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BONDS: NZGBS: Closed Richer But Off Bests, RBNZ Infl. Exp. On Monday

BONDS
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NZGBs closed 2-5bps richer, but off session bests. The NZ-US 10-year differential closed 6bps wider at +25bps after US tsys rebounded from Wednesday’s post-election lows. Cash US tsys are ~1bp cheaper in today’s Asia-Pac session.

  • Today’s local data calendar was empty, but on Monday, we’ll see the release of 2-year Inflation Expectations, followed by Card Spending data on Tuesday.
  • Finance Minister Nicola Willis doesn’t want the nation’s smaller deposit takers to pay as much into a proposed deposit insurance scheme as their small size may warrant, the NZ Herald reports citing an interview. (per BBG)
  • Swap rates closed 2-4bps lower, with the 2s10s curve flatter.
  • RBNZ dated OIS pricing closed 1-4bps softer across meetings. A cumulative 93bps of easing is priced by February, with 53bps by year-end.
  • In the $-bloc, rate expectations through July 2025 remain mostly steady since the start of the week, with New Zealand as an exception, showing a 10bp increase.
  • This came despite the key release of the week, the Q3 Employment Report, revealing a softening labour market as the economy weakens. Employment fell 0.5% q/q, with annual growth down 0.4%. Wage growth also slowed as labour market pressures eased. However, the unemployment rate rose less than expected due to a larger-than-anticipated drop in participation.
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NZGBs closed 2-5bps richer, but off session bests. The NZ-US 10-year differential closed 6bps wider at +25bps after US tsys rebounded from Wednesday’s post-election lows. Cash US tsys are ~1bp cheaper in today’s Asia-Pac session.

  • Today’s local data calendar was empty, but on Monday, we’ll see the release of 2-year Inflation Expectations, followed by Card Spending data on Tuesday.
  • Finance Minister Nicola Willis doesn’t want the nation’s smaller deposit takers to pay as much into a proposed deposit insurance scheme as their small size may warrant, the NZ Herald reports citing an interview. (per BBG)
  • Swap rates closed 2-4bps lower, with the 2s10s curve flatter.
  • RBNZ dated OIS pricing closed 1-4bps softer across meetings. A cumulative 93bps of easing is priced by February, with 53bps by year-end.
  • In the $-bloc, rate expectations through July 2025 remain mostly steady since the start of the week, with New Zealand as an exception, showing a 10bp increase.
  • This came despite the key release of the week, the Q3 Employment Report, revealing a softening labour market as the economy weakens. Employment fell 0.5% q/q, with annual growth down 0.4%. Wage growth also slowed as labour market pressures eased. However, the unemployment rate rose less than expected due to a larger-than-anticipated drop in participation.