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BONDS: NZGBS: Cheaper After US Yields Push Higher Ahead Of US CPI

BONDS
BulletMarketsFixed Income Bullets

In local morning trade, NZGBs are 2bps cheaper after US tsys finished near late session lows after the FOMC minutes showed "some" voting members failed to sway the 50bp cut majority at the September policy meeting. 

  • "Noting that inflation was still somewhat elevated while economic growth remained solid and unemployment remained low, some participants observed that they would have preferred a 25 basis point reduction of the target range at this meeting, and a few others indicated that they could have supported such a decision," the report said.
  • The market’s focus now turns to today’s CPI data. Weekly Jobless claims, a few more Fed speakers (Cook, Barkin, and Williams), and the re-opening of the 30Y Bond auction are also on tap.
  • Swap rates are 1-4bps higher, with the 2s10s curve steeper.
  • RBNZ-dated OIS pricing is little changed today but remains 10-15bps softer than yesterday's pre-RBNZ levels. 52bps of easing is priced for November, with a cumulative 91bps for Feb-25.
  • Today, the local calendar will see the NZ Government's 12-month Financial Statements alongside the NZ Treasury’s planned sale of NZ$200mn of the 0.25% May-28 bond, NZ$250mn of the 4.25% May-34 bond and NZ$50mn of the 1.75% May-41 bond.
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In local morning trade, NZGBs are 2bps cheaper after US tsys finished near late session lows after the FOMC minutes showed "some" voting members failed to sway the 50bp cut majority at the September policy meeting. 

  • "Noting that inflation was still somewhat elevated while economic growth remained solid and unemployment remained low, some participants observed that they would have preferred a 25 basis point reduction of the target range at this meeting, and a few others indicated that they could have supported such a decision," the report said.
  • The market’s focus now turns to today’s CPI data. Weekly Jobless claims, a few more Fed speakers (Cook, Barkin, and Williams), and the re-opening of the 30Y Bond auction are also on tap.
  • Swap rates are 1-4bps higher, with the 2s10s curve steeper.
  • RBNZ-dated OIS pricing is little changed today but remains 10-15bps softer than yesterday's pre-RBNZ levels. 52bps of easing is priced for November, with a cumulative 91bps for Feb-25.
  • Today, the local calendar will see the NZ Government's 12-month Financial Statements alongside the NZ Treasury’s planned sale of NZ$200mn of the 0.25% May-28 bond, NZ$250mn of the 4.25% May-34 bond and NZ$50mn of the 1.75% May-41 bond.