A review of things you need to know before you go home on Monday; Kiwibank reverts, ANZ profits hit, Shanghai lower, infrastructure coordination, swaps higher & steeper, NZD down again

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

MORTGAGE RATE CHANGES
Kiwibank has ended its 4.19% offer for two years fixed, reverting back to a 4.39% rate.

TERM DEPOSIT RATE CHANGES
No changes here today.

A BIG HIT, BUT NO STAGGERING I
In Australia, the "fee for no service" scandal and evidence of "customers receiving inappropriate advice" will carve AU$374 mln out of ANZ's full-year cash profit. Actually, Hayne Commission issues will cost the bank AU$491 mln but some of that relates to a division they sold earlier, so the ongoing impact will be less. In addition, they are having to speed up depreciation charges because some software costs were being recovered by divisions they have since sold. That will see another AU$206 mln charge. All up, ANZ Group took a writedown of almost AU$700 mln today (NZ$760 mln.) Given ANZ NZ will contribute about NZ$1.9 bln tax-paid to their Group result, this equivalent wiping out a bit more than a third of the Kiwi 'contribution' (all ANZ's profits in the Auckland region?). However, the impact of these additional charges on ANZ’s Common Equity Tier 1 capital position is expected to be less than -10 basis points. Still, ANZ's shares dropped about -2.5% on the news.

A BIG HIT, BUT NO STAGGERING II
The Shanghai stock exchange index opened today down -2%. Since then it has moved lower and now is down -3% halfway through their morning session. Hong Kong has opened down -0.8% after falling -4% last week. Shanghai circuit-breaker mechanisms, which used to cut in at -10%, are apparently suspended but authorities will be on high alert for negative trading. It might even offend Party rules. But perhaps the sudden and large relaxation of bank reserve ratios has helped stem the losses.

CHALLENGING THE STEREOTYPING
Researchers from the Australian National University compiled a new database on Chinese investment in Australia by crosschecking figures from sources such as the Foreign Investment Review Board and the Australian Bureau of Statistics. The details are revealed in the first comprehensive public database tracking the flow of Chinese foreign investment into Australia, which outlines who spent the money and what they spent it on. That shows Chinese investment in Australia dropped by -40% last year. It also showed that less than 20% of all foreign buyers of farmland were Chinese (and less than 1% of all farmland changed hands in 2017).

BETTER COORDINATION
Treasury is starting a public consultation for how our infrastructure is planned and delivered. It comes after concerns were raised that the existing process is ad hoc. Business groups have welcomed the potential of better coordination.

KEEPING IT CLEAN
Businesses that operate price comparison websites will be forced to clearly disclose any commissions or referral fees or kickbacks they receive, under a new package of consumer law reforms to be considered by the NSW State Parliament. (We operate one in New Zealand for interest rates, KiwiSaver, and rural prices. We charge a standard fee to include a logo on these pages; we have never taken referral fees or "kickbacks" of any kind.)

SWAP RATES HIGHER & STEEPER
Swap rates are up and steeper today. The two year is up +2 bps, the five year is up +3 bps and the ten year is up +4 bps. The UST 10yr is at 3.23% with the UST 2-10 curve pushing up to +34 bps. The Aussie Govt 10yr is at 2.78% (and up another strong +6 bps), the China Govt 10yr is at 3.65% (down -2 bps so far -  remembering these markets are five hours behind New Zealand), while the NZ Govt 10 yr is at 2.67%, and up +4 bps. The 90 day bank bill rate is down another -1 bp at 1.88%.

BITCOIN UNCHANGED
The bitcoin price is unchanged from this time on Friday at US$6,580. The 'fun' from volatility in bitcoin has disappeared.

NZD LOWER
The NZD is softer yet again, now at 64.3 USc. On the cross rates we are also lower at 91.2 AUc, and 55.8 euro cents. The TWI-5 is lower at 68.6 and its lowest since September 2015..

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