A review of things you need to know before you go home on Thursday; Westpac & ICBC raise TD rates, GDP growth surprises, productivity up, TWG reports, NZGB yields rise, swaps and NZD rise

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
Westpac raised its 9 month rates by +10 bps to 3.40%. ICBC raised all its rates by +5 bps across the whole term range. ICBC now has rates of 4% or higher for terms of 3 years and longer, one of the very few banks to offer this.

HEALTHY GROWTH SURPRISE
To nearly everyone's surprise (but perhaps not the Prime Minister who seemed to have signaled advance notice), our June quarter GDP surged +1% against expectations of +0.8% rise, its biggest q-on-q biggest rise in 2 years. Real GDP is now +3.1% higher in Q2-18 than Q2-17. For the full year to June 2018 we are +2.9% higher than the full year to June 2017. On this basis, the rises is similar to that posted by the US recently, but a bit less than the Aussie equivalent result. The size of the rise means OCR cuts may now be off the table. And the report failed to justify the deterioration in business confidence (at least not yet) (H/T Kiwibank economists.).

PRODUCTIVITY RISING
In the year to June, as reported above, GDP grew +2.9%. However, as previously reported in the HLFS survey, payroll hours grew +2.4% in the same period. That means labour productivity was up +0.5%, the fourth consecutive quarterly rise. Per capital GDP rose as well.

LOOKING FOR 'FAIRER TAXES'
Tax Working Group interim report was released today and the Cullen-led body says work on capital income 'not yet complete'. But taxes on capital gains are clearly signaled and they gave two options. But they also said it is not recommending either wealth taxes or land taxes.

HE GETS JAIL, SHE GETS HOME DETENTION
A Christchurch real estate agent has been sentenced to seven months’ home detention and 200 hours of community work on charges brought by the Serious Fraud Office. She benefited from a fraudulent scheme involving 13 properties and $300,000 in commissions. It was a scheme with her husband and he has already been sentenced to jail for his part in the fraud.

YIELDS FIRM
The latest NZ Govt bond tender for $150 mln received bids totaling $431 mln. The yield rose from 2.89% in the equivalent August tender, to 3.00% in today's tender. These bonds mature in 2037, so are ~20 yr durations.

GREENER
Renewable energy production hit a 37 hear high in the June quarter. This accounted for 85% of electricity generation, up from 79% in the same quarter a year ago. Hydro was up +13%, wind was up +12%, and non-renewable sources were down -27% from the same quarter a year ago. All this was despite national electricity demand being unchanged for the quarter compared to the same period last year.

SWAP RATES RISE SHARPLY & STEEPEN
Swap rates rose and steepened again today and the rises have been chunky. The 2 yr rate rate is up +4 bps, and all longer rates are up +5 bps. That puts the swap 2-10 curve up at +90 bps and its steepest in six weeks. The UST 10yr is also rising, now at 3.06% with the UST 2-10 curve now just over +27 bps. The Aussie Govt 10yr is at 2.72% (up another +2 bps), the China Govt 10yr is at 3.69% (up +1 bp), while the NZ Govt 10 yr is at 2.70%, and up +2 bps. The 90 day bank bill rate is unchanged at 1.89%.

BITCOIN FIRMS
The bitcoin price is marginally higher today at US$6,390, a +1.0% rise from this time yesterday. But a few hours ago, things got very volatile when on one market a futures contract expired. That exposed the thinness of this market, and the ease with which a few larger trades can knock it around - an event bad people will have noticed.

NZD UP
The NZD is solidly higher today after the GDP result. It gained +50 bps and now trades at 66.5 USc. On the cross rates we are similarly higher at 91.6 AUc, and at 56.9 euro cents. That puts the TWI-5 at 70.2 and over 70 again for the first time in three weeks.

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