A review of things you need to know before you go home on Friday; no rate changes, big trade deficit, more HNZ houses, new Aussie PM in spite of Murdoch manipulation, swap rates lower, NZD lower

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

MORTGAGE RATE CHANGES
No changes to report again today.

TERM DEPOSIT RATE CHANGES
None here either.

BIGGER, BUT IS IT BETTER?
In the year to July, our merchandise trade balance was a deficit of -$4.4 bln. This is the largest annual deficit since March 2009. It has grown quickly in 2018, rising from an annual rate of -$2.8 bln in the year to December 2017, a deterioration of more than -50% in just seven months. Exports rose +11.3% in that July year, imports rose +12.9%. Our exports to China were up +20.5%, those to the US up only +1.6%. Our imports from China rose +9.9%, those from the US were up +13.0%. We ran a +$1.3 bln trade surplus with China, a +$1.0 bln surplus with Australia, a -$1.1 bln deficit with the US, and a -$1.0 bln deficit with Japan. Our surplus with China grew from +$0.2 bln in the prior year to July. Our deficit with the US also grew.

A MATHS QUESTION
The 67,300 Housing New Zealand house stock is set to grow by another 6,400 over the next four years, or a growth rate of +2.3% per year. The Auckland inventory of 30,772 is to grow at the rate of +2.8% pa. The overall funding involves $1.1 bln from taxpayers and $2.9 blm from new borrowing. That works out to an average cost of $625,000 per new residence, nationwide. If that is HNZ's average cost, it does beg the question about how KiwiBuild houses in Auckland can be delivered for a similar amount, including builder's margin. No details were released on the cost to HNZ for the Auckland additions.

DASHBOARD UPDATE
The RBNZ has updated its Dashboard which allows us to update our Key Bank Metrics tool. This is the one where you can check individual bank data and benchmark your bank over a very wide range of metrics against any other bank you choose. Raise any questions in the comment thread below.

HOLE INTO WHICH WE POUR MONEY
Under the radar, today KiwiRail reported another gigantic loss. The SOE had a net loss of $235.9 mln in the year to June, 20% higher than the loss of $197.3 mln in the previous year. Becuase it can't generate sufficient earnings to support its level of investment it needs to keep on writing down its assets, incurring another $249 mln in annual impairments. Despite all this, it is talking itself up.

MORRISON, PM
The new Prime Minister of Australia is Scott Morrison, the previous Treasurer. He beat conservative Peter Dutton 45-40 in the final ballot. The Aussie dollar rose on the news. At least the party has pushed back against the Murdoch attack dogs (Hadley, Jones, Credlin) this time, but they are sure to try again. Morrison wasn't his/ their choice.

SWAP RATES LOWER
Wholesale swap rates are down -1 bp for durations of 2 to 10 years. The UST 10yr is still up to 2.83%, a gain of +1 bp. But the UST 2 yr has gained even more, pushing the US 2-10 curve down to just under +21 bps, another 11 year low. It is a major worry that this curve is falling quickly again. The Aussie Govt 10yr is at 2.54% (up +1 bp), the China Govt 10yr is at 3.63% (down -2 bps), while the NZ Govt 10 yr is now at 2.60%, down -1 bp. The 90 day bank bill rate is unchanged at 1.91%.

BITCOIN TURNS
The bitcoin price is up today at US$6,505 a +1.8% rise from this time yesterday.

NZD SOFTER
The NZD is softer today against the USD at 66.4 USc. On the cross rates we lower against a stronger Aussie dollar at 91.2 AUc after the leadership change there, and 57.4 euro cents. That puts the TWI-5 at 70.2.

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