.03%.

BITCOIN UP
The bitcoin price is now at US$9,628 which is up +4% from this time yesterday.

NZ DOLLAR UP
The NZD is higher at 70.5 USc. We are also higher on the cross rates where we at 93.3 AUc, and up at 58.8 euro cents. That has the TWI-5 now at 72.8.

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