A review of things you need to know before you go home on Wednesday; BNZ trims mortgage rates, retail sales growth holds, guest nights grow, regulators take on the loan sharks, swap rates unchanged, NZD firmer

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

MORTGAGE RATE CHANGES
BNZ today reduced its 2yr 'special' to 4.29%, mid-pack. It also reduced most of its standard rates, again to unremarkable levels.

TERM DEPOSIT RATE CHANGES
No changes here today.

RETAIL SALES GROWTH AVERAGE
Stats NZ headlinded its release as the "largest quarterly percentage lift in retail card spending since 2010". And it was for the quarter to September. But really, all that is because spending on petrol leaped, juiced along by big tax increases in Auckland, and higher prices due to a falling currency. But looking at the data without petrol, the rises were quite normal, up +4% year-on-year. Petrol was up +12%. One 'positive' is that the extra $200 mln being spent on petrol isn't restraining other spending yet. Hospitality spending in September was up more than +7% compared with the same month in 2017.

TICKING HIGHER
Growth in the tourist accommodation industry has been hard to find recently, mainly in the shadow of a banner 2017. But even though August is in the depths off the offseason, a spark back to life was seen with total guest nights up +3.4% year-on-year and the best rise since March. The average occupancy rate was 36.4%, the best August ever. The areas with the strongest growth in guest nights in the past year were Christchurch, Queenstown-Lakes, and Rotorua. Auckland region’s guest nights fell -1.4% following a record August 2017 year.

COST OF DOING BUSINESS
Today saw some regulatory action aimed at the personal loan industry, and especially the loan shark end. And the Commerce Commission has issued a warning to Rapid Loans NZ Limited about a loan it issued to a vulnerable borrower. It failed to comply with the lender responsibility principles set out in the Credit Contracts and Consumer Finance Act, according to ComCom. Rapid Loans NZ is a division of a Gold Coast company formed by ex-managers of Cash Converters. We plugged a $1000 loan into their on-line calculator, with weekly repayments over 3 years. The effective cost of debt for the loan is 93.6% on a per annum basis. It will be debatable how effective 'warnings' are when the incentive for the lender are so high. "Cost of doing business."

LOWER MILK PRICES FOR FARMERS
Fonterra says it's now forecasting a milk price for farmers this season of between $6.25 and $6.50 per kilogram of milk solids, down from its previous forecast of $6.75. International supply growing faster than international demand is a key reason. Compare all dairy companies here. Today's dairy derivatives market indicates that WMP prices may fall -1.1% at the next auction next week.

THE COST OF H&S
The Commerce Commission today filed civil proceedings in the High Court at Auckland seeking financial penalties against electricity lines company Vector for breaching its network quality standards. These arose from outages during 2015 and 2016 storms and Vector's decision to prioritise safety of its people by avoiding working on live lives wherever possible, which led to extended outages. Vector is now seeking to get the standards it works to modified because it doubts it can continue to meet them. It seems to be caught between liabilities of H&S legislation, and community standards for recovering from storm outages.

REBOUND
In early trading today, both the Hong Kong and Shanghai stock markets are up strongly, each gaining about +1%. The NZX will likely close down about -0.3%.

SWAP RATES UNCHANGED
Swap rates are virtually unchanged today. The UST 10yr lower at 3.21% with the UST 2-10 curve narrowing -4 bps to +32 bps. The Aussie Govt 10yr is at 2.76% (down -1 bp), the China Govt 10yr is at 3.66% (unchanged), while the NZ Govt 10 yr is at 2.70%, and up +3 bps. The 90 day bank bill rate is up +1 bp to 1.89%.

BITCOIN UNCHANGED
The bitcoin price is now at US$6,594 and down less than +1%.

NZD FIRMER
The NZD is firmer again today, now at 64.9 USc. On the cross rates we are also firmer, even if marginally, at 91.2 AUc, and 56.4 euro cents. The TWI-5 is up to 69.

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