A review of things you need to know before you go home on Wednesday; waiting for Yellen, S&P warns on higher rates, Aussies grumpy, swaps settle, NZD rises

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

MORTGAGE RATE CHANGES
There are no changes to report today.

DEPOSIT RATE CHANGES
No changes here either.

RISING YIELDS
The latest LGFA bond tender today saw the rate curve steepen and the coverage ratio rise to 3.1x from 2.6x. The average weighted yield jumps 18 bps to 3.9%. The two portions due 2025 and 2027 now pay investors more than 4%.

NO REFUNDS FOR DODGY INVESTMENT DECISIONS
The Banking Ombudsman Scheme had received a spate of complaints from individuals seeking to recoup credit card payments made to binary options trading sites. Binary options trading is high risk, so people need to take extra care before investing. Binary options trading involves speculating on whether stocks or currencies will rise or fall. On-line platforms may not be regulated, which means there is a higher risk the investment is a scam. “Bank customers complain to us that banks won’t arrange the return of the money. But the fact is, banks can’t do that because the transactions were authorised by the individuals themselves," the Banking Ombudsman said. “The payment process was perfectly correct. It was the investment that was unsound, and banks cannot be held to account for that. It’s a case of buyer beware.”

WHERE THE RISK IS
As we await the Fed's upcoming decision on American interest rates, S&P Global Ratings is warning that nearly one in ten corporate debt issuers around the globe could be downgraded if credit spreads return to levels seen during the financial crisis. Their research companies in North America and Europe and shows they would fare better than those in Latin America and Asia-Pacific. In there scenario, interest costs for the sample of rated issuers would rise by at least one-third and cost corporate borrowers an additional $184 bln annually. "Globally, the sector most hurt in our stress scenario would be homebuilders, with about one in six issuers (16%) at risk of a downgrade," said credit analyst David Tesher, one of the authors of the report. "Other sectors in the worst quintile include metals and mining, transportation, forest and paper products, and retail and restaurants."

TAILING OFF
After peaking in May, the growth in the annual number of motor vehicles sold in Australia has been sinking and in the year to November it was down to +2.3%, the lowest twelve month growth since September 2015. For the month of November alone, the growth was a minuscule +0.3% on the same month a year ago.

AUSSIE PESSIMISTS OUTNUMBER OPTIMISTS
In Australia, the Westpac-Melbourne Institute Index of Consumer Sentiment fell by -3.9% in December from 101.3 in November to 97.3 in December. Today’s result has jolted their air of stability and confidence. The Index is now at its lowest level since April this year. There is now a clear majority of pessimists over optimists with the Index down 3.5% from to a year ago.

AN AUSSIE PRICE FIXER
The Australian Competition and Consumer Commission has won a case in the Brisbane Federal Court against Flight Centre over price fixing. The court today found Flight Centre guilty of six charges of attempting to induce competitors to enter into price-fixing arrangements. The charges relate to attempts to induce three major airlines to agree to stop directly offering and booking their own international fares at prices less than what Flight Centre offered. The attempts occurred between 2005 and 2009 and involved Singapore Airlines, Malaysian Airlines and Emirates.

WHOLESALE RATES SETTLE
Swap rates have held today, moving very little for a second straight day. The 90-day bank bill is unchanged at 2.04%. The higher rates are holding, but that now depends on the signals the US Fed gives tomorrow morning.

NZ DOLLAR UNCHANGED
The Kiwi dollar has held steady today against the USD, but we are a little firmer against most others. The currency world is also awaiting Fed signals. It is now at 72.1 USc. On the cross rates it is at 96.3 AUc, and is up at over 67.8 euro cents. The TWI-5 now at 78. Check our real-time charts here.

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