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BONDS: NZGBS: Cheaper But Off Worst Levels, RBNZ Gov. Speaks Tomorrow

BONDS
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NZGBs closed flat to 2bps following a subdued session with little news flow. Despite the subdued trading, the benchmarks ended 1-2bps above their session cheaps. 

  • Notably, the NZGB 10-year outperformed its Australian counterpart, with the NZ-AU yield spread narrowing by 2bps to +5bps. Meanwhile, the NZ-US 10-year yield differential remained unchanged at +28bps, sitting near the midpoint of the range it has traded within since March.
  • Cash US tsys are ~2bps cheaper in today’s Asia-Pac session after yesterday’s modest extension of Monday’s heavy session. Today, we have MBA Mortgage Applications, followed by existing home sales & the Federal Reserve Beige Book.
  • According to a survey conducted by Bloomberg News, the NZ economy will expand by 0.4% in 2024, 2.0% in 2025 and 2.6% in 2026. (See link)
  • Swap rates closed flat to 3bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing closed mostly little changed but late 2025 meetings firmed 3-5bps. A cumulative 103bps of easing is priced by February, with 57bps by year-end.
  • RBNZ Governor Adrian Orr will speak tomorrow at the Peterson Institute about monetary policy.
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NZGBs closed flat to 2bps following a subdued session with little news flow. Despite the subdued trading, the benchmarks ended 1-2bps above their session cheaps. 

  • Notably, the NZGB 10-year outperformed its Australian counterpart, with the NZ-AU yield spread narrowing by 2bps to +5bps. Meanwhile, the NZ-US 10-year yield differential remained unchanged at +28bps, sitting near the midpoint of the range it has traded within since March.
  • Cash US tsys are ~2bps cheaper in today’s Asia-Pac session after yesterday’s modest extension of Monday’s heavy session. Today, we have MBA Mortgage Applications, followed by existing home sales & the Federal Reserve Beige Book.
  • According to a survey conducted by Bloomberg News, the NZ economy will expand by 0.4% in 2024, 2.0% in 2025 and 2.6% in 2026. (See link)
  • Swap rates closed flat to 3bps higher, with the 2s10s curve steeper.
  • RBNZ dated OIS pricing closed mostly little changed but late 2025 meetings firmed 3-5bps. A cumulative 103bps of easing is priced by February, with 57bps by year-end.
  • RBNZ Governor Adrian Orr will speak tomorrow at the Peterson Institute about monetary policy.