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BONDS: NZGBS: Closed At Bests, Local Market Closed on Monday

BONDS
BulletMarketsFixed Income Bullets

NZGBs closed at the session’s best levels, with benchmark yields 5-7bps lower. On the domestic data front, NZGBs were supported by a fall in the consumer confidence index, which suggested interest rate relief won’t be immediate for many households, and that there are still plenty of challenges to navigate including near-term job insecurity.

  • Cash US tsys, which are ~2bps richer in today’s Asia-Pac session, also assisted the move to yield lows. Today's US calendar will see Durables/Capital Goods and the University of Michigan's sentiment/inflation outlook. Next Friday sees employment data for October.
  • Nevertheless, the NZGB 10-year outperformed its $-bloc counterparts, with the NZ-US and NZ-AU yield differentials 2-3bps tighter.
  • Swap rates closed 5-8bps lower, with the 2s10s curve flatter. 
  • RBNZ dated OIS pricing closed 1-4bps softer for 2025 meetings. A cumulative 100bps of easing is priced by February, with 54bps by year-end.
  • The local market is closed on Monday for the Labour Day Holiday.
  • Across the ditch, Australia will see the Q3 CPI report on Wednesday. Inflation is expected to move back to the top of the RBA’s 2%-3% target band for the first time since Q1-21. Consensus estimates inflation slowed to 3.0% y/y from 3.8% in Q2.
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NZGBs closed at the session’s best levels, with benchmark yields 5-7bps lower. On the domestic data front, NZGBs were supported by a fall in the consumer confidence index, which suggested interest rate relief won’t be immediate for many households, and that there are still plenty of challenges to navigate including near-term job insecurity.

  • Cash US tsys, which are ~2bps richer in today’s Asia-Pac session, also assisted the move to yield lows. Today's US calendar will see Durables/Capital Goods and the University of Michigan's sentiment/inflation outlook. Next Friday sees employment data for October.
  • Nevertheless, the NZGB 10-year outperformed its $-bloc counterparts, with the NZ-US and NZ-AU yield differentials 2-3bps tighter.
  • Swap rates closed 5-8bps lower, with the 2s10s curve flatter. 
  • RBNZ dated OIS pricing closed 1-4bps softer for 2025 meetings. A cumulative 100bps of easing is priced by February, with 54bps by year-end.
  • The local market is closed on Monday for the Labour Day Holiday.
  • Across the ditch, Australia will see the Q3 CPI report on Wednesday. Inflation is expected to move back to the top of the RBA’s 2%-3% target band for the first time since Q1-21. Consensus estimates inflation slowed to 3.0% y/y from 3.8% in Q2.