A review of things you need to know before you go home on Monday; term deposit rate cuts, terms of trade high, core funding ratio high, China factories mark time, swap rates fall again, NZD slips

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
ANZ trimmed a range of rates. Details here. NZCU Auckland reduced some savings account rates. RaboDirect trimmed -10 to -15 bps from its TD rate offers for terms of 2, 3 and 4 years.

TERMS OF TRADE STILL HIGH
New Zealand's terms of trade improved in the June quarter and is just below its record high. The terms of trade measures the purchasing power of our exports abroad and is an indicator of the state of the overall economy. Export prices increased +0.6% more than import prices, led by dairy and meat products. Import prices rose led by crude oil prices. But the Marsden Point refinery was closed for maintenance for some of that period so volumes imported were sharply lower. Forward-bought petrol and diesel for the shutdown insulated us from the full crude oil price rise. But that will be a one-off.

'MORE LIQUID'
The average bank core funding ratio hit 88.7% in July, the highest for a July ever and the second highest month ever. Higher is better. Core funding is funding that can be expected to mature longer than in one years time and must always above 75% of all loans and advances. ANZ is 89.6%, ASB is 85.2%, BNZ is 87.0%, Kiwibank is 88.7% and Westpac is 84.7%. You can check where other banks score here, under the Liquidity tab.

CHINESE FACTORIES BARELY EXPANDING
In China, the private Caixin China General Manufacturing PMI slipped to 50.6 in August from July, marking the third straight monthly drop and its lowest level since June 2017. It has come in lower than analysts expected. The sub-indexes for new orders and output both expanded, with the former falling and the latter climbing. This showed cooling demand and strong supply existed at the same time across the Chinese manufacturing sector. This PMI reading is more cautious than the official Government one.

BIG ECONOMY, UNWANTED CURRENCY
Updated data on how widely the Chinese currency is being used in international transactions shows a small - a very small - rise in July from June. It is now used in 1.24% of all transactions, up from 1.10% in June. In July 2016 it was 1.38%. In the real world, few are willing to transact in the yuan. The USD is used in 42.63% of transactions, vs 42.39% in June. The EUR is used in 36.74%. The NZD is used in 0.34% and down from 0.45% two years ago.

CULTURAL MISUNDERSTANDING
China has retaliated against Australia for blocking Huawei and ZTE from supplying components to its 5G infrastructure. It has banned the ABC from being accessed in China. It is a decision that shows a remarkable ignorance on China's part of the place of public broadcasting in western countries.

LOWER PRICES, HIGHER INTEREST RATES
In Australia, house prices slipped in August for the 11th straight month. Losses in Melbourne steepened and Sydney remained weak. Things may even get worse given upward pressure on mortgage rates at most smaller banks, a trend now enveloping even the big banks now.

MARKING TIME
On a seasonally adjusted basis, Australian retail sales were unchanged in July from June, and that was well below expectations. The Aussie dollar briefly weakened on the news. Year on year, Australian retail sales are up +2.6% but CPI inflation is up +2.1%, making real growth a very paltry +0.5% pa. (In New Zealand to June, retail sales were up +3.8% while inflation was up +1.5%, for a real gain of +2.3% pa.)

CAUGHT!
Supermarket chains sourcing adulterated honey from imported sources has just been exposed in Australia. The practice relies on consumers and regulators neither complaining or testing. Anyone know of the New Zealand exposure to this?

SWAP RATES LOWER YET AGAIN
The two year swap rate is down -1 bp today. All longer durations are lower by -2 bps. The UST 10yr is unchanged at 2.86%. The UST 2-10 curve is just on +23 bps. The Aussie Govt 10yr is at 2.50% (down -3 bps), the China Govt 10yr is at 3.61% (down -1 bp), while the NZ Govt 10 yr is now at 2.54%, down another -2 bps. The 90 day bank bill rate is up +1 bp to 1.92%.

BITCOIN RISES
The bitcoin price is up +4.7% today from this time on Friday at US$7,266. But it is virtually unchanged from where we opened today.

NZD SLIPPING
The NZD is down a little more to just under 66 USc. On the cross rates we are holding at 91.9 AUc, and still just under 56.9 euro cents. That puts the TWI-5 at 69.8. Since the start of August, that is a -2.3% devaluation. Since the start of 2018 it is a -4.8% devaluation. Since the September 2018 election it is a -7.6% devaluation.

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