A review of things you need to know before you go home on Wednesday; another mortgage cut, dairy prices lower, confidence down, C/A weakens, jobs growth slows, swaps and NZD firm

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

MORTGAGE RATE CHANGES
In case you missed it yesterday, the Co-operative Bank has cut all its fixed home loan rates by between -6 bps and -40 bps. Its new three year rate is very competitive, and its new 6 month rate is market leading.

TERM DEPOSIT RATE CHANGES
No changes to report today.

DETERIORATION
Dairy prices slipped yet again today, their eighth dip in a row at the GlobalDairyTrade auction. That takes overall prices back to levels last seen in October 2016. The saving grace is the automatic adjustment we get from our free-floating currency, but even that is not cushioned the result that much. It is only a matter of time now for another cut in the 2018/19 milk payout forecast.

GOING THE WRONG WAY
The Westpac MM consumer confidence survey for Q3-2018 came in a little more pessimistic than the earlier monthly ANZ-Roy Morgan survey, even though both are pointing firmly south now. The high point was June or September 2017, just before the general election and it has been downhill since.

EROSION STARTING?
BNZ reports: "New Zealand’s external accounts have continued their trend deterioration, which began in 2017. Back in December 2016 the current account deficit hit a low of -2.2% of GDP. That has now climbed to -3.3% of GDP and, by our expectation, will be through -4.0% by mid 2019. Driving the balance further and further into red has been the weakness experienced in New Zealand export volumes." [Not BNZ:] But we should also note that we are in our least-weakest position in terms of foreign liabilities-to-GDP (what we owe the rest of the world). The net IIP:GDP ratio is now -54.5%, the smallest it has been since these modern records began in 2000 - and when it was over -80%. We should recall that it is this improvement from disaster levels that was behind those years of necessary pain and adjustment. While it did dip in the GFC, if we kept up the current rate of improvement we have had since then, it would be eliminated in a bit over a generation from now. Yes, "if", and that means current public policy setting will need to turn away from their recent slippage. Hard to be optimistic about that.

EXPANSION SLOWING
The air seems to be going out of jobs growth. Sure, online job ads are still growing, but the pace is slackening. Worryingly, it is slackening fastest for skilled jobs, although for the first time we are seeing a pullback for unskilled jobs, the area that has had surprising growth recently..

A FEW MORE REFUGEES
The Government today announced New Zealand will lift its refugee quota from 1000 to 1500 by 2020. By then, official estimates say overall immigration will fall to the rate of +51,000 per year. It has risen by 63,800 in the year to July. The rise in the refugee intake is to be funded by an additional $33 mln budget allocation.

UPDATED I
For those who use our unique regular savings KiwiSaver analysis, all funds we monitor - and that is most of them - have been updated to the end of August. We will next review fund performance when the September update is completed.

UPDATED II
Still curious about how money is created? Today an RBA official outlined the process here. If you want a New Zealand example, we have this resource here.

SWAP RATES STEEPEN FURTHER
Swap rates rose and steepened yet again today with 2 yr rates unchanged, three year rates up +1 bps, four years and longer up +2 bps. That put the swap 2-10 curve at +89 bps and its steepest in six weeks. The UST 10yr is also rising, now at 3.05% with the UST 2-10 curve now just below +25 bps. The Aussie Govt 10yr is at 2.70% (up +5 bps), the China Govt 10yr is at 3.68% (unchanged), while the NZ Govt 10 yr is at 2.68%, and also up +5 bps. The 90 day bank bill rate is unchanged at 1.89%.

BITCOIN FIRMS
The bitcoin price is marginally higher today at US$6,327, a +1.4% rise from this time yesterday.

NZD UP
The NZD is is having a late rise and is now at 66 USc, essentially unaffected even after a weak dairy auction, a poor consumer confidence result, and a worse balance of payments outcome. On the cross rates we are lower at 91 AUc, and higher at 56.5 euro cents. That puts the TWI-5 at 69.6.

This chart is animated here. For previous users, the animation process has been updated and works better now.