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BONDS: NZGBS: Closed Little Changed After Q3 Prices Data

BONDS
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NZGBs closed little changed and in the middle of today’s ranges.

  • (Bloomberg) “New Zealand’s central bank will cut interest rates further and faster than it says it will as the economy contracts and inflation slows, according to investors and some economists.” (See link)
  • (MNI) As NZ does not yet have a monthly aggregate CPI series, the release of certain components accounting for around 45% of the total is watched closely. Q3 average annual rates are generally lower, apart from food and overseas air travel, which signals that inflation is on track to moderate towards the RBNZ’s 2.3% y/y forecast.
  • August food prices rose 0.2% m/m and 0.4% y/y, down from 0.6% y/y. It continues to be held down by fruit & vegetable prices which fell 0.8% m/m and -12.2% y/y. But groceries and restaurant meals saw price rises and are running at 2.4% y/y and 3.6% y/y respectively.
  • Swap rates are flat to 1bp higher.
  • RBNZ dated OIS pricing closed 2-4bps firmer across meetings, with May-25 leading. A cumulative 78bps of easing is priced by year-end.
  • Tomorrow, the local calendar will see REINZ House Sales and BusinessNZ Manufacturing PMI data.
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NZGBs closed little changed and in the middle of today’s ranges.

  • (Bloomberg) “New Zealand’s central bank will cut interest rates further and faster than it says it will as the economy contracts and inflation slows, according to investors and some economists.” (See link)
  • (MNI) As NZ does not yet have a monthly aggregate CPI series, the release of certain components accounting for around 45% of the total is watched closely. Q3 average annual rates are generally lower, apart from food and overseas air travel, which signals that inflation is on track to moderate towards the RBNZ’s 2.3% y/y forecast.
  • August food prices rose 0.2% m/m and 0.4% y/y, down from 0.6% y/y. It continues to be held down by fruit & vegetable prices which fell 0.8% m/m and -12.2% y/y. But groceries and restaurant meals saw price rises and are running at 2.4% y/y and 3.6% y/y respectively.
  • Swap rates are flat to 1bp higher.
  • RBNZ dated OIS pricing closed 2-4bps firmer across meetings, with May-25 leading. A cumulative 78bps of easing is priced by year-end.
  • Tomorrow, the local calendar will see REINZ House Sales and BusinessNZ Manufacturing PMI data.