A review of things you need to know before you go home on Friday; some small TD changes, confidence slips, housing consents up, what election uncertainty cost, debt growth, swaps down again, bitcoin drops, NZD holds

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

MORTGAGE RATE CHANGES
No changes today.

TERM DEPOSIT RATE CHANGES
FEI trimmed its one year term deposit rate offer. Westpac has also trimmed its Notice Saver from 2.80% to 2.65%, a -15 bps slice.

DECIDEDLY AVERAGE
Consumer confidence slipped slightly in June, bringing it to its lowest level in almost two years. It is still positive however and close to its long-run average, but the recent trend is down with the June result being -10 index points below just before the 2017 General Election. ANZ reckons the combination of negative business confidence and positive consumer confidence points to stunted growth prospects of about +2% pa. The ANZ-Roy Morgan survey tracks and reports its results monthly.

OK NOW, CONCERNED ABOUT THE FUTURE
Employment confidence as reported by Westpac-MM for the June quarter is showing a rise from the March quarter. In fact it is up to its highest level since 2008 (which has been true for more than a year). Workers are reporting that jobs availability has continued to improve, and that they are feeling more secure in their jobs. However, there is some nervousness about job opportunities over the coming year. The number of households who reported receiving a pay rise last year remains low. In addition, households remain pessimistic about the outlook for earnings growth.

THE BEGINNING OF THE END?
Although they were tame for most of New Zealand, new dwelling consents issued were at a 15 year high in Auckland in May. This surge could be the beginning of the end for the region's housing shortage as at this level they are about equal to the household growth levels. In the year to May, only 47% of consents were for houses, the lowest on record. Consents for apartments are now up to 24% while those for townhouses are up to 22%. The rest are for retirement units (and these are a stable proportion at levels we have been seeing for a decade or so).

CHEAPER RENOS
Meanwhile the same consent data shows that we are doing more residential alteration projects (that require a consent), up more than +11% in the year to May. But we are doing cheaper renos, with the total value up only +7%, meaning the average reno value is down -4%. In Auckland - the total numbers are up +4.4% on the same basis while the total value is up +9.6% (and the average value is up +5%).

LUMPY, BUT UP
The value of non-residential building consents issued continues to push higher although approvals are very lumpy. The year to May brought a record annual rate of $6.8 bln, up that is up only +4% on the year to May 2017. They have grown in every month but two for the past six years on this basis despite the lumpyness. Non-building consent growth is even lumpier. It is up +5% on this same basis, but has only grown in 43 months in the same six years.

WHAT CONFIDENCE COSTS
The scale of election year uncertainty by business and their decisions to invest was revealed today. In 2017, total business assets only grew by +2.7%, far below the +6.1% and +6.2% of the prior two years. That means we missed out on about $65 bln in investment in 2017. The more crucial fixed asset investment levels were less pronounced; in 2017 the growth was +5.8%, again well below the 2015 increase of +8.6% but above the 2016 increase of +5.0%. We didn't miss out on any GDP growth in 2017, so working existing assets harder did mean returns rose, and return on assets is now up to +4.4% pa its highest level since 2009 when this data was first collected. If modernisation slips behind however, it will be hard for returns to stay elevated.

THE DEBT APPETITE CHANGES
Debt growth in housing is still growing +5.9% according to May RBNZ data out today. That is unchanged from April. But growth is weakening for personal debt (now up +6.4% but lower than +7.2% in April, and for rural debt which is up just +2.5%. The one area where debt is now starting to grow faster is business debt to banks which is up +5.3% in the year to May, up from +4.1% in the year to April (but remember, a couple of big deals could distort this, or a switch from listed debt to bank debt could do the same).

STANDARDS, FINALLY
The Government is moving to clean up the dodgy receiver and liquidator industry following cases where providers of insolvency services fall well short of the standards of integrity and skill the public is entitled to expect. And there is evidence some liquidators fail to protect the interests of creditors, for example, by turning a blind eye when directors have taken assets out of the company under value prior to liquidation. New requirements to be licensed to operate in any area of insolvency administration.

HARMONEY APPEALING
Harmoney is appealing a recent High Court judgment that went in favour of the Commerce Commission at the peer-to-peer lender's expense. Justice Patricia Courtney ruled that Harmoney's platform fee is a credit fee as defined in Section 5 of the Credit Contracts and Consumer Finance Act.

GOING UP
In Australia, major banks are tipped to impose out-of-cycle rises to variable mortgage rates by September, as funding costs rise, partly due to rising risks emanating from their Royal Commission.

BENCHMARK INTEREST RATES DOWN AGAIN
Local swap rates are lower again today. The two year is down -3 bps, the five year is also down -3 bps, and the 10 year is down -1 bp. The UST 10yr is now at 2.85%, up +1 bp. The Aussie Govt 10yr is at 2.65, up +2 bps, the China Govt 10yr is at 3.54% (down -4 bps), and the NZ Govt 10 yr is at 2.89%, up +1 bp. The 90 day bank bill rate is unchanged at 2.00%.

BITCOIN DOWN
The bitcoin price is now at US$5,851 and down -4% than at this time yesterday. We are now at its lowest level since October 2017 and the 2018 value has now fallen by -US$7,750 or -56%. It is well in bear territory with the price now -38% below its 200 day moving average. It has been like that since mid April, but it is now getting serious.

NZD HOLDING ON
The NZD is little changed today and now at 67.7 USc. On the cross rate we are lower at 91.7 AUc and 58.2 euro cents. That has the TWI-5 at 71.2.

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