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BONDS: NZGBS: Bull-Flattener, NZ-US 10Y Diff. Near Lowest Since Mid-2021

BONDS
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NZGBs closed showing a bull-flattener, with benchmark yields flat to 4bps lower.  

  • The NZGB 10-year slightly outperformed on the day, with the NZ-US and NZ-AU 10-year differentials 1-2bps tighter. At +10bps, the NZ-US differential sits near its tightest levels since mid-2021.
  • NZ export volumes fell for a second straight quarter, adding to signs of a mid-year recession. Exports of goods dropped 1.8% in the third quarter from the previous three months, Statistics New Zealand said. Imports rose 3%, meaning net exports — which are comparable to measures used in the gross domestic product report — fell 4.8% from the second quarter, when they dropped 7.9%. (per BBG)
  • Swap rates closed 3-7bps lower.
  • RBNZ dated OIS pricing closed flat to 2bps softer, with late-2025 leading. 42bps of easing is priced for February, with a cumulative 94bps by November 2025.
  • Tomorrow, the local calendar will see ANZ Commodity Prices. The RBNZ also appears before a Select Committee for its Annual Review.
  • On Thursday, the NZ Treasury plans to sell NZ$200mn of the 3.00% Apr-29 bond, NZ$250mn of the 4.25% May-34 bond and NZ$50mn of the 2.75% Apr-37 bond.
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NZGBs closed showing a bull-flattener, with benchmark yields flat to 4bps lower.  

  • The NZGB 10-year slightly outperformed on the day, with the NZ-US and NZ-AU 10-year differentials 1-2bps tighter. At +10bps, the NZ-US differential sits near its tightest levels since mid-2021.
  • NZ export volumes fell for a second straight quarter, adding to signs of a mid-year recession. Exports of goods dropped 1.8% in the third quarter from the previous three months, Statistics New Zealand said. Imports rose 3%, meaning net exports — which are comparable to measures used in the gross domestic product report — fell 4.8% from the second quarter, when they dropped 7.9%. (per BBG)
  • Swap rates closed 3-7bps lower.
  • RBNZ dated OIS pricing closed flat to 2bps softer, with late-2025 leading. 42bps of easing is priced for February, with a cumulative 94bps by November 2025.
  • Tomorrow, the local calendar will see ANZ Commodity Prices. The RBNZ also appears before a Select Committee for its Annual Review.
  • On Thursday, the NZ Treasury plans to sell NZ$200mn of the 3.00% Apr-29 bond, NZ$250mn of the 4.25% May-34 bond and NZ$50mn of the 2.75% Apr-37 bond.