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BONDS: NZGBS: Cheaper Despite A Late Session Rally For US Tsys

BONDS
BulletMarketsFixed Income Bullets

In local morning trade, NZGBs are 2-3bps cheaper despite US tsys finishing with a bull-steepening following yesterday’s mixed data and Fedspeak. The 2-year yield closed 6bps lower at 3.96%. 

  • There was an upside surprise in September CPI (headline 0.18% M/M vs 0.08% est., Core 0.31% vs 0.25% est.).
  • Hurricane Helene impacted initial jobless claims rose to 35.5k.
  • Meanwhile, Atlanta Fed Bostic said the door is open to skip a rate cut in November. NY Fed Williams said policymakers should reduce rates to a more neutral level ‘over time’.
  • NZ’s manufacturing PMI rose to 46.9 in September from a revised 46.1 in August. “While all sub-indices remain well below their historical average, four of the five series have moved closer to breakeven in the last three months since June”: BNZ
  • NZ’s net migration fell to +1,840 in August from a revised +3,000 in July.
  • Food prices rise 0.5% m/m in September.
  • Swap rates are 1-2bps higher, with the 2s10s steeper.
  • RBNZ dated OIS pricing is little changed but remains 6-16bps softer across meetings out to May-25 than pre-RBNZ levels. 54bps of easing is priced for November, with a cumulative 92bps of easing priced for Feb-25 (3.83%) and 152bp by July-25 (3.23%). 
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In local morning trade, NZGBs are 2-3bps cheaper despite US tsys finishing with a bull-steepening following yesterday’s mixed data and Fedspeak. The 2-year yield closed 6bps lower at 3.96%. 

  • There was an upside surprise in September CPI (headline 0.18% M/M vs 0.08% est., Core 0.31% vs 0.25% est.).
  • Hurricane Helene impacted initial jobless claims rose to 35.5k.
  • Meanwhile, Atlanta Fed Bostic said the door is open to skip a rate cut in November. NY Fed Williams said policymakers should reduce rates to a more neutral level ‘over time’.
  • NZ’s manufacturing PMI rose to 46.9 in September from a revised 46.1 in August. “While all sub-indices remain well below their historical average, four of the five series have moved closer to breakeven in the last three months since June”: BNZ
  • NZ’s net migration fell to +1,840 in August from a revised +3,000 in July.
  • Food prices rise 0.5% m/m in September.
  • Swap rates are 1-2bps higher, with the 2s10s steeper.
  • RBNZ dated OIS pricing is little changed but remains 6-16bps softer across meetings out to May-25 than pre-RBNZ levels. 54bps of easing is priced for November, with a cumulative 92bps of easing priced for Feb-25 (3.83%) and 152bp by July-25 (3.23%).