A review of things you need to know before you go home on Wednesday; no rate changes, Auckland listings rise, job ad growth slows, commodity prices slip, construction faces issues, swaps firmer, NZD weaker

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
None here either.

SPRING RISE IN LISTINGS
Barfoot & Thompson's August sales figures suggest the Auckland housing market is on a better footing for the start of the spring selling period with more supply. They suggest that the "bottom of price cycle has been reached". But the August 2017 listings and sales were the highest of any month following all the way through to February, so the first real test of the B&T optimism will come in September.

A LULL DEVELOPING
The ANZ job ads survey increased +6.2 in August compared with the same month a year ago although the recent pace of the rises is falling way off. Month-on-month it is up only +0.6%. This is consistent with softer employment intentions out of the ANZ business confidence surveys.

OFF THE TOP
The ANZ world commodity price index fell -1.1% month-on-month in August – its third consecutive monthly decline, leaving the index down -0.5% year-on-year. Of the 17 commodities in the index, seven fell, four were unchanged and six lifted. Of the six broad categories, only forestry prices managed to squeeze out a small gain. But the falling NZ dollar is acting as a shock absorber, cushioning the reductions in the short-term at least. Still, most commodity prices are still at an historically high level.

UP BUT NOT STRONG
The volume of construction activity bounced back in the June quarter after the disappointing result in March. Non-residential construction showed the strongest growth, but residential construction was below expectations. This June quarter data predates recent construction company failures, and capacity constraints on both land and financing remain the largest problems for the construction industry. Auckland's huge project backlog will take longer to get addressed.

ANOTHER STRONG RESULT
GDP data for Australia for the June quarter has come in more positive that markets were expecting with real growth up +3.4% pa and even better than the March growth rate of +3.2%. Markets were expecting a slippage. This gave a temporary boost to the AU dollar, but it quickly faded. That is their 27th straight year of expansion. But the same data showed that their household savings rate reduced sharply to just +1%. (Just so there is no confusion when comparing, the US recently reported GDP growth of +4.2%, but that is on their own special gilded basis "the annual rate of increase from the prior quarter". On the same basis as everyone else uses - the rise from the same quarter a year ago - it was +2.9%.)

UNPLEASANT SURPRISE
There was a surprise slip in the Chinese services PMI today for August. Markets were expecting an index of 52.6, a similar expansion to July. But it came in at 51.5 and a noticeable slowing. An index value of 50 represents no change, lower is a contraction. Today's data is the lowest reading since October 2017 and the expansion that there is is being driven by higher prices rather than rising demand.

HEAD SCRATCHER
[This item has been corrected.] ASB has raised $450 mln in an unsecured, unsubordinated Notes issue. It will pay 3.31% pa for a five year term. They were seeking $100 mln "plus unlimited oversubscriptions". For reference, ASB offers retail investors 4.00% for a 5 year term deposit. It does raise the question about who is attracted to these Notes that are actually subordinate rank equally to term deposit investors and pay less. (Just guessing, but it looks like financial advisers are pushing client monies in here in bucketloads and their clients are reaping poorer returns and a weaker position than if they did it themselves. Anyone know the real reason why issues like this are so popular?)

SWAP RATES FIRMER
Swap rates are generally +1 bp higher today. The UST 10yr is up +4 bps at 2.90%. The UST 2-10 curve is now at +24 bps. The Aussie Govt 10yr is at 2.58% (up a sharp +7 bps), the China Govt 10yr is at 3.65% (up +3 bps), while the NZ Govt 10 yr is at 2.58%, up +4 bps. The 90 day bank bill rate is unchanged at 1.90%.

BITCOIN FIRMER
The bitcoin price is at US$7,375, up +1.3% from this time yesterday. 

NZD DOWN
The NZD has bounced back a little from this morning to 65.6 USc although that is -½c lower than this time yesterday. On the cross rates we are down at 91 AUc, and at 56.9\5 euro cents. That puts the TWI-5 at 69.4 and a three year low.

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