A review of things you need to know before you go home on Friday; a few rate changes, chasing cheap money, scam alert, low NZD boosts online trade, consumers concerned, Fonterra trims payout, swaps lower, NZD stable

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

MORTGAGE RATE CHANGES
Kiwibank has advised that its 3.99% one year 'special' will end soon, reverting to 4.19% on Monday. Get in quick.

TERM DEPOSIT RATE CHANGES
TSB trimmed some rates today, following Kiwibank's minor changes doen a few days ago. But SBS Bank actually raised a nine month 'special' to 3.60%. Check the current state of play here.

CHEAP MONEY LURES
Cheap wholesale money doesn't just come from overseas investors. ASB said today it is likely to seek at least $100 mln in an unsecured unsubordinated 5 year note offer to institutional and New Zealand retail investors, and they will have the option to take unlimited over subscriptions. Given these types of bond offers cost far less than what they offer retail investors for 5 year term deposit funds, it is a good commercial move for a bank. But it does mean they will need retail savers less. Retail investors rarely offer banks their savings locked up for five years. But bond investors do (although they always have the 'out' of the listed market).

SCAM ALERT
CertNZ is reporting a spike of invoice scams recently. In these scams, the scammers gain access to a business’ email account and advise customers of a change in bank account details. Because it comes from the business’ email account and tend to be for expected payments, the scammers are often successful. Once the change is discovered, the money has often been transferred overseas and is hard to recover.

ONLINE INFLATION
There was a noticeable rise by Kiwi online shoppers using offshore platforms in July, at least by value. BNZ/Marketview are reporting that New Zealand’s online retail spending in July was +13% higher than in July last year. Annual online spending across the retail categories we cover is now approximately $4.4 bln or 7.8% of all retail sales. Excluding the food and liquor sectors, online spending is equivalent to 11.2% of retail sales. Spending at local online sites was up 13% but some of that growth reflects NZ’ers paying higher prices because our currency has fallen, but underlying volumes are still growing. Purchases from overseas sites were also up +13% on the same basis and the first time in a while they have matched local growth. (In June they were up a more normal +7%.)

ON A ROLL
Fund manager NikkoAM is winning all its industry awards. It has just won the FundSource one, after picking up the Morningstar one, and the Fitch Bond one.

CONCERNED ABOUT WHAT THEY SEE
The latest measure of consumer confidence was out today from ANZ/Roy Morgan based on August polling. Although the level was little changed in, sitting around its historical average, we should note that it is down sharply from September 2017, a drop of -12 pts and pushing aside the early 2018 bump. Households are upbeat about current conditions but remain a little cautious about the outlook, says ANZ. Disquiet is focused on prospects for the broader economy over the next 12 months rather than households’ own finances, in what is likely an echo of weak business confidence survey results.

DAIRY I
The latest USDA survey of dairy prices for Oceania is revealing a sharper drop than we saw in the last GDT auction. Which might be a 'motivation' for the next item.

DAIRY II
Fonterra has chopped -25c from its milk payout on what it says are rising global supplies, making its markets more competitive. Its new 2018/19 forecast payout is now $6.75/kgMS.

SLOWER GROWTH, MORE RATE RISK
RBNZ data on housing loans as at July saw the total amount outstanding rise by just over +$1.0 bln from June, the second lowest rise of 2018. But it was a rise of almost +6.0% from the same month a year ago and that is a slightly faster pace of growth than we have seen all year. Now more than 65% of all housing loans are facing a rate reset with 12 months. That is up from just over 60% in July 2017. (And that is despite the fact that floating mortgages now represent less than 20% of all housing lending, the lowest level since March 2009.)

PERSONAL LENDING GROWTH SLOWS
That same RBNZ data has revealed a sharp slowing in the growth of non-housing personal lending. It was up just +5.6% year-on-year, down sharply from the +8.6% growth rate at the start of 2018. The biggest falls in growth are being felt by the non-bank lenders who have 32% of the market.

HOUSEHOLDS BUILDING BANK BALANCES
After slowing in April and May, the growth in household bank deposits is picking up again. They grew by +$1.2 bln in July from June, and were up +7.2% year-on-year, the fastest expansion of 2018. Household bank accounts are flush, just as total loan growth is hard to find. Total lending growth (housing+personal+business+rural) declined by -$330 mln in July from June, the first time that has happened since October 2011. This mismatch is another reason depositors may be on the short end.

SWAP RATES LOWER YET AGAIN
A small bounce this morning after yesterdays sharp drop has turned around this afternoon with rates down again -1 bp across the board. We are still getting echos of the business confidence fall. The UST 10yr is soft, down -2 bps at 2.86%. The UST 2-10 curve is just under +21 bps. The Aussie Govt 10yr is at 2.53% (down -4 bps), the China Govt 10yr is at 3.62% (down -1 bp), while the NZ Govt 10 yr is now at 2.56%, down another -3 bps. The 90 day bank bill rate is unchanged at 1.91%.

BITCOIN SLIPS
The bitcoin price is down -0.9% today at US$6,942.

NZD SOFTISH
The NZD is down a little more to 66.5 USc. On the cross rates we are holding at 91.6 AUc, and still just under 57 euro cents. That puts the TWI-5 at 70.1.

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