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BONDS: NZGBS: 44bps Of Easing Priced For RBNZ Next Week

BONDS
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NZGBs closed richer across benchmarks, with yields 1-3bps lower. Nevertheless, the local market finished well off the session’s best levels. With the domestic calendar empty today, the local market was on Middle East headlines watch following yesterday’s events. 

  • Cash US tsys are slightly cheaper, in today’s Asia-Pac session after yesterday’s haven-induced rally. The US calendar will see MBA Mortgage Applications and ADP Employment Change data later today.
  • Swap rates closed flat to 1bps lower.
  • RBNZ dated OIS pricing closed flat to 1bp softer across meetings, with 44bps or a 76% chance of a 50bp cut next week. The market is pricing in 92bps of cuts now by November.
  • ANZ expects the RBNZ will cut the OCR by 50bps to 4.75% next week. “Now that most economists are calling it and the market is pretty much fully pricing it, one has to conclude that on balance the likeliest scenario is that the RBNZ will just take what’s on the table”. (per BBG)
  • The calendar is light for the remainder of the week, with just ANZ Commodity prices tomorrow.
  • Tomorrow, the NZ Treasury plans to sell NZ$250mn of the 1.50% May-31 bond, NZ$200mn of the 4.25% May-34 bond and NZ$50mn of the 1.75% May-41 bond.
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NZGBs closed richer across benchmarks, with yields 1-3bps lower. Nevertheless, the local market finished well off the session’s best levels. With the domestic calendar empty today, the local market was on Middle East headlines watch following yesterday’s events. 

  • Cash US tsys are slightly cheaper, in today’s Asia-Pac session after yesterday’s haven-induced rally. The US calendar will see MBA Mortgage Applications and ADP Employment Change data later today.
  • Swap rates closed flat to 1bps lower.
  • RBNZ dated OIS pricing closed flat to 1bp softer across meetings, with 44bps or a 76% chance of a 50bp cut next week. The market is pricing in 92bps of cuts now by November.
  • ANZ expects the RBNZ will cut the OCR by 50bps to 4.75% next week. “Now that most economists are calling it and the market is pretty much fully pricing it, one has to conclude that on balance the likeliest scenario is that the RBNZ will just take what’s on the table”. (per BBG)
  • The calendar is light for the remainder of the week, with just ANZ Commodity prices tomorrow.
  • Tomorrow, the NZ Treasury plans to sell NZ$250mn of the 1.50% May-31 bond, NZ$200mn of the 4.25% May-34 bond and NZ$50mn of the 1.75% May-41 bond.