A review of things you need to know before you go home on Wednesday; Co-op Bank cuts mortgage rates, retail sales drop, renting gets tougher, less concrete poured, what we owe Australia, swaps up, NZD down

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

MORTGAGE RATE CHANGES
The Cooperative Bank reduced their 18 month fixed rate for Owner Occupiers by -4 bps, and their three year fixed rate by -10 bps. But that did not result in any market-leading rate positions.

TERM DEPOSIT RATE CHANGES
No changes to report here.

WHOA, WHAT HAPPENED?
Retail sales, as represented by electronic card transactions, took an unexpectedly large dive in April, one that has people scratching their heads. Retail card spending fell -2.2% from the prior month, following a rise in March, when adjusted for seasonal effects. Large falls in grocery and liquor retailing and in fuel retailing contributed to April’s decrease. Stats NZ said “The fall in retail card spending is unusually large. It was driven by a drop in sales of groceries and liquor, as well as an unexpected dip in fuel. The drop in fuel sales was unexpected because petrol prices rose as much as 9 cents a litre during the April month.” Year-on-year, the growth in the retail components are the lowest since 2009.

RENTING GETS TOUGHER
Rent rises outpacing wage growth in Auckland and Wellington but Canterbury renters are on the pig's back, according to our latest quarterly review of rents and incomes.

HOT DEMAND
The latest LGFA bond tender was for $150 mln over three durations and received bids for $512 mln. In the end a weighted average accepted yield was 3.39%. The early April tender achieved a weighted average yield of 2.92% even though the coverage ratio was lower.

LESS CONCRETE
Despite all the talk of big public infrastructure projects, the construction industry seems to be in a downward track with significantly less concrete being poured in the first quarter of 2018

AUSSIE IIP
Under cover of the dramatic resignations of five opposition MPs who can't meet their citizenship tests, and their 'sweet' pre-election Budget, Australia released data that shows they owe the world almost AU$1 tln, up +0.9% in a year. Investors from other countries are owed almost AU$3.2 tln (up +2.6%), while Aussies are owed almost AU$2.3 tln for their investments overseas (up +3.5%). New Zealand features because we owe them AU$103 bln for their investment here (NZ$110 bln), +5% more in a year. Almost NZ$35 bln of that (31.8%) is their investment in the four major bank's capital.

SIZE HAS ITS DISADVANTAGE IN THE DEBT MARKETS
An RBA research paper has found a significant inverse relationship between the cost of debt and corporate investment levels. The cost of debt for SME's hasn't fallen in the same way it has for major corporates, and that has held back SME investment, they found.

BENCHMARK INTEREST RATES SLIP
Local swap rates rose at the long end today. The 2 year is unchanged, the five year is up +2 bps, and the ten year is up +3 bps. The UST 10yr yield is up +1 bp at 2.97%. The Aussie Govt 10 yr is now at 2.75% (unchanged). The China 10 yr is at 3.66%, also unchanged. The NZ Govt 10 yr is unchanged at 2.78%. The 90 day bank bill rate is unchanged at 2.03%.

BITCOIN UP
The bitcoin price is now at US$9,438 which is up +2.3% today.

NZ DOLLAR LOWER
The NZD is -½c lower than this time yesterday, now at 69.7 USc, although most of the shift lower happened overnight. We are however unchanged on the cross rates where we at 93.6 AUc, and up at 58.7 euro cents. That has the TWI-5 at 72.5.

This chart is animated here. For previous users, the animation process has been updated and works better now.