Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
No changes to report today.
TERM DEPOSIT RATE CHANGES
None here either.
OUR CANARY IN THE MINE
Our annual migration gain is still at historically high levels but easing back quickly compared to the last two years, and since new rules were added in July 2017. Net migration between Australia and New Zealand switched later starting in January this year, with the number of people leaving for Australia exceeding the number of people coming from Australia, a shift starting just after the 2017 election. Six years ago, the net outflow from New Zealand to Australia almost hit -40,000 people; in July 2018 the rate was only -1,000 . Watch these figures carefully as more New Zealanders moving overseas (usually to Australia) can quickly reduce net migration.
GLOSS OFF I
Tourist arrival numbers edged up between June and July and were +1.4% higher than July a year ago. There is a slowdown in underlying growth in the tourism sector, even if the headline annual growth rate is still being dampened by the lingering effects of last year’s British and Irish Lions tour, says Infometrics.
A JOLT LOWER
A sharp reduction in Chinese buying power has resulted in a big drop in prices for export logs, even as Chinese log stocks reduce. There are lower prices flow from India too
GLOSS OFF II
New data out from the RBNZ shows that the peak seems to have passed with credit card debt growth, even if it is still cyclically high. The peak was in March and there has been a waning since then. Now only a bit over 61% of all of this debt atrracts interest, the second lowest proportion ever.
CONCENTRATION AT THE TOP
As at June, the total value in all KiwiSaver funds rose to $52.3 bln. The largest fund (contributions plus gains) was ASB's Conservative default fund now worth $3.6 bln and rolling up 7.0% of all funds in the system. The top ten KiwiSaver funds now encompass $20.5 bln in assets, or almost 40% of all funds; the top 20 exceed $30.4 or 60% of the 248 funds in the system. This all grew from 2007. To put this in perspective, the NZ Super Fund is currently worth just on $40 bln after a 2001 start (although to be fair, it had to grow its FUM without new contributions for eight years).
SOCIALISING PRIVATE LOSSES
The Government has announced it will pay out the 2007/08 rateable value for all uninsured homes in Christchurch, or buy them at those pre-quake values. The new precedent seems to imply you will get paid out even if you don't bother insuring. Moral hazard.
A BRAINY MERGER?
The Government has welcomed a prospective merger between Lincoln and Canterbury Universities. Both parties are expected to submit their formal proposal by the end of 2018.
SWAP RATES LOWER
Wholesale swap rates are down -1 bp across the rate curve again. The UST 10yr is lower at 2.83%, down -3 bps after Donald Trump reportedly criticised the US Fed in a party fundraising event for trying to raise interest rates. That has had the effect of making investors more risk averse and raising bond prices. The Aussie Govt 10yr is at 2.53% (unchanged), the China Govt 10yr is at 3.67% (down -2 bps), while the NZ Govt 10 yr is now at 2.56%, down -4 bps. The 90 day bank bill rate is unchanged at 1.90%.
BITCOIN DOWN
The bitcoin price is now at US$6,310, down -3.3% from this time yesterday.
NZD FIRMER
The NZD is a little firmer against the USD at 66.5 USc toady. On the cross rates we are marginally softer at 90.5 AUc and 57.7 euro cents. That puts the TWI-5 at 70.2.
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