A review of things you need to know before you go home on Friday; ASB ups mortgage rates, Govt surplus rises, used import sales strong, rents rising fast, swap rates jump, NZD up

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

MORTGAGE RATE CHANGES
ASB has raised all its rates +20 to +30 bps for terms of three years and longer. It may not be long before they are followed, given the wholesale rate jumps (see below).

DEPOSIT RATE CHANGES
No changes to report today.

SWEET SPOT, RISING FAST
Strong economic growth is pushing up the tax take. Treasury reports an OBEGAL Budget surplus of NZ$222 mln in the 3 months to September 2016, which is NZ$725 mln more than was forecast in the May Budget. Tax revenues are NZ$523 mln higher than forecast on the stronger economic position.

FAST COMPANY
We got the data for the registration of used car imports today for October and it was another strong result. Here is Infometric's review: "In October, sales of used cars were up 1+4% from a year earlier — its fastest increase since March 2015.  Growth in new car sales wasn’t far behind, at +12% over the same period.  Car prices continued to fall in the September quarter, with prices for new cars leading the decline. This decline was larger than we had expected, given exchange rate settings and upward demand pressure during this time. Looking forward, demand fundamentals are set to ease alongside slower population growth, but remain elevated above historic averages due to sustained economic growth."

DEUTSCHE BANK ON A WARNING
Fitch Ratings has placed Deutsche Bank's 'A-' Long-Term Issuer Default Rating (IDR), 'F1' Short-Term IDR and 'a-' Viability Rating (VR) and its debt ratings on Rating Watch Negative. The negative watch is because Fitch believes that the challenges posed by a sluggish business environment, particularly in Europe but also in Asia Pacific, will make it harder for Deutsche Bank to build revenue and, therefore, capital during 2017 in line with its 2020 strategy.

RISING RENTS, LOW VACANCY RATES
Median national rent levels for a 3 bedroom house rose to $420 in October, up +9.1% year-on-year, according to MBIE data supplied to interest.co.nz. In Auckland, it rose to $627/week (an +8.1% year-on-year rise), in Wellington it held at $520/week (a +5% y-on-y rise) and in Christchurch it held at $420/week (a -2.8% y-on-y fall). At the same time, Barfoots in Auckland report that they see average rents in Auckland up +5% on a year ago but vacancy rates are just 1% in spite of a rush of new stock.

STRONGER THAN EXPECTED
Australian retail sales topped analyst expectations for September, with turnover accelerating at its fastest clip in 15 months. It rose +4.2% nationally, +4.7% in NSW and +4.5% in Victoria, and +4.8% in Queensland.

THE REAL REASON
The Chinese president has raised his own authority to strongman status recently, clamping down hard on all critics in the name of a corruption drive. Now it turns out he said his mainland China’s Communist Party would be overthrown by the people if it failed to properly deal with Taiwanese pro-independence. He is scared on his own people, and doesn't want them to get any ideas from Taiwan or Hong Kong. No wonder the flood of funds out is not stopping.

WHOLESALE RATES HIGHER
The rise and rise of wholesale swap rates resumed today. These increases ranged from +2 bps for one year, +4 bps for 2 years and +5 bps for five years. The ten year rose +4 bps.. The 90-day bank bill is up +1 bp at 2.13%. We have also seen more +1 yield gains (price drops) for many NZGB durations.

NZ DOLLAR UP AGAIN
The recent spate of good economic news is still pushing up the Kiwi dollar. It is now at 73.2 USc. On the cross rates, it is trading at 95.2 AUc, and is at 65.9 euro cents. The TWI-5 is up at 76.8, although there is a little softness settling in late in the day. Check our real-time charts here.

You can now see an animation of this chart. Click on it, or click here.