A review of things you need to know before you go home on Friday; some key rate drops, policy uncertainty raises power prices, building consents jump, online retail strong, swaps unchanged, NZD softer & more

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

MORTGAGE RATE CHANGES
Kiwibank launched sub 4% rates all the way out to 5 years. Later, ASB responded with lower rates of its own.

TERM DEPOSIT RATE CHANGES
Reductions in savings rates were announced by ANZ and BNZ. Essentially they cut bonus saver rates by -40 bps or -50 bps respectively.

POLICY CHANGES & UNCERTAINTY HOLD UP ELECTRICITY PRICES
The country's lakes have been topped up and the main gas field is back in action, but electricity prices have settled at an elevated level and aren't expected to fall. We look at what's going on.

BIG RISES
The residential building boom continues with new dwelling consents up +24% in July from a year ago. The number of new dwellings being consented in Auckland has doubled over the last five years.

ONLY SLIGHTLY UNDER PAR
Consumer confidence lifted +2 points in August to 118, slightly below the historical average. The Current Conditions Index rose +1 point, while the Future Conditions Index lifted +2 points. The proportion of households who think it’s a good time to buy a major household item was unchanged at a respectable +39%.

NEW SME LENDER
Aussie small business finance specialist Prospa is big in Australia and is now expanding in New Zealand. While it only has $45 mln in funding here, it has increased its maximum loan size from $150,000 to $300,000 in a push to grow locally via the broker channel. Instead of interest, Prospa charges an origination fee, plus a "factor" rather than "interest". An example they give is: "Take a loan of $10,000 with a $250 origination fee (2.5%) and factor rate of 1.20. You would pay back $12,300 over the loan term. ($10,000 + $250) x 1.20 = $12,300." You can work out the effective cost of credit using this tool. If their example was over 24 months, the effective cost of credit would have been 18.0% pa.

ONLINE RETAIL GROWS STRONGLY
New Zealand’s total online retail spending in July was +9% higher than a year ago, according to the latest BNZ/Marketview analysis. Spending at local online sites was exceptionally strong - up +18% on July last year. This is continuing to be heavily driven by Food and Grocery categories. Spending growth at offshore sites fell slightly in July, with online spending down -3% on July last year.

BOUNCE-BACK?
After a couple of months of disappointing results, non-residential consents grew +27% pa in July, with total consents worth $141 mln more than a year prior. However, Infometrics says it is important to note this result is down -1.9% from June. Most of this growth came in Christchurch, where consents were $89 mln higher than a year prior. The strong growth in the Garden City was due to a $39 mln university student hall and a $33 mln prison consent. The non-residential construction sector is not in a great situation at present and the fact that this bounce-back is primarily only from large taxpayer-funded projects reflects the funk.

BNPL EATS PERSONAL LOAN SECTOR
July home loan balances outstanding rose +6.3% in the year to July, according to the latest RBNZ update (C5). This is actually the fastest rate of housing debt growth since September 2017 (when the current Government was elected). Business debt growth rose at +7.7% pa and its fastest since October 2016. Rural debt growth was at a timid +2.8% annual rate. But the stand-out change was for personal debt which didn't grow at all, basically unchanged in a year. This could be reflecting the surge in buy-now, pay-later (BNPL) 'lending' which isn't captured by the RBNZ data. Given that credit card balances grew a very low +0.6% in the same period, we can see that the BNPL sector is hitting the personal loan market even harder. Together, this is a $16.6 bln sector and it is now facing an uncertain future.

GRIM READING
In contrast to the New Zealand housing sector, the data in Australia for residential consents in July was quite grim. Overall, residential consents fell by -26%, but apartment consents were down-44% year-on-year and on an annual basis you have to go back to 2013 to find a lower level.

SWAP RATES HOLD
Wholesale swap rates are unchanged today. The 90-day bank bill rate is unchanged at 1.19%. Australian swap rates are down -2 bps. The Aussie Govt 10yr is up +2 bps at 0.89%. The China Govt 10yr is down -1 bp to 3.07%, while the NZ Govt 10 yr unchanged at this time at 1.10%. The UST 10yr yield is up +7 bps to 1.52%.

NZ DOLLAR SLIDES
The Kiwi dollar dropped today and is now under 63 USc. Against the Aussie we are down to 93.8 AU cents. Against the euro we are softer at 57 euro cents. That puts the TWI-5 down to 68.4.

BITCOIN DROPS FURTHER
Bitcoin is tumbling today and is down another -6.4% to US$9,467. The bitcoin price is charted in the currency set below.

This chart is animated here.